Bitcoin & Fiat Paper Dollars

This past week on Bloomberg Television, I referred to bitcoin as "a fraud decorated with technology."  The fraud comes about because the exchange of a fiat legal dollar for a token, to use the kind description adopted by the Securities and Exchange Commission, seems unfair and frankly incomplete.  But since the dollar itself is a product of government fiat, the subject seems open to debate.

The fact that a growing crowd of people have decided to speculate in this modern day version of tulip bulbs does not alter the unfairness of the exchange.  Our friend Jim Rickards recently squared off against four bitcoin proponents (a contest that hardly seems fair), but left them stumped when he reminded them that bitcoin displays the same “autoserial correlation” that was the tipoff in Madoff case.

But more to the point, the arrival of bitcoin heralds the culmination of a process of shrinkage in the value of what we rather pathetically call “money.”  In 1862, when the Union led by Abraham Lincoln enacted the legal tender laws, it broke the limits on government spending and began a slow slide for the American Republic towards insolvency. 

On February 25, 1862, Congress passed the Legal Tender Act to finance the Civil War. It allowed the federal government for the first time to print paper money, that was not backed by an equal amount of gold or silver.  Congress authorized the sale of $150 million in paper currency which soon became known as “greenbacks.”

Congress required Americans to accept these pieces of paper adorned by dead Presidents “in payment of taxes, internal duties, excises, debts, and demands of every kind,” but significantly not customs duties for imports.  

The significance of this act of Congress was to provide a way for the government to expand the currency without relation to whether it was backed by metal or even taxes.  The emergency which enabled this act of theft was a war, a reality that goes back to the Greeks and Romans.  “Thus under the exigencies of war,” wrote Senator Robert Byrd, “the nation gained a uniform currency to meet the demands of an expanding economy.”

Well, sort of.  The nation gained a flexible currency that traded down to a sharp discount vs gold and silver during the Civil War, but rebounded thereafter.  Yet in real, purchasing power terms the greenback steadily has lost value since the 1860s.  Through WWI and the creation of the Federal Reserve System in 1913, then the Depression and FDR’s confiscation of gold held by individuals, the fiat monopoly of the US government has grown.  And since the Depression and WWII through to today, the dollar has lost roughly 95% of its original value in real, purchasing power terms.

Many other nations have legal tender laws, a feature of the modern administrative state.  Yet as the public debt of the US and other industrial nations has grown, an unease has affected many people when it comes to the future of the Republic and the dollar.  Think Neo in The Matrix.  Americans are forced by law to use dollars as a means of exchange and a unit of account, but it has largely lost any utility as a store of value.  

Indeed, negative interest rates and quantitative easing are merely the latest manifestations of the ability of the state to tax its people of value via the shrinking dollar.  Nations have fiscal deficits and trade deficits, but the biggest shortfall is credibility.  When you look at the growth of the federal debt and the Fed’s willingness to monetize public debt via open market purchases, it is reasonable to conclude that we will all one day drown in a sea of worthless fiat dollars.

Into this yawning gulf of integrity comes bitcoin, a new era vehicle for speculation and larceny that derives its legitimacy from the fact that it is not sponsored by one of the indebted administrative states.  The folks at BNP Paribas noted recently that the future of bitcoin is limited because it lacks a lender of last resort, but isn’t that the point?  Right? 

Bitcoin is a “currency” that was designed to go ever up in value, to grow rather than shrink compared to fiat currencies.  The lack of a short market or the ability to borrow the crypto currency is part of the clever design by the mysterious founder that strongly biases the market to move ever higher, albeit with spasmodic episodes of price collapses. 

As the value of bitcoin expressed in fiat currencies rises, so too does the cost of clearing and the rewards to the “miners” who validate each trade.  Bitcoin looses efficiency as it goes up in value.  And as the crowd of people seeking access to the limited supply of bitcoin grows, the price increases.

But at the end of the day, the key flaw that blocks the bitcoin game from becoming a functional means of exchange or unit of account is the lack of an efficient way to move from the crypto currency to dollars or other legal tender currencies accepted by the payments system. There are  plenty of proposals on how to fix this, but the key issue seems to be the volatility.  As and when a solution occurs, however, the crypto world will threaten the fiat system. China’s new Emperor Xi Jinping understands this reality very well and has taken steps to ensure that bitcoin is tightly under the control of China’s communist rulers.  

While many people suppose that bitcoin is a threat to banks and the banking system, in fact the true threat is political.  If bitcoin were to ever grow large enough to present a viable alternative to the world of fiat legal tender dollars, the threat to America’s government monopoly over money would require a political reaction akin to FDR’s seizure of gold -- in the name of self preservation.  Compared to FDR's seizure of gold held by individuals, President Nixon closing the gold window forty years later was mere formality.

Fortunately, the quirky aspects of the bitcoin model that push the price ever higher, and with rising volatility, make it unlikely that it will achieve such broad adoption.  But it sure is fun to watch.  Yet ultimately the success of bitcoin is a pretty grim commentary on the prospects for the world of dollars and euros and yen, which are all tied to nation states that are well down the road to insolvency and default.  And yes, robbing people via inflation is a form of default.   

Or as one banker commented in 1862 when the legal tender laws were enacted: “By common consent of the nations, gold and silver are the only true measure of value.  These metals were prepared by the Almighty for this very purpose.”


38BWD22 Fri, 11/24/2017 - 16:38 Permalink

  rcwhalen makes some great points, I would like to discuss a couple of them.First I must say that Bitcoin has treated me very well.  I have been lucky.  And I really like the fact that with some work, one can be reasonably anonymous with BTC.Emperor Xi of China (and their worldwide equivalents) are in a position to block or obstruct the "entrance and exit ramps" of Bitcoin (tracking actual exchange of currency for Bitcoin and tracking purchases of gold paid for by BTC, for example).  It's a real problem.BTC is also hard to deal with for the masses.  That problem does not seem to be soluble in the near future.  There are also legitimate concerns about all the *new* cryptos diluting the value of BTC... Nonetheless, it is crystal clear that some sort of cryptocurrency will become widely used at some point.  I just hope that it is BTC or Monero or something like that, not a Fedcoin....

stacking12321 algol_dog Sat, 11/25/2017 - 02:58 Permalink

Exactly wrong.

Currency backed by a military (extortion) should only be used for toilet paper. It should be recognized as an instrument of criminals, and shunned.

I prefer to hold an appreciating asset like gold or btc, not a depreciating one like usd. I put my money where my mouth is, and I’m consequently richer as a result of rejecting the criminals.

In reply to by algol_dog

jin187 stacking12321 Sat, 11/25/2017 - 06:07 Permalink

Economics and trade have been backed by the point of a sword or the barrel of a gun since before we had paper currency. The world is driven by criminal enterprise.

Also gold doesn't appreciate. It's always worth (gold), and only temporarily gains or loses value vs currency, and has pretty much been in line with fiat inflation in long-term gains in value. Thus you use gold as a hedge against underperforming fiat, not a means to get rich when fiat goes away.

BTC is too early in its existence to tell what the true value will be, so it's currently just a speculative investment. It may eventually become a commodity like gold, or a widely used currency. Eventually, the gains will level off, and it will probably be on a price curve with a relation to fiat that isn't much different than gold.

In reply to by stacking12321

stacking12321 jin187 Sun, 11/26/2017 - 03:04 Permalink

this isn't correct:"Economics and trade have been backed by the point of a sword or the barrel of a gun since before we had paper currency. The world is driven by criminal enterprise."if it's backed by the point of a sword, then IT IS NOT TRADE! it is a crime.if you don't understand the difference between voluntary exchange and extortion, i would urge you to review basic business ethics 101

In reply to by jin187

Kina 38BWD22 Sat, 11/25/2017 - 11:20 Permalink

It is quite easy for lawmakers to enact all sorts of laws of trade, commerce, tax, wealth investigation - with substantial financial and prison penalities that put a lid on bitcoin.If people think they can hide their wealth from regulators and the IRS via bitcoin will have a nasty surprise whenever they accumulate an asset whose source of funds they cannot explain.In fact I can postualte a number of laws right now, including Capital Gains tax that will give many a second thought on this.If the authorities are allowing it as it is, beware, there is a reason for it, and that normally isn't good news for anybody but them.It is the same problem for all forms of wealth, when you exchange some of it for an asset you want - a new house, ferrari, new toyota etc.......then the IRS asks...where did they money come from?  And they make laws that all asset purchases over $1,000 must disclose source of funds/payment, with severe penalty for lying.

In reply to by 38BWD22

cro_maat Fri, 11/24/2017 - 15:56 Permalink

I agree he makes a few good points but his main one at the top is ridiculous:"I referred to bitcoin as "a fraud decorated with technology."  The fraud comes about because the exchange of a fiat legal dollar for a token, to use the kind description adopted by the Securities and Exchange Commission, seems unfair and frankly incomplete."So it is unfair for the end user to exchange an FRN (created with a keystroke somewhere in the bowels of the FED - and unauditable) for a blockchain digital token with open-source code and peer reviewed?Unfair to who? Why the Bankers of course. Remember you are not allowed to count cards in a casino or otherwise override the ponzi. Same as it ever was.

MonetaryApostate cro_maat Fri, 11/24/2017 - 17:10 Permalink

You do realize that all monetary systems steal from you & are controlled by the money printers?  Do you think for a minute that they'd let some smuck with a computer create & control a monetary system?Security = the loss of freedom, control, & anominity, period.Cryptos are an investment casino design to lure in wealthy with price discovery & force everyone to pay fees & take hair cuts often.

In reply to by cro_maat

Breathial cro_maat Fri, 11/24/2017 - 18:44 Permalink

If you don't- or cant- hold it your, store it or trade it without technology OR detection,  you got NUTHIN. You got tulip bulbs.  I'm sure everybody in the tulip bubble mouthed the same silly justifications as you.  And who knows, maybe you'll get out before the pop.  But I doubt it.I'll keep stacking PMs.

In reply to by cro_maat

jin187 Breathial Sat, 11/25/2017 - 05:54 Permalink

Our prisons are filled with people that dealt illegal things, cash only, face-to-face, without technology. It doesn't matter if they make guns, gold, or cryptos illegal. They'll know who's got them, and where to find them. If your rainy day fund is anything other than an impenetrable bunker full of food, water, and guns, you're not going to get the mileage you thought you would when shit hits the fan. I wonder how many people in PR handed over a sack of gold, or the flash drive with their entire BTC wallet on it, for just a few cans of beans.

In reply to by Breathial

8th Estate Fri, 11/24/2017 - 16:29 Permalink

The military say "No plan survives contact with the enemy"Mike Tyson said "Everyone has a plan until they get punched in the mouth"The crypto-dwellers better have a plan when the State punches them in the mouth.I can see a few options:Launch their own and ban all othersTax the crap out of itCriminalise it and go after the exchangesCriminalise it and go after the usersThere will be lots more.To paraphrase Rothschild, "give me control of a nation's laws, and I care not which innovations emerge"

messystateofaffairs Fri, 11/24/2017 - 17:24 Permalink

The first paragraph of this article told me that rcwhalen knows nothing about money and cannot differentiate between fiat and specie. Regarding the usual tulips I refer mr. whalen to Tiny Tim and his ukulele.

Michigander Fri, 11/24/2017 - 18:04 Permalink

Christopher Whalen aka rcwhalen is an investment banker and author who lives in New York City. He is Chairman of Whalen Global Advisors LLC and works as a consultant and banker focused on the financial services and mortgage finance sectors. From 2014 through 2017, Christopher was Senior Managing Director and Head of Research at Kroll Bond Rating Agency, where he was responsible for the firm’s Financial Institutions Group. Ah yes, a fucking investment BANKER that hates BTC. Go figure...

Momentarily Lucid Fri, 11/24/2017 - 18:02 Permalink

I believe that there are some major flaws in rcwhalen's article that only serve to highlight the growing fear of crypto-currencies by commentators and operators in the current Fiat bubble scam.They are perplexed and alarmed by the prospect of not being able to control or manipulate decentralized currencies to their advantage, and therefore attempt to vilify what they obviously don't understand. You can let slip the old misunderstood Tulip bulb gibe, but the 'nefarious' use of Bitcoin is laughable.I don't hear anyone suggesting that perhaps Dollars should be outlawed even though Dollars are currently used for the vast majority of nefarious activities - drugs, guns, extortion etc etc. and I didn't see anyone from HSBC being jailed for laundering cartel drug money despite setting up a whole financial arm to do just that. Unlike cryptos, the supply of Fiat currencies is totally unlimited and in real terms worthless.Whilst China has indeed temporarily suspended exchanges (as did Japan) it would be quite wrong to suggest that Bitcoin is "tightly under the control of China’s communist rulers."This is incorrect for several distinct reasons: any Country that attempts to ban cryptos knows that it will be left completely behind in the fourth industrial revolution. The public will, and have found numerous routes around such attempts at blockage, and the next generation of exchanges will themselves be decentralized, and therefore unable to be shut down or regulated against (see OmiseGo).Importantly many commentators focus on Bitcoin and fail to understand that many of the new crypto-currencies are not designed to be currencies at all, they are secure peer to peer platforms and protocols. These are now being embraced and rapidly adopted and by business in the exactly same way that the Internet was, as they provide multiple advantages over existing systems.Just in the same way that old off-line business models are being slaughtered by Net-Centric enterprises, they too will be swept aside by failure to recognize and adapt to the cryptographic revolution. The energy inefficiency of Bitcoin, and other block-chains will eventually lead to their demise.Imagine all the factories turning out GPU's, shipping them across the world, and the sheer energy requirement to run huge mining operations.All totally unnecessary, and eventually unsustainable.Iota, however, adds the security of block-chain technology without the cost of miners, energy and hardware along with ultimate scalability.The general public will use it on every Internet and Mesh connected device and need never be aware of it's existence, it will be used on automated vehicles, charging stations, robots, warehousing, and machine to machine interactions as there is no barrier to entry or cost associated with it's use.Historically all systems, financial, mechanical and otherwise evolve towards efficiency, and that is why I believe that Iota or a similar pre-mined quantum-proof Directed Acyclic Graph will replace most existing block-chain solutions to become the global system.

Dwain Dibley Momentarily Lucid Fri, 11/24/2017 - 21:59 Permalink

Bitcoin is not a currency, it does not circulate as a standardized medium of exchange and it is not a unit of account. Bitcoin is an electronic toy, a fad for speculators and it will never be a readily accepted currency.The only value of money is in its use and acceptance as a medium of exchange and unit of account, and its only worth is in what it can buy.  This holds true for all money, regardless its material construct.

In reply to by Momentarily Lucid

jin187 Momentarily Lucid Sat, 11/25/2017 - 05:42 Permalink

Simple fact is that BTC is the dominant crypto at this point. Billions are being sunk into it, by everything from hedge funds to basement dwellers. If it dies as you say, and gets replaced by more efficient blockchain, that's gonna fuck a whole lot of people out of a whole lot of billions. It's more likely that most of the faith in blockchain currencies dies with it.

In reply to by Momentarily Lucid

Nomad Trader Fri, 11/24/2017 - 18:30 Permalink

I've been a professional trader my whole life and neither me, nor anyone I know, owns Bitcoin. Why? Because if the price stopped going up (which is absolutely possible) then it appears to have no purpose. This compares to stocks and bonds, which pay a yield and have a claim on hard assets, and cash which can be used to buy stuff (note: besides a few websites, 99.9999999% of people/businesses do not accept payment in BTC). So tell me, outside of it "going up" what's the point of it? One of the best pieces of advice I ever heard was that you never make an investment on the potential of an idea. As such, it is at this point, a pure speculative Ponzi that could collapse 90% at any time. Anyone denying this is either being dishonest, or they really don't understand markets, investment flows, human nature, and the madness of crowds. I wish all the Bitcoiners the best, but just understand, it is not an investment.

Dickweed Wang Nomad Trader Fri, 11/24/2017 - 19:00 Permalink

I wish all the Bitcoiners the best, but just understand, it is not an investment. I have been saying for a while that Bitcoin's only function at this point in time is as a means of transferring wealth or as a speculative investment. And now unless you are willing to buy in with tens of thousands of dollars, or more, your chances of making any real money in the Bitcoin "market" are pretty slim.  It's certainly not good for anything else anymore as it's limited function as a payment mechanism (mainly on "dark web" sites) has been reduced significantly due to the extreme time lags in both buying and using small amounts of Bitcoin in a transaction.  So in the end, what is Bitcoin really worth in the real world??  The fact that governments can and do control the means to transfer Bitcoin into other "usable" currencies is the Achilles heel of Bitcoin and all other cryptos.

In reply to by Nomad Trader

myopinion Nomad Trader Sat, 11/25/2017 - 12:00 Permalink

I became a trader because of guy's that talked like you. Never more true words spoken from a group of people about to get their faces ripped off. You've just been hit by a train but you don't realize it yet.  Me thinks you'd best start hedging out of your playpen a little bit. The real risk is in fiat. Your post is a perfect example of a paradigm shift in real time, lol.  Thanks for that!

In reply to by Nomad Trader

atomic balm myopinion Sat, 11/25/2017 - 18:58 Permalink

I graph btc to gold ratio, drawing trend line with french curve when the trend line goes vertical, or nearly so, the end is nigh.  this is now, or very soon it works best for timing.  this ratio may go straight up, or it may just bust the trend line the end is VERY near for SHTF in earlier periods of this [type of] market it is quiet- strong hands are buying.  then weak hands enter.  at the end only weak hands are buying- BUYING BECAUSE THE PRICE IS GOING UP.  look how smart i am becomes why couldn't i see it STRAIGHT UP MARKETS ARE ALWAYS IN WEAK HANDS AND TEND TO GO STRAIGHT DOWN 11-25-2017 I will republish this when SHTF.  Sooner rather than later.

In reply to by myopinion

JeffB PumpherDumper Fri, 11/24/2017 - 23:12 Permalink

Do you disagree with this sentence of his: " If bitcoin were to ever grow large enough to present a viable alternative to the world of fiat legal tender dollars, the threat to America’s government monopoly over money would require a political reaction akin to FDR’s seizure of gold -- in the name of self preservation." It looks like they're going to be closing the sales tax loophole online merchants have enjoyed for awhile: When Bit Coin becomes enough of a threat they can shut it down easily enough... or certainly be a big threat to do so. I imagine an EMP could be another serious threat.

In reply to by PumpherDumper

libertyanyday stacking12321 Sat, 11/25/2017 - 04:54 Permalink

" Stop running around and spouting ignorance, dummy."  your word choice makes this a message for your own consumption.Ad hom detracts from debate and the best way to win converts is thru debate not ad hom.That being said: BTC is a self reporting IRS tool for those stoopid enuf to use it  A ledger that records all transactions for public scrutiny.............yea that never goes wrong.Gold  is used to prevent this " trackability".  BTC can be declared counterfeit tomorrow.........and their is nothing you can do about it. No thanks , gold coins for me.

In reply to by stacking12321

stacking12321 libertyanyday Sun, 11/26/2017 - 03:14 Permalink

i stand by what i said, M.A. is a dummy, he doesn't understand the subject he's posting about, but feels the need to post excessively on the far as btc being a "BTC is a self reporting IRS tool for those stoopid enuf to use it", you should understand what is and what is not reported.a btc wallet address IS NOT a person's identity.btc is anonymous IF YOU TAKE PROPER PRECAUTIONSfor more info see for example: this comment you made is nonsensical:"BTC can be declared counterfeit tomorrow."it's like saying gold can be declared counterfeit tomorrow - why would i care if some idiot opens his mouth and declares btc or gold to be counterfeit? why would i care about that?

In reply to by libertyanyday

Rhody44 Fri, 11/24/2017 - 20:02 Permalink

Blockchain techno is ground breaking and highly disruptive to the current recording of assets and ideas and the transmission of those values between participants. Trustless verification is a key with BC tech. I don't have to trust my bank, the IRS, Western Union or a title security company to keep a legitimate record for me. It must be frightening to the current "system" to see their ultimate demise in the disintermediation of their business model. They are still producing buggywhips while the BC is making cars and drilling for oil.One of the key phrases I take away from the article is "the USD is still a medium of exchange, but not a store of value". It was only 30 years ago that the USG was humming along with faxes and letters. They are in full-on internet mode now and would collapse without it. Near real time comms and transactions fly around globally on fiber backbones, so the comms element is there. Now comes the "upgrade" for the rest of the system to again take off to a build a better, more fair and verifiable platform for common people. I hope that the voting process keeps pace with this. To look at the BC as a monolithic structure is really negligent. A BC is a trustless [no thieves, politicians, regulators or bureaucrats] system based on a precise mathmatical script immune from individual or corporate interference. It's available to anyone who participates on the network, free or fee based. All BC's are a highway for something--coins or tokens. Coins have a limited supply. They can be a real store of wealth if they are limited in nature regarding production. This is a  safety valve for the individual to trade fiat for coins. As trust in the old fiat central bank model dies, the BC coins will be a space to run to for wealth storage from any nations constant debasement of their currency. Global crypto exchanges are the on-ramp for fiat to ecoin conversion. Limited issueance and ease of usage will determine which coins meet the test.Digital currencies already exist. They are tied to central banks and their consequential governments. Pm's are a wonderful way to insulate from inflated fiats. That needs to be in the portfolio mix. Maybe the "new CD" needs to be a crypto coin that can absorb the trillions of fiat that are already rushing into cryptospace to stave off the loss of purchasing power in national fiat-based economies. Like BC coins, tokens have their place in funding and powering digital platforms that are an integral part of this disintermediation. Why pay GSachs to sponser an IPO at 30% when it can be done for 1% online. Please tender your ideas and outrage to my post. I'm just getting started!

thurstjo63 Fri, 11/24/2017 - 21:06 Permalink

rcwhalen shows himself to be just as clueless about bitcoin as many in his crowd who purport to understand how the financial system does and should work. I grant that he does know how the financial system does work but is just as ignorant as Jim Richards and others who talk about bitcoin about how the economy should work in the poor or complete misunderstanding of where value is derived (go read Mises) in an economy, understanding the difference between blockchain, a class of blockchain applications known as cryptocurrencies and one of those cryptocurrencies known as bitcoin! No Chris, blockchain is just a distributed database. Bitcoin is a cryptocurrency application. And like many applications that have grew in value over time, there is a whole ecosystem that is being built up around it. Just like the ecosystem that developed around Google's search engine didn't spring up like a phoenix and in an instant and become the behometh that it is today, neither is bitcoin or the class of applications that it represents (i.e. cryptocurrencies). If Chris Whalen actually was paying attention to what is happening in the cryptocurrency space he would realise that the current phase of its evolution is where all the different cryptocurrencies are being tied together to obviate the need of a middleman (i.e. incumbent payment systems) in exchanging value for good or services in a peer to peer manner.As well, there is a fundamental flaw in his understanding of monetary value. Money derives its value not from the precious metals, not from the stamp of the queen or king nor from government dictate but from the economic activity that it creates from its' exchange across individuals and/or organisations, from the social bonds it creates, we make money valuable by using it. It's a great social illusion, Chris. One would think that having worked on Wall Street for so long that you would have understood that.Lastly, showing how utterly clueless he is as to the borderless nature of bitcoin in thinking that the government or governments could somehow shut down bitcoin or any other cryptocurrency built on public open ledgers that run in an decentralised manner!?! Well Mr. Whalen the only way that the governments of the world would be able to accomplish that is by shutting down the world economy including modern forms of communication itself. And in that scenario, I wonder how much would Google, Amazon or Facebook be worth in a world with no internet and no communications!!! It ain't going to happen because not only would the revolution start but all those titans of industry would be up in arms themselves. You should actually know what you're talking about before you venture to comment on it next time, Chris.

Disgruntled Goat thurstjo63 Sat, 11/25/2017 - 01:46 Permalink

Whalen should have been so concerned about "fraud and larceny" when he was an ibanker, but strangely, it didnt matter much to him then. I also dont get his concern about BTCs "upward bias" , considering the state of the S&P, and the triple digit earnings multiples of companies like Amazon, Netflix, and others.BTC, though not perfect, is a reaction against the fraudulent nature of both fiat currency and the capital markets.

In reply to by thurstjo63

jin187 thurstjo63 Sat, 11/25/2017 - 05:34 Permalink

This is why I don't think BTC will become a common currency. Most of the current adopters are people that are treating like a shiny new commodity. They're hoarding it in anticipation of those 1000% gains. When that gravy train leaves the station, there will be a bunch of people that jump off, never to return, and a lot of bad press to go with it. BTC will likely survive, but the eagerness for people to switch to using it to buy groceries and such will be greatly diminished, as will mining activity. Hell, at this point, the ludicrous gains are already the only thing that's keeping the mining going. That's gotta stop at some point.

In reply to by thurstjo63

Aireannpure Fri, 11/24/2017 - 21:07 Permalink

Could someone please explain why credit card companies charge a BTC transaction as a cash advance when BTC is treated as an asset by the IRS? What are the tax issues on this conflict. The credit card companies are out of touch with the IRS treatment of BTC.

Rhody44 Aireannpure Fri, 11/24/2017 - 21:18 Permalink

The CC companies are trying to make up for lost time. They are treating it as an FX tx. They are behind the curve. If they grasped the idea of the cross chain fiat to crypto thing they would be able to lower their fees by 500% and capture the emerging BC market. They are likely using 3rd party intermdiaries at a hellacious vig to bridge their old world model to the new world model. They are already beaten. They are dead. Their will be a few existing credit card issuers who will stumble across the current finish line. New blood is likely to take this space over.

In reply to by Aireannpure

webmatex Sat, 11/25/2017 - 04:08 Permalink

Given a choice i would "trust" BTC more than the Dollar and US Government.They confiscated the gold, devalued the currency for over 70 years and created the petro dollar as a militariy backed fiat along with their filth FedReserve.My hands are clean with PM's and Btc.Japan, Korea, and now Russia governments all use BTC - only the US has a problem with it.Everytime they cry "tulip" they forget the tulip like nature of our financial system.Those dollars will be worthless, those stocks will crash, those bonds are dangerous. This is the real and most deadly tulip.If all that goes down you may be grateful for that 1 last Btc especially combined with a crash and hyperinflation.Is insurance a tulip?And stop with the Btc and taxes please - they tax everything else too don't they?