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Showing posts from December, 2017

Why prices on different Bitcoin exchanges are not the same?

There is a big difference because arbitrage between exchanges is slow and dangerous due to the legacy financial system's defects. It's a high risk of regulatory problems because banks see this as money laundering. They are obligated by law to play the security theater and will cause problems to arbitrage traders moving fiat funds between exchanges. If you know how to move funds between exchanges fast and with less fees – there is a profitable (but risky) business opportunity. If our current financial system allowed for immediate transfers between participants, arbitrage would eliminate these price spreads on different exchanges.

US dollars are backed by...

US dollars are backed by the fact that the government will put you in jail if you don't buy US dollars to pay your taxes. You can use only US dollars to pay taxes in US and other countries. This way the government is supporting the price of US dollar.

Bitcoin is drawing the interest of tax authorities in many countries

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One of the things that many people don't realize is that Bitcoin is drawing the interest of tax authorities in many, many different countries all over the world. What is quite clear is that Bitcoin trading is jumping right to the front of the queue of priority tax investigations. This is easy to note by having a look at the official web pages of assorted European tax authorities, and also at the US IRS. What this article is hinting at is that tax authority cooperation across many different national jurisdictions is converging. Bitcoin proponents really aren't paying enough attention to what happens when you actually try to monetize your gains. Forget the Blockchain. Look at the final result (house, fancy new car, fancy boat, hefty bank account) instead. Because that is what the authorities will do.

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