Why Digital Currencies Have No Future

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Competing currencies offer a free market solution to break the Federal Reserve's monopoly on money. However, will it ever be achieved? Why or Why not?
Implications of IRS Notice 2014-212.1. Complexity in Transaction Accounting Given that digital currencies are treated as property, every transaction-no matter how small-becomes a taxable event. This requires users to track the cost basis, sale price, and gain or loss for every transaction, making using digital currencies for day-to-day transactions burdensome.2.2. Discouraging MicropaymentsOne of the potential advantages of digital currencies is the feasibility of micropayments. However, the intricate tax reporting requirements could discourage their use for small transactions.2.3. Stifling Innovation and AdoptionBy introducing cumbersome tax obligations, the IRS notice might stifle innovation and deter individuals and businesses from adopting digital currencies for routine transactions.
For the foreseeable future, the dollar is here to stay and can not be replaced by digital currencies. This is my claim, and if you disagree, leave a comment. Even with the evolution of accounting software, it does not make it practical..

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1 окт 2024

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Комментарии : 105

@Pepesplants 10 месяцев назад

Not only is tracking how we spend our dollars a problem but they can shut you down from being able to buy or sell. Don't you see that as a threat to liberty and freedom? Seems like your okay with the protentional for tyrannical banking.

@awesomeness7117 10 месяцев назад

Facts

@EconLessons 10 месяцев назад

If we did not live in a transparent democracy, that would be a significant problem. And I am big on privacy. However, give me an example of an economic transaction that one would want to be kept private? Maybe a donation to an organization like Pro life for example, that if the current government did not like that, you could be deemed as a troublemaker. So I can see your point. So, the potential could exist theoretically. But most people who want to keep economic transactions private are about doing something really bad like drugs or trafficking. I do I wish we could have competing currencies, the the IRS will not allow it to be practical. I do understand it. They do not want black market operations to proliferate.

@Pepesplants 10 месяцев назад

@@EconLessons When the government controls the money and the food and your movement that's a problem. I don't need to be a criminal to be concerned. Think deeply and you will see what I mean. When the government decides what your politics must be and can shut you down you are a slave not a citizen! That alone is a good enough reason and I bet you can find more reasons if you try. As far as a transparent democracy. You are joking right?

@Pepesplants 10 месяцев назад

@@bitteroldman701 How could a citizen do that? The banks own us all. We are slaves and to be free we must break the chain of debt and the control by central bankers.

@patrickready7862 10 месяцев назад

Respectfully I disagree. Throughout history, private transactions were the norm and things worked out just fine. Cash is a great example, and most illegal activity happens through cash transactions anyway. Using the blockchain for illicit activity is silly since it's actually easier to track. The government doesn't really need to know what we are buying to protect us if that's what they really wanted to do.@@EconLessons

@darbnrets1214 10 месяцев назад

This guy is a product of the system. This wont age well.

@EconLessons 10 месяцев назад

What system? I would like to take down the Fed power and have competing currencies, but it will not happen. So Within the content of what is good, moral and legal, we can work within the system. I do believe we have a Republic.

@EconLessons 10 месяцев назад

@@bitteroldman701 Interesting story. There is a system, which is inherent in anything humans touch. However, it is political discussions like this, more than anything, that keep things free.

@EconLessons 10 месяцев назад

@@bitteroldman701 Thank you very much for your comments! I mean that sincerely. I respectfully may disagree but I like the conversation.

@ALifeWellSteved 10 месяцев назад

I hear you but this is like saying in 2000 that "Digital media will never overtake physical because Corporations have a monopoly on creative licensing". I get taxed every time I spend a dollar now, heck I get taxed when I earn the stupid things too. If being taxed meant a currency wasn't going to work how the heck are dollars working now? As a US Citizen I get taxed even if I move and earn money in another country. I feel like the problem has to do more with Taxes and the IRS, which I don't remember voting for. I seem to recall something in history class that had to do with "Taxation without representation" but IDK must not be that important.

@EconLessons 10 месяцев назад

If I was king, I would have no Federal Reserve and I do not like taxes at all. But, that being said how do we get rid of the bad actors of the world? That is the main reason, the mil. budget that we can not control are budget. We have to be patient as the world conscientious evolves away from dictators. Then I hope we can cut the budget have a peace dividend and grow out of it.

@ALifeWellSteved 10 месяцев назад

@@EconLessons I’m not going to stop bad actors but I can stop playing on their court with their rules and their ball and go do something new where the rules are the same for everyone. Money doesn’t wage war people do. I’m not sure any currency will fix the hearts of all men but war looses a lot of it’s profits when the most valuable thing on the planet isn’t a physical thing you can just smash and grab. Good discussion though and thank you for the response! Hopefully this helps with the engagement.

@EconLessons 10 месяцев назад

@@ALifeWellSteved Good discussion! Hear hear.

@gnice8765 11 месяцев назад

I was just thinking of you and that video you did spoofing Yellen. Every point you make stands on the shoulders of ancient white hairs like her. We are moving into a new financial world. Maybe you should watch some wall st for main st. He just interviewed luke groman

@EconLessons 11 месяцев назад

Good advice I will have to look at that.

@EconLessons 11 месяцев назад

Look at that guy's channel. 13 years ago, calling China a bubble. 2k+ videos on the negative narrative, pumping it for views so people get addicted to the bad news. For me personally, that is boring. I would rather work in my garden and see the beauty of life. I want to keep it real. Not predict the great crash and how bad everything all the time. I want to tell it more balanced. Yes I do not like all actions of the Fed, but there are more components and variables than just the Fed. The real economy for one.

@biform13 10 месяцев назад

Every paper currency ever tried has failed so far. 100% of the time. But THIS time it'll be different because you have an "education".

@EconLessons 10 месяцев назад

The British Pound and the US dollar have been around for a while as well as the Polish Zloty and others so paper money can work. It does. However, I personally and for a classical gold standard.

@EconLessons 10 месяцев назад

@@bitteroldman701 Yes and your faith and ideals. Focus on these and you will not have to worry.

@EconLessons 10 месяцев назад

@@bitteroldman701 Put faith not in the military or governments but in God alone. What specific theory do you refer to. Be very specific as I am trying to understand your statement.

@ihavetofishable 10 месяцев назад

Money(currency) supply is NOT decreasing. CASH(paper) may be decreasing but the currency supply is now growing perpetually AND EXPONENTIALLY!!!

@EconLessons 10 месяцев назад

Send the link to where you have the evidence that M2 is increasing. If it is not M0 or M1 or M2 or M3 how do you define money?

@garethbarry3825 6 месяцев назад

Hmmm...not sure if i agree with this. Some countries are starting to use bitcoin as a medium of exchange- and the volitility is less than what it is in many countries. To my mind, bitcoin fulfills all the requirements of money- and if people start using it as a medium of exchange- i dont think there is a whole lot that (especially 3rd world) governments can do about it. This is already starting to happen.

@EconLessons 6 месяцев назад

I understand but no one is using it on a large scale. That by definition is a medium of exchange.

@badfish963 10 месяцев назад

Bud, you are misinformed. "not supported by governments" does not necessarily indicate "private". Government does not hold the the only public space. When speaking on terms of Bitcoin It has a public ledger so this ledger is not completely anonymous or private. This currencie's rules are defined by its users and and governed using code and the blockchain itself. I could go on.......almost all of your arguments were not topical. Cash Is not an asset? I think you are indicating you do not have to pay taxes on cash gifts? Your capital gain Idea is squashed because software can calculate your gains and losses. I have to wonder if this video was just click bate to cause me to write the post......One thing, you might want to think about, when considering this topic is what does the future tax law look like and how people are waking up to the idea that governments should not control the money supply and should be held accountable to it.

@EconLessons 10 месяцев назад

Cash is an asset. But there is a lot here. Let's look at the most important. If I buy something, I must pay a capital gain or loss on digital currency. Small chance that tax law will change in the future. There is too much potential for illegal transactions and, hence, no political will on either side except for the libertarians. Accounting is a huge pain, so it is a non-price cost. Even if there is software, it makes it very complicated for most. I was an investment accountant for large corporations that held 1/2 a Trillion in investment assets, and I was pretty high up. The Middle Office has a significant expense for accounting and taxes. It is more complicated. I wish, that we had competing currencies. I am a free-market monetary economist. But I am telling you few people on the street are willing to pay the implicit cost of accounting for a gain or loss of a tax basis to use something in the Cyrpto space.

@68macun 10 месяцев назад

Its.not about being a currency its about control. They can say your only travel is to and from work any more than 15 miles and your digital money doesn't work. Or at a click of a button you now have no money.

@EconLessons 10 месяцев назад

Yes, but if the IRS taxes any non-dollar currency as an asset, what can we do? I do not believe there is a "they" who wants to control that much. Maybe in the form of media companies trying to push people's emotions or pharma and their influence on the population to consume, but not boring economists at the Fed.

@k98killer 6 месяцев назад

I appreciate your concerns, but there are several issues with this analysis: 1) Bitcoin transactions are completely transparent. Sats can be traced as they fliw from address to address. That's the point. Fiat is better for criminal use and far exceeds Bitcoin use for this purpose because cash is untraceable. Bitcoin is also useless for money laundering because it can be easily traced, so fiat once again is more common and useful in this regard. 2) The existence of shitcoins is a temporary phenomenon. Bitcoin eventually absorbs all value from all shitcoins. 3) The industrial utility of a commodity is inverseky proportional to its monetary premium. The ideal money has no industrial utility. Compare silver to gold: gold is practically useless by comparison, yet it continues to demonetize silver decade after decade, century after century, well in excess of the ratios of both stock and flow. Bitcoin has practically no industrial utility and can be teleported around the world at a small fraction of the cost necessary to transact in metals, so it is thus an ideal commodity money.

@EconLessons 6 месяцев назад

You can just give someone a USB and that is it. There are ways around it.

@k98killer 5 месяцев назад

@@EconLessons ah, like the OpenDime. I suppose that is true.

@kludgedude 10 месяцев назад

And neither does gold…which will go to $0

@EconLessons 10 месяцев назад

Your claim is gold will go to $0?

@joeacquavella6548 10 месяцев назад

Wouldn't gold or silver have the same problem with capital gains?

@EconLessons 10 месяцев назад

100% it would. But if I were to hold something that I pay a gain on, I want a real asset or a stock that is indirectly connected to a real asset. I want gold. I do not wish to do something digital. I would use gold as a store of value, rather than a medium of exchange, but you can, in some cases, if someone wants to accept it. Gold also does not fluctuate that much. So It is a great store of value I do not have to stress about. If there was a world 'event' then gold is perfect money and I am OK. If not, at least I have a store of value.

@joeacquavella6548 10 месяцев назад

@@EconLessonsI agree! I'm a silver bug and have some gold and platinum too but not a penny in cryptos since they are not a store of value since they have no intrinsic value (i.e. no utility outside of its use as money) to store.

@EconLessons 10 месяцев назад

@@joeacquavella6548 Gold, Silver and Platinum will have value in 100 years. I can not say that about the dollar and even less about cypto. How can you argue with that? Precious metals as these hold value. Go back in a time machine or forward and gold is always valued. Thank you.

@rbir2653 5 месяцев назад

They appear like gambling. However my kids trade none existent items in video games and other kids trade for money. An imaginary item of clothing for a character in a video game. However they all go back to a hard currency.

@k98killer 6 месяцев назад

I disagree with a number of points, but at least nobody is saying anything about "intrinsic balue", which doesn't exist, so that's a plus.

@khkgkgkjgkjh6647 11 месяцев назад

It's not a big deal in practice, there's already software which takes care of calculating capital gains automatically for Bitcoin transactions. As it's digital and there's a log of every transaction, it's quite an easy task. On other note, it's just matter of legislation (for example, in many countries you don't have to pay capital gains tax under a set limit). In countries where Bitcoin is official currency (El Salvador), there's no capital gains tax at all on it. If Bitcoin is successful otherwise, legislation can be changed to make it more suitable as a currency. It's not an insurmountable problem that will stop it. On the privacy issue, you have to think in terms of society, and not from selfish perspective. It's an issue if government can track and control, for example, donations to political activism. This already happened in Canada, so it's not a conspiracy. All systems of control are bad, even if they aren't immediately used. Freedom to transact is closely related to freedom of speech, and are fundamental in keeping democracy as an actual democracy and not just a theater. Just being monitored will change behavior.

@EconLessons 11 месяцев назад

Yes I can do it with capital gains and so can you and software does help but for mass use, it has to a change in the law as most people will not bother with it. About privacy, interesting about Canada. But democracy has been tested for 100s of years. Unless you are an extremist the parties are pretty clear. You have fiscal issues, global issues and social issues. Fiscal issues are spend more or spend less. global issues are isolate or participate. Both fiscal and global are not a big deal in terms of privacy. However, social issues I think are the only one that could cause problems as it is connected to an interpretation of morality in a personal way.

@kirkjohnson6638 10 месяцев назад

@@EconLessonsAnytime money moves, there is a potential for people to manipulate its flow and skim some off the top. Look at all the hype about climate change and carbon emissions. We now have carbon taxes enacted in many parts of the world and where, exactly are those carbon taxes going? What companies are receiving government contracts as a result? What government officials will be sitting on the boards of those companies when they retire from their government positions? It is not in anyone's best interest to let the givernment know anything about their spending habits. That information will always be used by some people to either extort money from the individuals or to manipulate them into buying things that they may not really need or want. The best way for an individual to be free and maintain their freedom is to be unknown to anyone. Privacy is freedom.

@EconLessons 10 месяцев назад

@@bitteroldman701 It was unfortunate about the truckers, I have to read more about it as I do not know a lot on the subject.

@Janiix89 11 месяцев назад

I might encourage you to watch Glenn Greenwald's ted talk "why privacy matters" from 9 years ago

@EconLessons 11 месяцев назад

I just watched it, thanks. I do believe in privacy, of course. I am a quasi-libertarian about economics. But in our current democracy, I can not think of what an individual would do that is both moral and illegal to a large extent in terms of economic transactions. I think the only thing that comes to mind in terms of privacy is the spread of information not accepted by those in power. But I think that is protected under free speech.

@fredguntern.e.4185 4 месяца назад

Question? Do you agree that the educational system, mostly the four to six year universities, in the U.S. is decades behind for educating the ones in school today especially when we are discussing technology? I believe this has been the case at least back to the 70's. Example: Most four year schools did not have computer science degrees for years and years after it's invention. But some tech schools did offer courses like RPG , and Cobal. Example 2: Climate science degrees are a recent development even as we were warned in the 70's that humans are creating a mega crisis, so here we are going from 325 ppm to 425ppm in carbon dioxide. Which brings me to the economics. Decades behind what is actually happening in the real world right?

@EconLessons 4 месяца назад

It has always been this way, academia lags behind the business world but the point is to give a conceptual framework to navigate rather than information.

@joshpitts25 10 месяцев назад

My boss recently went to Mexico and Jamaica in the last few months and every place he went to accepted the US dollar and he met people from around the world while traveling. These people from Europe, Canada etc all carried the dollar?? So I ask why is everyone carrying dollars?? This is within the last week. My boss was surprised and so was I. I don't think the dollar is going anywhere anytime soon people. Methinks it's misinformation.

@EconLessons 10 месяцев назад

Excatly. Anywhere I go they take dollars. In Russia they take dollars. In China people take dollars. In India they take dollars. The dollar is not going anywhere. The Great British Pound is not going anywhere. The Swiss Franc is not going anywhere. Crypto, is about speculation.

@TheFakeyCakeMaker 10 месяцев назад

The issue is not whether you care about being tracked because "if you do nothing wrong you have nothing to worry about" you should be concerned because one day the things you like to do like go to church and buy organic alfalfa could become illegal and your purchases could be used against you. Imagine going to buy a bible only to be then called a terrorist or an enemy of the state and if you don't think that's going to happen you're really not understanding what's going on.

@EconLessons 10 месяцев назад

I do understand what you are saying, but that is a long stretch. I could weave any hypothetical scenario but that is not realistic. But I do appreciate and liked your comment!

@deeetherton445 10 месяцев назад

The issue we should really worry about is that you will be prevented from buying the Bible at all. Add to it alcohol, sugar, fats, or any other thing the government doesn't want you to have in your life.

@EconLessons 10 месяцев назад

@@deeetherton445 The Bible is protected under the First Amendment. That is not going to change. Sugar and fats, no way, just not reality. They had prohibition but will not bring it back. I think C₂H₆O - can not restrict that even though maybe they should.

@EconLessons 10 месяцев назад

@@bitteroldman701 It's all religion. The courts determine cases that are in question. But they will not restrict religions that teach peace. And that is almost the definition of an authentic religion.

@willterryart 10 месяцев назад

This won’t age well as BTC makes higher lows and highs every 4 years.

@EconLessons 10 месяцев назад

That is an asset. An investment asset. They will have an ETF and it is seen as an investment asset with correlations to the stock market. If you want to invest in it that is one thing, but to use it for us common folks as a medium of exchange will not work in practicality.

@miniminamanmina3715 10 месяцев назад

Makes sense if it is legally an asset , it is just another commodity . You can trade commodities for commodities or labor, I'll give you my old truck for you to finish my bathroom , or for 20 bails of hay for my goats. It has the same store of value as food, fuel sources, real-estate , if it is taxable it is not fully a currency .

@EconLessons 10 месяцев назад

And that is the whole idea of money. Money is a barter but a generally accepted barter commodity.

@bonniej0 8 месяцев назад

No there's no institution under marshall law😊

@robinmuirhead2617 6 месяцев назад

The FED have already developed the Digital Dollar CBDC

@k98killer 6 месяцев назад

FedNOW is just a real time net settlement system

@stevedallas55 6 месяцев назад

what if the powers that be disapprove of your church...

@EconLessons 6 месяцев назад

I will follow my morals not the power that be. Living a meaningful life is the most important thing and that include loyalty to once conviction.

@carlosr1176 10 месяцев назад

The thought of saving all the time and expense it takes to physically move and store money on a daily basis as well as the ability to track and control the use of digital money from a central location is simply too great for them. They’ll kill the dollar to have that much power. It’s inevitable.

@EconLessons 10 месяцев назад

You're saying the Fed will convert the dollar to all digetal?

@blackswanrising2024 10 месяцев назад

@@EconLessonsCBDC's is the game plan, look up fednow, I think they want to create money with an expiration date

@carlosr1176 10 месяцев назад

@@EconLessons yes, even if that means putting a big hurt on all the current small businesses that rely on cash transactions. That won’t hurt a single corporation. Corporations and banks are the ones who are bribing the govs to destroy themselves so they can supply the solution. Which is a system of digital money they can use to track and influence what you can buy or sell.

@evanburke5460 10 месяцев назад

You have no idea what you are talking about. Oh boy!

@EconLessons 10 месяцев назад

Be specific please.

@ihavetofishable 10 месяцев назад

😂

@acesupsilver1039 10 месяцев назад

No Worry.. if it aint Bitcorn itll be BRICS+

@EconLessons 10 месяцев назад

BRICS+ is not viable as the countries behind this idea are not free democracies.

@Neri-s2n 10 месяцев назад

literal waste of time.

@EconLessons 10 месяцев назад

Be specfic AI BOT from Russia.

@awesomeness7117 10 месяцев назад

Your right currency will never work and never has but... money works and always has, kinda like bitcoin. this current system is falling apart and i has always been a joke, 100 year old laws are not gonna work for something this new, im sick of dinosaurs trying to run this scene, everything needs to change like now

@EconLessons 10 месяцев назад

How is the current system falling apart?

@nickmoran5149 10 месяцев назад

GARTH! PARTY ON DUDE!

@EconLessons 10 месяцев назад

Pardon me, do you have any Grey Poupon? Rock on Wayne

@nickmoran5149 10 месяцев назад

@@EconLessons exqueese me? Baking powder? hahahah glad to see you have a great sense of humor!

@TiK2theToK 10 месяцев назад

Phd.😂 Degrees do not equal intelligence.

@EconLessons 10 месяцев назад

Never said they did. Also I am not a Phd yet and do not know if I can get one. I am having issues. Send me a link to where you think there is a negative correlation. But because you did mention it, research this: scholar.google.com/scholar?hl=en&as_sdt=0,10&q=iq+correlation+with+level+of+academic+achievement let me know what science says.