It made me quickly appreciate that a persons ability to transact while not quite a human right, isn't too far from it either. There is no way the government (or financial world) should hold the power to wreck someone with no accountability. Bitcoin as I see it, is a way to shift the balance of power somewhere closer to where it belongs.

I don't hold bitcoin because I think it'll go up in value, I hold it because I don't want someone to tell me I can't pay rent because ... well they can't tell me why, because "sorry, I don't have access to that information"

It made me realize how fragile our access to bank accounts and identity actually are.

I have as such setup a portion of my wealth in crypto-assets with a dead mans switch and recovery methods covering fire, amnesia, identity loss, or death, while ensuring the majority can't be seized by a government or rubber hose attack without the consent of myself and a quorum of people I trust around the world confident I am not under duress. As long as I have the freedom to communicate and some time I can recover.

The market value of crypto-assets may not be predictable, but I prefer to be able to count on never losing access to it, and having theft protections no bank can offer.

However, I think we should be careful with drawing the conclusion that technology for circumventing our institutions' ability to regulate altogether is the natural solution, when perhaps fixing the institutions would lead to an overall better outcome. If we all moved to Bitcoin, then we would no longer have central democratic control over who is allowed to transact or not, and I don't think that leads to a better society.

Governments should stop crimes that may lead to transactions, not transactions.

The analogy would be free speech. It shouldn’t be illegal to write an article in support of terrorists even though becoming one might be.

It’s not a right we currently recognize but it’s a cogent argument.

Plus, anonymous physical cash transactions have been the status quo forever

Physical cash is de facto restricted in many places in the form of upper bounds on the amounts that one can withdraw and deposit.

I’m just shocked; never considered this could happen. Was this related to your employer, and… Well, I should just ask rather than guess :) thank you for sharing, and I’m really sorry that happened.

One of the best decisions I’ve made recently is to set up a company for myself. More specifically, I set up a non profit “for the world” (mostly as an intellectual exercise of “how hard would it be to mimic what openai originally set out to do? Turns out, it’s not hard!) which then put me in a position where I knew exactly how to set up an LLC for myself for consulting, and how to set up a bank account (use https://www.mercury.com — don’t use anything else).

The takeaway is that, if you’re in the US, you can have protection from exactly this sort of thing, for roughly zero cost — in Missouri the filing fee for an LLC was a whopping $50. That’s how much it cost me to set everything up, start to finish.

I now have a business banking account, quickbooks takes care of the taxes (admittedly $24/mo isn’t “totally free” but it’s also “pretty cheap” relatively speaking) — which means that yes, someone could freeze my LLC (hello IRS) or freeze my personal account (hello US Bank, you suck) but it’s highly unlikely both will ever be frozen simultaneously, unless both the business and my personal accounts are under scrutiny simultaneously.

The cure for that is very simple, as long as you’re rigorous: income comes in to your Mercury account; it flows out into your personal account, by paying yourself a salary. Never use the Mercury account for anything else. Congratulations, your LLC is almost impervious from problems. (My famous last words; the fact is, I have no idea what I’m talking about, and this is what I’m expecting to be true as t approaches infinity).

So yes. Bitcoin: good solution. LLC: also good solution. Wish I’d taken advantage of it sooner.

Unsure about outside of the US though, sadly. Though I’ve often toyed with the idea of making a company specializing in setting up one of those offshore bank tax havens, and offering a product like Stripe whose sole purpose is to automate that. :) Then everybody gets the loophole, rather than a rich few.

Anyway, thanks again for sharing that very unexpected story; I hope it never happens to you again!

When you have money in the Revolut account you can spend them in any country and it would be very difficult for some entity to block your funds.

Thanks for the hint about Revolut and Monese. Now I'm curious what their requirements are...

However, I will say that one business wanted to hire me full time, and I refused and asked for a higher consulting rate, which they agreed to. So it’s not impossible for your next job to end up similarly.

But then you don’t get benefits (my wife’s health insurance covers us both), sick days, and you probably have to log hours (to my surprise). So even if it’s more lucrative for me right now, there are definite reasons this path isn’t suitable for everyone.

Definitely consider it if you can swing it though. And also, you can simply invoice yourself for services rendered from your LLC, which effectively transfers money from your personal account to the LLC. I’ve had to do this to bootstrap funds into the account (since your balance starts with $0, which is useless).

The problem is tax. There are two issues. One is that an LLC is a pass-through entity. That means all profits are expected to pass through immediately to your personal account, or used immediately on business expenses. If you try to maintain a $20k balance for a year, for example, you’ll discover that this balance counts against your deductions for that tax year (effectively a negative $20k deduction). Or at least that’s my understanding so far.

Therefore, as with most things, you should ask an accountant for advice. But that’s an unsatisfying answer. My answer was going to be, therefore, you can create a C Corp instead of an LLC, and transfer some of your personal funds into that (by invoicing yourself).

The problem (argh, they never end) is that the income will be taxed for the Corp, and then taxed again when you pay from the Corp back to yourself. This is precisely the “double taxation” problem that LLCs were designed to solve!

The reason it still might make sense is because of all the incredible benefits of setting up your own company. For example, merely opening a Mercury account at all means you can redeem $5k of aws credits. $5k! I’ve done this! To my surprise, it happened!

And that’s just one of like 80 Mercury perks. There are so many, and it’s been so much fun window shopping through them all. It’s how I wound up using quickbooks for example.

Plus you’ll have an account that people can wire money to. Mercury has a nice little PDF with all your wire transfer details. It feels like driving a Tesla, whereas US Bank was like not having a car at all. (It was truly one of the worst business banking experiences imaginable. They even managed to lose an incoming $10k wire transfer. Nonsense like that simply doesn’t happen with Mercury.)

So there’s a brain dump of pretty much everything I’ve learned over two months of studying this. The takeaway is that if I had a day job, I would set up a C Corp and transfer a few grand to it by invoicing myself. (No, I wouldn’t use stripe atlas. That’s $500. You can do it yourself for $50, and it’s been surprisingly painless. Both Missouri filing and the IRS EIN were entirely online, so you don’t even have to mail anything.)

Just, uh… perhaps consider it a side hobby. This kind of nerdiness is uniquely fun to me. I imagine that it’s incredibly un-fun for most people. Treating it as a hobby helps overcome that pain, and the risk turns out to be minimal. I was surprised by that.

You don’t get taxed on having a balance; you do get taxed on the income that generated it. (Or am I missing something crazy?)

In one of these links, I am quite certain I saw words to the effect of "if you maintain a balance in the business, then the following tax year, it will count as a negative deduction for the shareholders (i.e. you), because the business type is a pass-through entity, and pass-through entities are expected to pass all of their income through to the shareholders."

The fact is, I don't know whether it was an LLC or a sole proprietorship, and I'm now second guessing what I thought I knew. Because yes, it does sound pretty ridiculous that an LLC needs to maintain a $0 balance or else it will penalize the owners of said LLC. That doesn't sound right.

And yet, words to that effect were located in one of these links. (Hunting for it now.)

EDIT: Welp. Can't find it anywhere. At least I admitted from the outset that "ask your accountant, do not trust me" is reasonable advice for anyone thinking of taking business advice from random HN comments.

I'll downshift to "I don't know whether it's a bad thing to maintain a long term balance in an LLC, but I'll be finding out the answer before the end of this tax year."

If there's no disadvantage to keeping a balance in an LLC, then I revert to "Just form an LLC for yourself; it costs $50 to do so. And you can keep as much money in it as you want, as long as you don't mind paying income tax simply for transferring money into your LLC."

It's possible I was thinking of a negative tax basis for an S corporation, if the S corporation has a long term account balance. But a tax basis is certainly not the same thing as a tax deduction, so I throw my hands up in the air and say "I'll be using a portion of my consulting income to clarify these questions with both an accountant and a lawyer; all advice should be considered suspect."

It's definitely not correct at all. Neither is issuing phantom invoices to yourself to put money into the account.

A bank account is just a vehicle to store business cash, it really has nothing directly to do with the way you should be maintaining your LLC's books. You should be recording things like that as "capital contributions" which increase your "capital account."

Similarly, profits and losses should be booked to your capital account. I would strongly recommend doing some reading on capital account bookkeeping.

I may have given the wrong impression, but to be clear I certainly wasn't recommending using Mercury as your tax accounting software! I was saying that as long as income flows into your LLC's bank account, and out into your personal account, and that you never use your business account for personal expenses, then you have nothing to worry about.

I really appreciate the reference on capital accounts; not knowing how to classify inbound transfers from my personal account was bothering me. That still raises the question of whether there is a tax, and how much the tax is. Are you saying there's no income tax when you transfer your personal funds into an LLC, since capital contributions aren't income?

After pausing and searching for the answer to my own question, https://howtostartanllc.com/form-an-llc/contributions-and-di... -- the answer is probably "no, not even slightly" and also "this is suddenly quite complicated."

https://www.legalzoom.com/articles/how-to-add-capital-contri... seems slightly less complicated:

> If you plan to contribute property, you will need to obtain a market valuation to determine the value of the property you are contributing to the LLC. Capital contributions in the form of property may also attract a number of potential tax consequences, so it's generally a good idea to consult with a tax advisor beforehand.

> You also can make a capital contribution in the form of services. As with property, you will need to obtain a market value for the value of your services. There also are tax consequences, as you will have to treat this value as if it were actual income you earned for your services, meaning you will have to pay personal income taxes on the value of these services. Because of this, services are not as popular a form of capital contribution.

So, yes, you can "invoice for services rendered" (aka services capital contribution, apparently) but it'll be taxed as income. Therefore, you want to contribute property, and the tax consequences are left as an exercise to the reader.

Looks like I'll be completing that exercise, but perhaps not at 2:30am.

Cheers for the tips.

EDIT: Two more useful resources:

- https://www.law.cornell.edu/wex/contribution

> The capital contribution increases the owner or partner's equity interest in the entity. Capital contributions are not considered business income unless given in the form of a loan.

- https://ttlc.intuit.com/community/business-taxes/discussion/...

> For a Single Member LLC (that has not made an election to be taxed as a corporation), the IRS does not recognize the LLC exists (for most purposes). Therefore, you and the LLC are the same. Therefore, there really isn't such thing a Capital Contribution for tax purposes.

Apparently "It's complicated(TM)" is still the final answer, because single member LLCs can't have Capital Contributions. Hmm.

One reason I post openly about this sort of thing is precisely because people like yourself come out and correct my misunderstandings. So again, thank you! This is certainly a reminder that I have lots more reading to do.

it should absolutely be a human right in this age.

Well you certainly can't do that with Bitcoin unless your landlord has a similarly anarchocapitalist worldview. You'd have to cash it out at an exchange and pay the individual in question. This choke point would leave you similarly locked out.

This applies to only a fringe minority of the participants in the Ponzi.

More sympathetically, even if this was a real problem that doesn't mean a Ponzi scheme is the way out. It's like saying you got burned in 2001 so decided to invest with Madoff knowing full well he was a Ponzi, but at least he wasn't a tech company.

Would it? People are willing to exchange USD for BTC. You can't control everything.

Would it? The parent commenter was in the United States, and even in cities of about 1 million people, I've seen Bitcoin ATMs at chain supermarkets. Some were even integrated into the ubiquitous CoinStar machines at the front of the store.

And what also is scary, if I had been a real target and not bycatch, I bet anyone who helped me would've also faced the same asset freeze for helping me.

You set up a scene of a refugee "storing their wealth in Bitcoin", but it begs the question: where are these refugees with substantial wealth they are looking to exfiltrate? Typical refugees are emigrating from locales where they were earning dollars per day. The use case of shielding hoarded wealth during a journey to a freer locale is a blinkered fantasy. (Of course, if this is incorrect, surely there are hundreds, at least dozens of compelling case studies by now?)

> It costs many thousands of dollars to cross borders illegally by the way, so you’re likely to exhaust your savings trying to escape whatever you’re running from.

...and worse, often end up in debt along the way. Where is the room in that common situation for the need for exfiltrating funds via BTC?

African migrants trying to cross the US southern border, on the low end. Airfare from West Africa isn't cheap. In this article[1], one migrant says the trip had cost her $5,000. It takes some assets to pull that off, and some of that is probably kept on their person for the duration of the journey. A microSD card in a condom in a....sensitive location....is not likely to be detected if/when narco-smuggler cartels shake you down for cash.

At the high end....government kleptocrats fleeing Afghanistan. Supposedly President Ashraf Ghani and his family had to leave piles of cash because they couldn't carry it all when he boarded a helicopter.[2] Too bad they didn't convert to stablecoins and store them on a wallet on a thumb drive.

[1]https://www.reuters.com/article/us-usa-immigration-africa/u-...

[2]https://www.reuters.com/world/asia-pacific/russia-says-afgha...

Again, these proposed use cases are absolute fantasies.

say i've happened to save 1000$ and i want to leave the country and i don't want the police near the airport to take my money as they're known to do. do you think it would be an absolute fantasy for me to find some way to sell my 1000$ for bitcoin and buy them again somewhere else?

It remains to be seen whether it would have been practical to move money from Syrian liras to Bitcoin. No one wants to buy hyper-inflating currency.

IMO, the not-classy thing is cryptocurrency advocates constantly trying to leverage the plight of refugees, the unbanked, and those living in locales with constrained economic freedom to underwrite the reputation of a set of technologies that are overwhelmingly used as pernicious speculative vehicles.

The average transaction fee during slow periods is about $5 and it jumps to $20 whenever there is load on the network.

And the lightning network is a poor solution to this because the LN requires a lot of capital to fund channels, something poor people explicitly don't have.

Finally, the fact that Bitcoin proponents have to point to poor authoritarian countries to find legitimate usecases is telling in and of itself. It's basically a blunt admission that the technology is mostly useless in the US.

You say that as though it makes it all but useless, despite the value it provides to people in those countries... that's very telling in itself.

But as I said there are many use cases, I just pointed out a few that I thought were most important on a global scale... because, you know, it's not all about people in wealthy developed nations.

But outside of those types of countries, and in countries like the US, the self-serving use case is a hedge against inflation. If inflation doesn't worry you, that's ok, but the recent money printing in trillions of dollars worries lots of other people. In 20 years I've seen the purchasing power of my money halved. I'm much happier to store my money in an asset that, so far, is seeing its purchasing power increase year on year.

From a technical standpoint the other use case, over the lightning network (and other layers and sidechains), is that it allows for instant micro-payments not possible with the legacy financial system. People are building products like podcast platforms which stream satoshis to content creators for every minute someone listens to their podcast. Others are building systems where every API call can be instantly billed. Or content distribution systems (think Bittorrent) where seeders can be compensated for service.

There are plenty of technical uses cases for a digital native money on the internet.

If you don't understand why it has utility I don't think there's anything more I can say to convince you. Sorry.

I guess it should be possible to trade bitcoin via the stellar network (according to their intro page[1], any currency can be), but I could well be wrong.

I got some given to me in the Keybase drop so I read up on them, but that's the limit of my knowledge in this area. I'd love to find a way to use them but articles like this talking about ponzi schemes etc tend to put me off bothering.

[1] https://www.stellar.org/learn/intro-to-stellar

The problem is that the Bitcoin fee is also payable on all domestic transfers too, which of course are free in traditional banking.

You are also going to paying exchange fees each way and those fees are likely to be quite large in authoritarian countries (as any illegal activity is generally more expensive).

When people say this, do they mean $5/$20 per bitcoin or per any transaction whatever size?

Transaction fees are per kb of data so more complex transactions pay more. The amount transfered is irrelevant.

It costs $5 to spend any amount of Bitcoin?

Is that for real? (I genuinely don't know, that just sounds so high)

If you don’t pay enough it can take hours for your coffee to be paid for.

So every time you buy a coffee with Bitcoin the transaction fee is different and sometimes will cost more than the coffee itself.

In addition to that, there's always the Lightning Network as well wherein you can transact for fractions of pennies.

You should fund a LN channel for more than one transaction because you cannot change the channel funds after creation, so you better make sure enough is in it. This makes it unsuitable for things that require more than a tiny fraction of your monthly income, e.g. rent.

LN channels also need to be constantly monitored to not get scammed, which the LN whitepaper suggests you to pay third parties for.

The LN whitepaper completely obmits the routing problem, too. It more or less says "we don't want to think about that now". A network whitepaper that doesn't think about routing, imagine that.

Yes, that makes it a closed system, but it was never realistic to have every single person on earth access bitcoin via on-chain transactions.

Gold has been used to store value for thousands of years, while Bitcoin is a new and experimental technology. It's absurd to say that you would use an experimental technology to store long-term wealth. Maybe once it's tried and proven, fine. But right now it's inefficient, volatile, has high fees, and has got the problem with mining I talked about above.

For clarity: My comments above are directly relevant to the comment above about inflation. Guarding against inflation is about holding onto your wealth for the long term. I was comparing Bitcoin to gold for that purpose -- which is entirely valid.

Nope, you're laboring under a misapprehension. Even if all new compute power stopped being manufactured miners will run their existing equipment. The mining difficulty will plateau and overtime gently decrease as equipment breaks.

Older and less efficient (at computing double SHA-256) equipment can be profitably brought online where the price of electricity to do so is available and other more valuable uses of that energy in that locale are not possible.

You can ride this all the way back down the years and generations of ASICs then GPUs to CPUs. Once humanity is out of CPUs, well, we'll have more pressing issues. We'll talk again then, or not.

Yes, mining and securing the network nevermind transmitting transactions would be difficult with ink, paper, and abacus technology alone. I'd expect gold to hold some value here despite difficulty in securing and assaying it restricting its useble value to technical specialists and institutions. Nonperishable food, water filters, consumable entertaining substances, etc. would be a better bet if you're prepping against a Mad Max level of collapse.

Sure, there’s very tiny amount of people who use Bitcoin as you described. But so there’re people who get benefits from smoking.

As the article states, check your financial privilege.

And "tiny amount of people"? What's "tiny" here? Hundreds, thousands, millions? Do you know how many people use Bitcoin in this way?

Do you?

https://blog.chainalysis.com/reports/2021-global-crypto-adop...

It's very hard to get exact numbers of users, because of how Bitcoin works, but this should give you a good sense of proportions and you could infer numbers of people based on known population sizes for each country

"We calculate the metric by estimating total cryptocurrency received by that country, and weighting the on-chain value based on PPP per capita"

Weigh how?

"we rank countries by their P2P trade volume and weight it to favor countries with lower PPP per capita and fewer internet users"

Weigh how? How do you get the numbers on internet users?

"We rank all 154 countries according to each of those three metrics, take the geometric mean of each country’s ranking in all three, and then normalize that final number on a scale of 0 to 1"

What?

It's not a methodology conductive to analysis. Is a hodge-podge of smart sounding words that create pretty graphs.

Oh, and they changed the methodology this year, but still compare results to previous years that used the old methodology. Very scientific

Problem: Who is selling Bitcoin for local currency in an area where there is a problem which is generating refugees?

Sure - you can electronically send Bitcoin to people, but how is the seller going to receive local currency from a war torn region without being local themselves? And if they are local...why are they selling their Bitcoin?

Remember - this is an area presumably in some form of collapse. How is a refugee going to transact their savings to another party who can accept them safely in the first place (rather then say, just being robbed - presumably why they're fleeing).

https://xkcd.com/538/

But they have to know someone holds it in the first place. You can walk around with a seed phrase in your head and no one would know.

They aren't going to immediately execute everyone who is crossing the border. Even in authoritarian regimes, some people may be able to leave, and borders are not completely shutdown.

And in that situation, for those people, it is useful to be able to carry money, in a way where they do not know that you have it.

I think you fail to understand the power of a true authoritarian government, particularly if they can monitor and limit your access to the outside world.

* Use a VPN, you're guilty of Treason.

* Use a currency other than the North Korean won, you're guilty of treason.

* Use an electronic device other than state sponsored devices, you're guilty of treason.

All executions will be recorded for posterity and broadcast to the people as a reminder of the power of the state.

However, as soon as they start doing that to the first few people, what's going to stop everyone else from instantly sending their bitcoin to family and friends across the border for safe keeping?

With wealth like gold, land, oil, or any other physical resources, an oppressive regime can just kill all dissenters and take control of everything. The payoff to violence is huge.

But with a digital wealth like bitcoin, which can flee the country at the speed of light, even if the owners can't go with it, the payoff to violence evaporates. The oppressive regime that spends a lot of time and energy torturing and killing people will have no spoils to show for it.

The only wealth people could offer for Bitcoin is wealth in a country with an oppressive regime. Who internationally can even take possession of that to cover their expenses?

The only plausible option would be to actually just setup a mining rig and mine the Bitcoin, since presumably for a while their might be an electricity grid their and the BTC network ascribes value to that activity...except you can't mine on commodity hardware to anymore either.

I don't trust politicians to manage their money or economy well. But I do trust code and math that enforces decentralised consensus that can't be manipulated by a handful of powerful people. Some have tried in Bitcoin's short 12 year history, and they've all failed.

You say Bitcoin is inefficient. In comparison to what? By what measures? If you compare Bitcoin to gold mining it uses less energy. https://cbeci.org/index/comparisons

If you compare it to the legacy financial system (and many other industries), it also uses less energy. https://bitcoinmagazine.com/business/bitcoin-energy-use-comp...

You say Bitcoin is volatile, but that is to be expected for a new form of money that people are still trying to figure out the value of. How long do you think it took for gold to reach a stable point of perceived value over its long history? Bitcoin is only 12 years old.

But perhaps calling it "volatile" isn't really even fair to begin with, when you compare it to top stocks and gold. https://ecoinometrics.substack.com/p/ecoinometrics-comparing...

Need for endless mining? Of course it's endless, it's a vital part of network security in an adversarial environment. As the network stores more value the energy expenditure will need to go up to secure it. This is true of any other store of value. Gold is not only incredibly expensive to mine, it's expensive to secure in large facilities.

The more Bitcoin integrates into the economy and the more wealth it secures, the more energy expenditure it should use. This is by design and a good thing. And if you compare it to other industries (linked above), it is far more efficient than current systems.

Forget "crypto". Most of them are varying degrees of scam or cargo-culting around "blockchain technology" (including Ethereum). Bitcoin is the only one that matters because it's truly neutral and decentralised. It wasn't founded by any company, there's no marketing team or CEO. It's just an open network protocol that people choose to opt-in to because they understand its value proposition to the world. In the same way that there's a separation of church and state, there needs to be a separation of money and state.

https://vijayboyapati.medium.com/the-bullish-case-for-bitcoi...

With that said, each day that goes by I am more inclined to agree with him in relation to Bitcoin and all projects that tout "fixed supply", "store of value", PoW crap.

I agree that the unbanked and people that fear persecution or censorship can benefit from crypttocurrencies. The part where I don't agree anymore is these people have BTC as their best alternative to protect their wealth or to be sovereign over their finances.

LOL, who in those countries would sell them bitcoin?

You've pulled out an argument I see all the time about the utility of bitcoin, but you can always just tell that it's made by someone who's never lived under an oppressive regime.

It's a first-worlders idea of what thirdworlders can do.

He works for the Human Rights Foundation and advocates Bitcoin for its humanitarian use cases. He has spoken to many people in these types of countries to get their take on it. See for yourself...

https://bitcoinmagazine.com/authors/alexgladstein

I mean, just ask the Chinese how easy it is to get bitcoin today. The billionaires, millionaires, and political elite can get their hands on bitcoin sure no matter where in the world they are, but not the common man (the actual oppressed in those regimes).

Unlike Alex, I don't have a conflict of interest.