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Bitcoin Businesses The Almighty Buck United States

The People of Ohio Can Now Pay Their Taxes in Bitcoin (qz.com) 149

Posted by msmash from the for-the-record dept.
Starting this week, businesses in Ohio will be able to pay taxes in bitcoin through a new platform, OhioCrypto.com, a first in the US. From a report: For many enthusiasts, part of the appeal of crypto has been the very fact that these currencies are not backed by governments. That makes it harder for politicians to manipulate currencies to their own ends, they say. But for the same reason, states have sought to sideline cryptocurrencies, comfortable to dismiss bitcoin as a passing fad. So Ohio, and its treasurer Josh Mandel, see embracing them as a way to signal that the state is tech-savvy and forward-thinking. "I do see [bitcoin] as a legitimate form of currency," Mandel told (paywall) the Wall Street Journal.
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The People of Ohio Can Now Pay Their Taxes in Bitcoin More

The People of Ohio Can Now Pay Their Taxes in Bitcoin

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  • They better be cashing out the picosecond those BT transactions go through...

  • Just when you thought it couldn't get worse... (Score:5, Insightful)

    by djbckr ( 673156 ) on Monday November 26, 2018 @03:38PM (#57702954)
    I seriously cannot comprehend how mind-bogglingly stupid [some/most] politicians can be. How do these people even function in society?

    • Re: (Score:3)

      by AvitarX ( 172628 )

      I assume this is to associate wallets with real identities and then nail them with taxes.

      Oh, you day traded crypto and made $10k in 2017, well, we'd like our cut of the shorterm capital gains.

      • Re:Just when you thought it couldn't get worse... (Score:5, Insightful)

        by Actually, I do RTFA ( 1058596 ) on Monday November 26, 2018 @04:07PM (#57703096)

        Oh, you day traded crypto and made $10k in 2017, well, we'd like our cut of the shorterm capital gains.

        Oh no, people have to pay the taxes they owe. I'm so sorry for you.

        Fuck assholes who think "it happened on a computer, so it's totally different". Fuck the people who think that means they can patent 100 year old things done on a computer. Fuck the companies that think they can ignore safety regulations because they're booking hotel rooms on a computer. Fuck assholes who say "I'd don't owe taxes because I made my money on a computer"

        • Re: (Score:1)

          by Anonymous Coward

          Fuck assholes who say "I'd don't owe taxes because I made my money on a computer"

          I prefer this version:

          Fuck assholes who say "Everybody else can pay my share of the taxes because I made my money on a computer."

        • Re: (Score:2)

          by AvitarX ( 172628 )

          I tend to agree with you.

          My point is that everyone is ragging on the treasurer for allowing this, when to me it seems like an intelligent way to capture revenue that is due.

          • Re: (Score:2)

            by rtb61 ( 674572 )

            Most likely reality, a major Ohio business douche buried himself in worthless bitcoin and paid off a lobbyist to push this through so that bitcoin can be dumped. Watch out citizens from OHIO you are about to get butt blasted by speculative bitcoin trades, wow, I can't see how the SEC can accept it, in terms of the security of the assets of a state. The state can buy fuck all with the bitcoin and will become a major holder and seller, basically selling down the value of the asset it buys or hoarding it to to

        • Man.

          Bitcoin caused all that shit?

      • We have a winner!

        Sure, that transaction is anonymous - until it's associated with a real-life ID. And then EVERY transaction you've ever made is now 100% traceable. Oh, we see you sent a few thousand dollars to some account in Kazakhstan in 2014, what was that for? Oh, and you cashed out a few coins in December 2017, but no mention of income was made. And why were you sending Satoshis at a regular clip in 2015 until now, to a recently-convicted oxy dealer?

        • why do you think a single transaction tells you much about past ones?

          If you dont know how bitcoin works; why post nonsense?

          Hint: it doesnt work that way

          • Because bitcoin is pseudo-anonymous [bitcoinmagazine.com], and once I tie your identity to your wallet (like, having you pay your tax bill via BTC) I can now look at all transactions with that wallet and see what you did. Bitcoin - blockchains in general - rely upon 100% transparency AND traceability of all transactions, so connecting you to a wallet once has now connected you to every transaction of that wallet.

            • > I can now look at all transactions with that wallet and see what you did.

              What is a "wallet" in your mind? Do you realize that there is no such thing as a "wallet" on the public part of the blockchain ?

              There is no way to start from a single address and determine which other addresses belong to a wallet or not.

              Modern wallet software will not re-use any addresses, so its generally not possible to determine much of anything much else about the person or wallet beyond that one single address.

              There are foren

    • They can't. That's why they ran for office. Their screwups cost everyone else a lot of money and destroy lives, but they usually get off with little more than a slap on the wrist most of the time.

    • cannot comprehend how mind-bogglingly stupid [some/most] politicians can be

      Can you spell out what you mean? I'm assuming you mean your comment to somehow apply in the context of crypto currency, but past that I'm not clear what point you're making.

    • It might not be as stupid as you think. You see when you use the bitcoin to pay your taxes which are denominated in dollars you will trigger a capital gains tax. So next year they will know exactly how many bitcoin you "sold" to pay this year's taxes and if you do not have a capital gains entry for those coins then they know exactly whom to audit!
    • Comment removed based on user account deletion

    • It's worse than you thought.

      The voters:

      1.) Voted for those asshats or
      2.) Voted against and lost or
      3.) Didn't vote. [this is the majority vote]

    • Josh Mandel is a Republican, and has no qualifications to be treasurer so the chances he understands the implications of this are roughly zero.

    • Re: (Score:2)

      by AHuxley ( 892839 )
      What was once OAKSTAR of the NSA can now be done at the state level :)
      "The NSA Worked To “track Down” Bitcoin Users, Snowden Documents Reveal" https://theintercept.com/2018/... [theintercept.com] (March 21 "2018)

  • Unbelievably stupid (Score:3, Insightful)

    by bblb ( 5508872 ) on Monday November 26, 2018 @03:46PM (#57702990)
    This is almost certainly going to be ruinous for Ohio's bottom line. I highly doubt anyone associated with the Ohio treasury is as involved and up to speed on crypto transactions as they would need to be to avoid such a volatile currency blowing up in their faces.

    • Re: (Score:1)

      by Anonymous Coward

      Oh please, Ohio couldn't get any more morally or fiscally bankrupt if they imported a new government from Illinois.

    • Re: (Score:1)

      by Anonymous Coward

      You actually think they're going hold the payment in bitcoin? They're using bitpay, it's going to converted to fiat the moment the payment is made.

    • Mandel did not run for re-election, so he's out of a job in about a month. It may go away right then and there.

      Also, this sounds a lot like "you pay your taxes in Bitcoin and we will turn around and convert that to cash". The person paying their taxes isn't going to get a bill for 0.53BTC and then the treasury is going to hold onto them in perpetuity. Everything is going to be dollar denominated and the conversion rate will be on the spot. Today you might need to pay 0.53BTC and tomorrow it might be 0.6

      • Comment removed based on user account deletion

      • In any case, the theoretical delay time begins with ten minutes to post to the blockchain and at what cost to both parties?

        • Re: (Score:2)

          by KitFox ( 712780 )

          I also like the opportunity cost:

          "I paid 2 BTC for my state taxes and I'm glad I did, because they'd be worth $10 now if I kept them."

          "I paid 2 BTC for my state taxes and I'm sad I did, because they'd be worth $10,000,000 now if I kept them."

      • Mandel did not run for re-election, so he's out of a job in about a month.

        Sounds to me like when the IT guy gets fired and he changes all the passwords and leaves an open can of sardines inside the aircon vent before they escort him from the building.

    • as they would need to be to avoid such a volatile currency blowing up in their faces.

      Blowing up how? If you're worried that it'll devalue while they hold it, don't; they'll cash it right away. What else you worried about?

      • Re: (Score:2)

        by bblb ( 5508872 )
        For one, there's a transaction cost that they'll need to bear... but the larger issue, as mentioned, is that it's very unlikely they'll be able to adequately manage the volatility without losing money. Last week, bitcoin lost a third of it's value, this after it's value has already plummeted over 80%... that's the type of volatility we're talking about. Bitcoin can take massive losses day to day, Ohio doesn't employ anyone who's going to monitor this 24/7 so payments taken today can be worth a significant p
        • I'd think they wouldn't even have a human monitoring it; they'll just cash in btc for dollars the instant they're paid. I agree that I don't see a notable functional value add to their doing this in the context of paying taxes, but they're doing it for the symbolic value, sending the message that they're tech savvy, or at least not luddites. I happen to appreciate the sentiment behind that message, and I hope it works for them; but I understand that not everybody will choose to see things that way.

          • Re: (Score:1)

            by bblb ( 5508872 )
            They'll still be hit with transaction costs that vary creating instability in revenue and they still have the potential for loss from second to second with an automated transaction... there'll still need to be a transaction that takes some time and bitcoin value changes constantly. There only really exists a potential for them to lose, particularly if they're not planning this as a way to hold the assets counting on an eventual rebound or gain.

            • They'll still be hit with transaction costs that vary creating instability in revenue

              Transaction costs are known up front, and I'm sure they'll simply have the payer cover those.

              and they still have the potential for loss from second to second with an automated transaction... there'll still need to be a transaction that takes some time and bitcoin value changes constantly. There only really exists a potential for them to lose

              You're right that fluctuations may cause transactions to go through with slightly different values than those intended, but you're wrong to say they can only lose. Fluctuations are in general random, and on average will result in neither loss nor gain. And if things are on a long downward slope like they are right now (coming off the "speculation" nuttiness), they can simply add a small additional fee for the paye

              • Re: (Score:1)

                by bblb ( 5508872 )
                What they can do is a vastly different thing than what they're likely to do... and each of the things they "can" do also incurs a cost. There's no benefit to this. It's a sad attempt to appear to be forward thinking by accepting something that won't reasonably be a valid currency for years yet. Everything about this adds to the their overhead and it does nothing to save them money or encourage new revenue.
                • I'd agree that squinted at from the right light, it may rise in some's opinion to "objectionable". But "unbelievably stupid" seems overboard.

                  • Re: (Score:1)

                    by bblb ( 5508872 )
                    Fair enough... but it's entirely unreasonable to adopt additional expense strictly for the sake of appearing cutting edge, especially for Ohio. I could see California doing something this ridiculous, maybe even New York, and it still wouldn't make sense but for Ohio it's just stupid imo.

    • This is almost certainly going to be ruinous for Ohio's bottom line. I highly doubt anyone associated with the Ohio treasury is as involved and up to speed on crypto transactions as they would need to be to avoid such a volatile currency blowing up in their faces.

      The problem with Crypto is that is not stable enough to be consider as a day to day currency, as we are still years away from that point to happen.

    • Wait.

      You're reacting to this story as if every goddam citizen of Ohio owns bitcoin.

      I'm a betting man, and I'll wager that there are WAY more people who just don't bother to pay taxes than there are people who own (and will pay using) bitcoin.

      • Re: (Score:1)

        by bblb ( 5508872 )
        Introducing this much volatility into any percentage of their revenue is a mistake. Ohio isn't exactly overflowing with surplus tax revenue... they failed to meet revenue expectations for 11 of 12 months in 2017.

        • People who don't pay taxes via fiat aren't going to pay using bitcoin.

          • Re: (Score:1)

            by bblb ( 5508872 )
            Which is why people who don't pay taxes aren't a relevant part of the discussion as to how and why accepting payments via bitcoin will be a detriment to revenue... I know it's hard but try and keep up with the rest of the class.

            • Try posting with class. My post is in context. Go back and read up.

              • Re: (Score:1)

                by bblb ( 5508872 )
                Did you mean to type "with the class" or was my post not classy enough for you? No, your post wasn't in context. No one anywhere was discussing people not paying taxes except for you. You randomly brought up your irrelevant opinion that more people aren't paying taxes than will be paying taxes with BTC... then you randomly doubled down with a second irrelevant opinion that people who aren't paying taxes with fiat currency won't begin paying taxes with crypto currency. Everybody else is on one topic, wheth

                • TL;DR

                  TFS and TFA are about paying taxes with bitcoin. That opens the door for alternatives of paying by fiat or not paying at all.

                  Keep your eye on the ball. It's the little round thing.

                  • Re: (Score:1)

                    by bblb ( 5508872 )
                    No... that doesn't open the door for not paying at all! Are you daft? Not paying is tax evasion. But I guess if a small paragraph is TL:DR for you, it's unreasonable to expect you to comprehend anything like basic logic and reasoning. Better luck next time.

                    • TL;DR

                      OK, just kidding that time.

                      So, you're saying tax evasion, as an option, is off the table?

                      How does the introduction of bitcoin cause that?

                    • Re: (Score:1)

                      by bblb ( 5508872 )
                      I'm saying that tax evasion isn't relevant to the discussion of whether accepting bitcoin as a payment option for those not evading taxes is a good idea or not.

                    • Ever notice that long-thread response character counts are shaped like an inverted polyhedron in which the base is a polygon and all lateral faces are triangles?

                    • Re: (Score:1)

                      by bblb ( 5508872 )
                      I love lamp.

  • Manipulation (Score:3)

    by Waffle Iron ( 339739 ) on Monday November 26, 2018 @03:51PM (#57703014)

    For many enthusiasts, part of the appeal of crypto has been the very fact that these currencies are not backed by governments. That makes it harder for politicians to manipulate currencies to their own ends, they say.

    Who needs the government to manipulate your currency when speculators already do so with tumultuous and unpredictable swings in value every day?

  • I thought the appeal behind bitcoin was supposed to be it's anonymous (really pseudonymous). I thought gold was supposed to be the "I don't trust fiat currency" asset.

    • Bitcoin isn't anonymous, or even pseudo anonymous. I"m pretty sure that is the #1 answer in the FAQ.

    • Re: (Score:3)

      by jwhyche ( 6192 )

      Actually, when it comes to being anonymous or even pseudonymous it's worse than checks and credit/debit card transactions. Say, I buy 10 kilos of blow and pay with a personal check, a very stupid thing to do. There are laws in place that prevent the local bacon brigade from simply going down to the bank and digging through the books till they find something. They have to go through procedures, get warrants, and have probable cause. Then they narrow their search to specific parameters indicated in the

  • They are not taking bitcoin, they are taking USD. Some pay provider converts the coin to USD and hands them over. This would be like saying you can pay with beanie babies if the same provider would take them as payment.

  • Michigan agrees to accept Beanie Babies as tax payments. Colorado agrees to accept Magic Trading Cards. And in a surprise move, California will accept any baseball card printed prior to 1965.

  • It means I can pay taxes without having to use the US banks. The US banking system is horrible at the best of times. If you happen to be black or live in an undesirable part of the USA it is out right abusive. Crypto currencies don't make a lot of sense in most countries but in Venezuela, Zimbabwe or the USA they do. So thank you Ohio.

  • "So Ohio, and its treasurer Josh Mandel, see embracing them as a way to signal that the state is tech-savvy and forward-thinking."

    Like Orange County California, I bet
    https://www.investopedia.com/a... [investopedia.com]

    Just like Robert Citron, Josh is playing with other people's money. He should get smacked down fast.

  • This is how bad things have become for Bitcoin (Score:4, Informative)

    by timholman ( 71886 ) on Monday November 26, 2018 @04:52PM (#57703442)

    This story is getting a lot of hype from the BTC evangelists. Of course, the truth is that Ohio is only accepting dollars for taxes. The Ohio treasury is using BitPay to convert BTC immediately into dollars, minus whatever fees are charged for the conversion. Unless you've already had BTC in your possession prior to 2017, what's the point?

    The question that BTC evangelists hope you won't ask next is "Who else is still accepting Bitcoin for payments?" Here's a list of companies as tallied last month: https://unblock.net/companies-... [unblock.net]

    You might recognize maybe half a dozen names from that list. As a means of conducting day-to-day retail transactions, BTC has dropped off the map. It is rarely even mentioned anymore.

    • There are 5 places within 30 miles from my location and all of them are Chinese restaurants.

      • Re: (Score:2)

        by vux984 ( 928602 )
        Or maybe... There are 5 places within 30 miles from my location and all of them are fronts for money laundering.
    • It means credibility. It's like when a platform lands a major client, like Chrysler or Hilton or BP or something. A state government is a pretty good win. I'd put it in my company's advertising. It has the effect of convincing people, "I'm not a joke" or "I'm not a small-time operation".

  • Unconstitutional (Score:3)

    by Savantissimo ( 893682 ) on Monday November 26, 2018 @05:10PM (#57703554) Journal

    States can't make any thing other than gold or silver coin a tender in payment of debts. The legal dodge is that the states aren't the Fed or the Treasury, so it isn't they that are making the requirement of transacting in fiat Federal Reserve Note dollars, so the constitutional restriction does not apply. This dodge fails if a state decides to accept something else as a tax debt payment.

    Arguably a necessary characteristic of money is being able to pay your taxes in it, for instance the success of Worgl stampscript (negative interest currency) experiment of the '30s came largely from the local government accepting it as tax payment. The local government also issued it, which gave them the reason to accept it. The negative-interest aspect (had to buy stamps to affix to keep a currency note current) led to a huge increase in the velocity of money as people wished to avoid paying the stamps, and also a huge move toward long-term investment as negative interest rates turned the present-value calculation upside down, making money worth more the further in the future it would be taken out, rather than future returns being discounted.

    • Re: (Score:2)

      by suutar ( 1860506 )

      it sounds like they're not taking bitcoin themselves, they're just willing to connect to a bitcoin-dollar exchange to make your transactions simpler. They only wind up getting dollars.

  • Ooopsy, only a year late to the party :)

  • If there's any practical gap between the nominal value and the cash liquidity of Bitcoin, Ohio had better brace itself for a stampede of Bitcoin payments.

    If there's any practical gap, this might be a cynical move on the part of some wealthy Ohio speculator with political connections.

    Most likely this is some person who scored a Bitcoin windfall and now wishes to return to an actual cash position at face value, who increasingly anticipates a Bitcoin implosion any day now.

    • Ohio isn't taking bitcoin directly, they just have a vendor who will take [they don't care how much bitcoin] and gives them [$ you owe[. Your taxes are denominated in dollars.

      • of course, no sane government would take taxes in any so-called cryptocurrency.

        it is a fad and scam, and it's running out of gas. don't be a bagholder.

  • Let say I earned $100k this year. How much do I owe in BTC? Can I play the volatility at my advantage?

    • Your side is USD -> Middlemen -> BTC then Ohio is going to go BTC -> Middlemen -> USD. The middlemen in both transactions will be a combination of your banks, and the exchange provider who is commiting to buy and sell at some fixed price at a moment. Increased volatility puts that exchange middleman in greater risk so it doesn't help you.

    • Re: (Score:2)

      by jezwel ( 2451108 )
      You owe your taxes in US$. Uncle Sam wants to see that amount show up in the IRS coffers, so he doesn't care whether it cost you 1,10,100, or 1000 BTC to get that amount there.

  • I'm pretty sure they did it solely to shut up that guy who always posts that "Bitcoin isn't a real currency because you can't pay your taxes with it". ;^)

  • They are hoping their tax revenue will sextuple when Bitcoin goes to new highs.

  • Not ready for cryptocurrency. Or any science at all.

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