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France Amends its 2019 Budget Bill to Reduce Tax On Cryptocurrencies

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France has adopted an amendment to its 2019 budget bill that reduces capital gains tax on bitcoin from 36.2 percent to 30 percent.

Very often, taxing gains from cryptocurrencies lead to confusion among investors around the globe. For its part, the governments are also trying their best to remove the uncertainty on treating the gains from virtual assets. As a result, the percentage of tax varied from the regular capital gains tax. Given this background, France has adopted an amendment to its 2019 budget bill that reduces capital gains tax on bitcoin from 36.2 percent to 30 percent. The move could be interpreted in several ways.

 

Non-Real Estate Assets

For instance, the reduction in tax rate could be taken as a move to encourage bitcoin and other digital coins. However, the government is transparent in its thinking, i.e., to bring the transactions in respect of cryptocurrencies on par with any other non-real estate assets. Incidentally, this segment has attracted a flat tax rate of 30 percent only. The finance commission has adopted the budget amendment in the Parliament’s lower house. However, it is not enough to become a full-fledged law.

For the final version of the bill, it must be approved by a more full Parliament and only then it will become a law. If things go as planned, then the new tax rate will come into effect in January 2019. In any case, the move assumed significance since, at one point in time, taxes in France has hit 45 percent for gains from cryptocurrencies. However, this has been reduced by the Council of State by bringing it on par with the capital gains of movable property.

 

Exception of Earnings

There was a considerable reduction in tax rate. At the same time, earnings from the mining of digital currencies were exempted since it is taxed as non-commercial profits. Also, such income is treated as income from professional activity, which comes under industrial and commercial benefits. The country’s president, Emmanuel Macron, is doing all that he can to transform the country into a business haven and that included virtual currencies.

For instance, he has unveiled the “Action Plan for Business Growth and Transformation” (PACTE) early this year with the objective of making it easy for enterprises to operate in the country. This included legal framework for fundraising exercises with the help of token sales, which is emerging rapidly. This was followed by guidelines for initial coin offerings (ICOs) in September. At that time, France finance minister, Bruno Le Maire, indicated that the regulations would allow Authority des Marches Financiers (AMF) to approve the ICOS.

 

Specific Guarantees

The financial regulator was also empowered to permit enterprises to float ICOs in the country. However, it has placed restrictions, i.e., only if “those projects provide specific guarantees for investors.” This meant that those raising money through tokens would have to provide complete disclosure to the AMF. The government was keen that investors should be provided with whatever disclosures available so that they make informed decisions.

Before this, the regulator has raised concern on the absence of regulation in respect of digital token sales. The AMF felt that there existed an inherent risk thus increasing the possibility of incurring losses by investors. Similarly, the regulator was concerned about using the virtual asset for illegal purposes like terror funding and money laundering.

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Satoshi Nakamoto’s Dream: The History of Bitcoin: Part 1

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In order to implement the model of a distributed time server marking on a peer-to-peer network, we will have to use a system of proof of work done.

A full-fledged version of virtual money based on a peer-to-peer network communication model would allow online payments to be sent directly from one entity to another without the need for transactions to flow through financial institutions and other intermediaries. Digital signatures give us a partial solution to the problem, but the main disadvantage of this type of solution is the required presence of a trusted, superior entity to prevent double-spending. Satoshi Nakamoto proposed a solution to the problem of double spending in the form of the use of peer-to-peer networks. The network marks transactions with time stamps, hashing them into a continuous chain of proof-of-work, creating a registry that cannot be changed without modifying the evidence of the work already done. The longest string not only serves as proof of the occurrence of a sequence of events but also as proof that it comes from the largest pool of computing power. As long as most computing power is controlled by nodes that do not work together to attack the network, they will form the longest chain and anticipate a potential attack. The network itself requires a minimum structure. Messages are disseminated with the utmost care, and the nodes themselves can leave and rejoin the network at any time, accepting the longest chain of evidence of the work done as confirmation of what happened in the network during their absence.

 

The Introduction

E-commerce has to rely almost exclusively on financial institutions as the “trusted” processors of electronic payments. While the system runs smoothly enough for most transactions, it still suffers from the drawbacks of a trust-based model. Completely irreversible transactions are not possible in such a model because of the impossibility of avoiding litigation and the participation of financial institutions in related mediation. Mediation costs increase transaction costs, reducing the minimum practical transaction size, thus eliminating the possibility of making small transactions on a daily basis. There is also a much higher cost of not being able to make irreversible transactions for services, including those of an irreversible nature.

With the possibility of repayable transactions, the need for trust increases. Traders need to be cautious in their relationship with their customers, usually requiring more information from them than necessary. A certain percentage of fraud is accepted as unavoidable. These costs and uncertainties related to payment can be avoided for direct transactions using physical currency, but there are no mechanisms for making payments through communication channels without the presence of a trusted third party.

What is needed is an electronic payment system based on evidence of cryptography instead of trust, enabling any two entities willing to transact directly between themselves without the need for an additional trusted entity to participate. Transactions whose withdrawal is calculably impractical will protect sellers from fraud and the introduction of routine deposit mechanisms would easily protect buyers.

In this article, I propose to solve the problem of double spending by implementing a model of distributed time marking servers, to generate a calculation proof of chronological order of completed transactions. Such a system is safe as long as reliable nodes together control more computing power than any cooperating group of attacking nodes.

 

Transactions

We define electronic currency as a chain of digital signatures. Each holder may transfer ownership of the coin by digitally signing the hash of the previous transaction and the public key of the next owner, adding this value at the end of the coin record. The payee can verify these signatures to check the chain of possession.

The problem is, of course, that the recipient of the payment does not have the possibility of checking whether one of the holders has not redeemed the coin twice. A common solution is the introduction of a central trusted authority or a mint who checks each transaction to announce double spending. After each transaction, the coin must be returned to the Mint for it to issue new coins and only coins obtained directly from the Mint are perceived as trusted and certainly not issued more than once. The problem with this type of solution is that in such a case the whole monetary system is based on the company that runs the mint, through which each transaction is forced to go, just like through a bank. This is especially crucial in the gambling industry (and many more grey-market industries) with hundreds of sites like bitcasino taking advantage of the blockchain’s efficiency and anonymity it provides to bypass national gambling and betting laws. Too bad that when it comes to regulations, all crypto users, not only gamblers will be targeted.  

We need a solution for the payee so that they can be sure that the previous owners have not signed any previous transactions. For our needs, we assume that the earliest transaction counts, so we no longer care about the subsequent attempts to double release. The only way to confirm the absence of a transaction is to view all transactions. In a model based on the existence of the Mint, it was familiar with all the transactions and decided which one arrives first. If we want to do this without a trusted third party, the transactions must be made public. We also need a system for transaction participants, in which we will agree on a single history taking into account the order in which transactions were received. The payee needs proof that at the time of execution of each transaction, most nodes agreed that it was the first that they received.

 

Temporary Marking Server

The solution we propose assumes the existence of a temporary marking server. The tagging server retrieves hashes of list items to be tagged with timestamps and broadcasts the hash as it is in a newspaper or in Usenet [2-5] post. A time stamp proves that the data existed at a certain time in order to be able to access the hash. Each timestamp places the previous timestamp in its hash, thus creating a string in which each additional timestamp amplifies the ones before it.

 

Proof Of The Work Carried Out

In order to implement the model of a distributed time server marking on a peer-to-peer network, we will have to use a system of proof of work done, similar to the Hashcash system proposed by Adam Back, and not the model of a newspaper or posts of the Usenet forum. The proof of the work carried out assumes the search for a value beginning with a specified number of zero bits, as is the case with SHA-256. The average workload required increases exponentially with the number of zero bits and can be verified by performing a single hash.

For the purposes of our network based on the time model of the coding server, we use the proof of work system in which we increase the value of the one-time number coding the encrypted message (the so-called nonce), until the moment of finding a value that gives the required zero bits to the hash block belonging to it. Once the computing power of the processors has been extended to meet the requirements of proof of work done, the block can no longer be changed without doing the same job again. Because they attach another block to the string after a specific block, trying to change a specific block would involve changing all blocks following it.

The proof of work model also solves the problem of identifying the majority in the majority decision-making model. If the majority were based on the principle – one IP address = one voice – it could easily be challenged by anyone capable of assigning multiple IP numbers. Proof of your work is, in fact, a principle – one processor = one voice. The majority decision is represented by the longest chain that has invested the greatest “effort” in the work. If most computing power is controlled by “fair” nodes, the “fair” node will grow fastest, leaving potential competing nodes behind. In order to modify one of the previous blocks, the attacker would have to rework the proof of the work done by the block and all subsequent blocks, then catch up and overtake the work of the “honest” knots. In the further part of the paper, we will show that the probability of catching up with the work of “honest” knots by a potential, slower attacker decreases exponentially with the addition of new blocks.

In order to compensate for the continuous increase in available computing power of computer hardware and the changing interest in the operation of nodes from the perspective of time, the level of difficulty of the proof of work performed is determined by the moving average determining the number of broken blocks per hour. If these are broken too quickly, the difficulty level increases.

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Bitcoin Maximalists: Leading towards a hazardous path.

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bitcoin maximalists believe that bitcoin is the only coin worth spending time, effort and worth investing in and everything else is a shitcoin.

Talking about bitcoin maximalism, we really to an extent talking about tribalism. We have to question as a community that is this the kind of stuff and ideologies that we want for the money of the future? Basically, Bitcoin maximalists believe that bitcoin is the best cryptocurrency in the world. The difference really comes in versus if you think that bitcoin is the best cryptocurrency in the world and the rest of the crypto economy can add a lot of value and innovation and there doesn’t have to be one coin to rule them all. Then there are the bitcoin maximalists who believe that we have to have one coin to rule them all and bitcoin will be the only coin worth spending time and effort on and its the only one worth investing in and everything else is a shitcoin.

The bitcoin maximalists will argue that because of Metcalfe’s law essentially the more people who use the network, the more valuable it is. They believe that altcoins are just taking away the value from the bitcoin network not that they are adding anything to the wider crypto economy because there is no crypto economy, its just about bitcoin. Now as the process of making cryptocurrencies mainstream is a slow one, they argue that companies would always choose the older and more stable networks rather than the new ones.

 

The Contradiction to bitcoin maximalists:

There are a lot of companies who are willing to be a bit experimental and testing out pilots or they see use cases on other blockchains than bitcoin doesn’t offer yet. Just because its the older and more stable one doesn’t necessarily mean that all companies are going to choose that for their use cases and its not a very good argument when it comes to defending bitcoin. A lot of companies are choosing to work with Ethereum, EOS and others so its not all being monopolized by bitcoin. Even if the bitcoin maximalists would like it all be monopolized by bitcoin, the reality is that the market is simple choosing something different. That’s because the reality is that the crypto markets demand more than what bitcoin can provide. Consumers demand more from cryptocurrency and the related technologies which is more than bitcoin was ever designed to provide and to ignore all of that is unnecessarily myopic.

Charlie Lee recently came out on twitter saying that some self proclaimed bitcoin maximalists are actually bitcoin extremists. They think that all other coins are scams and will go to zero. Saying that there is room for altcoins to exist and even do well. That’s a view that a lot of people in the cryptocurrency community get behind. There is plenty of room for innovation for different communities to happen, for different ideas and use cases that bitcoin simple cannot provide. Arguing the opposite is basically an extremist position and unfortunately we do have a certain group of voices within the cryptocurrency community who are very much bitcoin extremists.

One of the big things we really need to really face up-to here is that the bitcoin maximalists idea has largely been hijacked by bitcoin extremists. People representing the community do have ideologies but to try and make this association that bitcoin is this; just doesn’t work. Its not useful in terms of trying to drive mass adoption.

We need to come together and believe in the idea of decentralized finance and what that can offer. Putting ideologies on top of that is recreating the worst of our society in a lot of ways. Bitcoin has got some really big drawbacks that have been really getting a lot of attention. Proof of Work has some real issues, Proof of Stake is being explored by a lot of different cryptocurrency projects. As bitcoin continues to grow the free market will either adapt to become very energy efficient or it is going to continue to be a thorn in the side of bitcoin.

Then we have the scaling issues and its good to see the lightning network coming around but the reality is that right now bitcoin doesn’t scale very well. We can also look at lack of rich functionality in terms of things like privacy features which we see being developed in other cryptocurrencies.

A lot of good things in the Bitcoin Network are going on too. Bitcoin is sound money, it remains permission less, it remains censorship resistant, companies are putting satellites in space to beam the bitcoin blockchain around the globe, lighting is getting better all the time, atomic swaps continue to gain relevance and we see decentralized exchanges moving forward but this whole one coin to rule them all negative is not very compelling when it comes down to it.

The whole idea behind the bitcoin protocol was that its driven by verifiable code, not an ideology. We are trying to decentralize the systems of power. Although bitcoin is awesome and will remain and continue to grow massively in future but a lot of other crypto technology will also be very important and every project in the cryptocurrency space is contributing in some way. The test of time will of course be the real test for bitcoin.

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Kevin Connolly’s Cryptos TV show: The Good and the Bad

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The Cryptos TV show is going to be great exposure for cryptocurrencies overall. It is going to present a lot of topics and explain things to people.

Kevin Connolly, we know from the comedy-drama television series Entourage where he played the character Eric Murphy is making a new TV series about cryptocurrency called ‘Cryptos’. He hopes that the show can open up a notoriously complicated subject for the public. Kevin Connolly said that the thing that scares people about cryptocurrency is the lack of understanding. The trailer of the Cryptos TV show looks quite fascinating.

 

Cryptos TV Show: The Good and the Bad

The Cryptos TV show is going to be great exposure for cryptocurrencies overall. It is going to present a lot of topics and explain things to people and millions of people are probably going to learn about cryptocurrency because of this TV show. The sponsorship opportunities for the cryptocurrency companies on the show are going to be ridiculous.

It could end up going bad potentially. It could really show the wrong side of the industry such as starting an ICO, making millions of dollars, getting lambos, going to parties spending investors money etc.

The trailer doesn’t really give us too much idea of what the show is really going to be like but if it is done well, it could show the power, use cases and investment potential of cryptocurrencies. It could send a very strong message to the viewers about why cryptocurrencies are awesome.

 

What’s different in Cryptos TV Show?

This is not the first time we are seeing cryptocurrency related media coming out. HBO’s Silicon Valley for example frequently talks about cryptocurrencies, bitcoin, and ICOs but a lot of that stuff is usually happening in a very joke kind of context. So perhaps the Cryptos TV show from Kevin Connoly could focus it more on the power of the technology versus just some fun jokes once in a while. We have already seen a lot of documentaries about bitcoin but the people who really don’t know anything about bitcoin, probably aren’t going to get out and watch those documentaries but they might watch the Cryptos TV show especially when it is Entourage level entertaining. We have also seen quite a few films coming out particularly based on bitcoin, none of them have been really big yet but we do have a movie which is in post-production right now called ‘Crypto’ which is a crime drama thriller but we have seen how grossly cryptocurrency can be misrepresented.

It seems that the intention of the guys behind Cryptos TV show is to present cryptocurrency in an honest way and there is a lot of dirty stuff going on in cryptocurrency space and they should talk about that too but hopefully they’ll also talk about the good stuff as we always see different publications coming out all the time making smear jobs on bitcoin and cryptocurrencies for a million different reasons. To have an entire multi-season TV series with some kind of good message out there about what crypto is could be good for the entire cryptocurrency community.

The team behind Cryptos TV show claims to be in a process of producing the first 10 episodes with a hope of being picked up by Netflix or Amazon. This could be a big driver in making crypto go mainstream.

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