Op-ed by Will Hammer
Ever since I first heard about cryptocurrencies, I have been an enthusiast. I loved the possibilities that this digital non-fiat currency had and wanted to be a part of what I viewed, and still view, as the future of currency. I got a desktop wallet, then a mobile wallet; started to buy cryptocurrencies; read r/bitcoin and other Bitcoin media; and finally even bought two block erupter cubes to mine my own Bitcoin. Even though I had hesitated in getting Bitcoin when it was at $15-20, I was still happy with buying it at the current levels of $4-700 as theoretically it can go to the moon. I didn’t make a profit with my own mining rigs, as the difficulty increased drastically essentially right after I bought them, but I still had a lot of fun with it and felt I had helped the blockchain and gotten more involved in something in which I truly believed.
For those who may not know what bitcoin is, bitcoin is the first decentralized digital currency. This means that there is no central bank or authority regulating it. It is encrypted and limited to 21 million bitcoins, but can be divided into smaller denominations, and it will take until 2140 to “mine” them all. So, it cannot be counterfeited and there is a finite number. It is open source and completely transparent, with the blockchain keeping public record of every transaction. But, it allows for anonymity because you have an encrypted address. You can see the transactions, but there is no identifying information on the address to link to someone. Bitcoin is not just a currency but also it’s own payment system. Each transaction takes only 10 minutes to confirm, much faster than credit cards and checks. It is the future of both currency and payments.
Of course, the more I got involved with Bitcoin, the more I realized there were many untapped possibilities. Not only is it the future of currency, but also the future of payment systems and even contracts. And over the last year or two, we have seen more advancements in Bitcoin implementation and technology. It has been a beautiful experience being a part of and watching this organic technology blossom and become viable.
I see cryptocurrency as being the replacement and end of our current monetary system. I do not like the idea of fiat currency and non-transparent quasi government organizations controlling our currency. This is what initially drew me to Bitcoin, the possibility of a non-fiat and transparent currency. There would be no need to audit the Fed, you could just check the blockchain and see all transactions and know that there was no money being printed, or rather zeros added to accounts. Whereas the government may like the idea of their currency not being able to be counterfeited with this technology, they will not like the idea of a non-limitless bank account.
With this digital currency becoming viable and more popular by the day, it did not go unnoticed by the Federal government. Whatever your political, or non-political, leanings may be, everyone knows the government loves to get their hands on any and all emerging markets. As it has been said, you may not have an interest in government but the government has an interest in you. And even though Bitcoin and the blockchain itself cannot be regulated, the government will try its hardest to do so.
This is apparent from the short time that Bitcoin has been in the purview of the Federal government. The IRS has deemed Bitcoin as property. This means that every bitcoin transaction would be subject to capital gains tax. Not only transactions, but mining activity is subject to taxation as well. The bitcoins you mine are taxable as income in accordance to the market value of Bitcoin on the given day that you mined said bitcoin. I am not really sure how they plan to enforce that, but they will try (and fail). And of course, the FEC finally ruled earlier this year that you can accept Bitcoin donations in a political campaign. But, you must convert to USD before you transfer to an official campaign account and you are limited to receiving $100 from each person, just like cash donations. I, of course, jumped on this announcement and have been accepting Bitcoin essentially since I started my campaign in May.
The only real regulation that the government can put onto the Bitcoin community is on companies that act as exchanges and provide other services involving Bitcoin. So, we must protect this emerging market. If we do not, the innovation boom we have seen over the last year will not continue, and the implementation of Bitcoin and other cryptocurrencies into our everyday lives will plateau, and possibly stop.
We need to elect people that understand and will protect the flourishing Bitcoin market and keep it out of the reach of the Federal government’s omnipotent tentacles and omniscient bureaucrats. Bitcoin itself will survive no matter what the government may try. If elected, I will champion for Bitcoin and other cryptocurrencies, fighting to keep it out of the regulatory reach of the Federal government. The internet and cryptocurrencies are some of the last frontiers of freedom, and we need to ensure that they stay those bright beacons of our remaining freedom.
Will Hammer is the Libertarian Party nominee in the Sixth Congressional District race in 2014.
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