I've been following this discussion in Washington and on Hacker News. I'm moderately anti-crypto--I don't buy the pitch but am open to being wrong and believe folks should be free to do what they want with it.<p>I've also been struck by the proliferation of bank-like services without bank-like obligations. This stretches from fractional-reserve and maturity-transforming services like Tether to exchanges/dealers like Binance and ersatz money transmitters like BitPay.<p>We need AML (edit: anti-money laundering) and tax reporting at those nexuses. If the answer is there should be no AML, KYC (edit: know-your-customer rules) and/or reporting by cryptocurrency companies, we have no common ground on this argument. To date, this is what I have most-commonly heard. If that's what the Senate is hearing, it's unsurprising they consider the debate closed. If the argument is a reasonable tweak to who has to report, or what or the form in which it must be reported, policy makers are listening. (Wyden's amendment is a result of reasonable concerns expressed by miners.)
Everything in the article leads me to believe this only threatens the “cryptocurrency” industry, but I don’t have the actual text to the amendment. Is anything threatening “crypto” itself?
I don't really follow any cryptocurrency news but wasn't one of the main appeals early on that it would be independent from any governments? Specifically that it could be a currency not subject to the oversight and sanctions of the US treasury? I guess "cryptocurrency" is different from "cryptocurrency industry", but it still seems like the ecosystem as a whole should be more resilient to actions from the US government. Otherwise what's the point?
WINNERS: <i>Large corporations and financial institutions.</i> They can afford the now-required overhead for all kinds of services, including transaction processing with fees and rewards, i.e., mining, and make a nice profit at high volumes.<p>LOSERS: <i>Smaller service providers.</i> They cannot afford the now-required overhead because they don't have sufficient economies of scale.
Oh my goodness. Here is Portman himself in his own words:<p><i>“The Treasury Department, the nonpartisan Congressional Joint Committee on Taxation and others believe that the current language is clear and that the reporting requirements only covers brokers, but my view is that we should work to clarify this given the potential for confusion on an extremely important issue. In particular, we want to be sure miners and stakers and others now or in the future who play a key role by validating transactions, or sellers of hardware or software for digital wallets, or node operators, or others who are not brokers are clearly exempted.”</i><p>Video: <a href="https://youtu.be/p0auPbbDQnY" rel="nofollow">https://youtu.be/p0auPbbDQnY</a><p>AND YET the Warner-Portman-Sinema (note the Portman in there!) amendment <i>doesn’t</i> specifically exclude stakers or validators who may now or in the future secure the networks, and certainly not the catch-all “others who are not brokers”? Only exempts proof-of-work miners? Yet he claims it was already “clearly exempted” in the proposed bill at the time of his speech and the amendment was supposed to clarify that??<p>I wonder if the Senator’s own words on the floor, and assurances that the Treasury and others hold the same view, could be used in court cases to clarify the meaning of “broker” later on, in favor of the defendants (Ethereum proof of stake miners, say) when they will invariably be served papers and prosecuted for not reporting.<p>Seriously, how can you say one thing and do another so blatantly? This is worse than “if you like your plan you can keep it”.<p>Will the Treasury and others likewise say one thing in private (as he reports) and quickly flip when it comes to making examples out of non-reporting POS miners?
Many people start coding at a young age. Imagine your kid having to report their dapp to the IRS. It's not about the money. It's about the control.<p>The situation is probably worse for adults. Why go through the hassle of developing dapps when it means dealing with the IRS and potentially jail, etc.? Personally I've abandoned working on completely harmless dapps because of threats from the state. It's stifling for independent development.<p>On the other hand, when people compare this to China banning mining, I think the USA is far friendlier to crypto than China, because, as the ascending fiat superpower, China has much more to lose. As the dollar continues to devalue, the USA would most likely prefer a future based on Ethereum rather than the Yuan.
Just to be clear, "crypto" is short for cryptocurrencies?<p>This legislation does or does not impact other cryptography use cases?<p>My concern comes from government's long standing opposition to personal cryptography. eg Clipper chip in phones.
As someone who has been sorely disappointed by much of how crypto has developed since it's early days and is somewhat a crypto pessimist, I'm extremely disturbed that something which could outright kill US Crypto is being rammed into a infrastructure spending bill. If you want to ban crypto, fine, that's a position which could be taken, debated, and discussed. But it should be done separately and given sufficient time for public feedback. Stuffing it into this bill is asinine to the nth degree.
I guess I don’t understand what the amendment actually does. If you’re a crypto miner, you already have to report your own income from that activity to the government; failure to do so is already a crime, namely tax evasion. And if you’re not a custodian, by definition your own activity is the only activity that you have data on, right? What new reporting does this actually mandate?
What are the reporting requirements? Will they lead to taxation? Overhead computing resource per block/transaction validated?<p>Is this reporting only, or will it result in additional taxes?<p>This seems light on details, and I really don't know what opinion to have on this without understanding what the requirements are. Nothing I've read succinctly explains this.
Blegh. I think that cryptocurrency was a well-intentioned experiment trying to solve real problems, but that it has broadly failed, and that some of the knock-on effects of speculation on top of the cryptocurrency ecosystem are just unambiguously harmful at this point.<p>It's not just the environmental concerns from PoW; I have concerns about privacy, about how coins have derailed (in my mind) more legitimate efforts to improve modern financial systems. And I have cultural concerns about how this plays into some of the worst instincts of modern society towards speculation and artificial scarcity purely for their own sake, disconnected from any problems or utility. NFTs are the type of technology that honestly shouldn't have been developed, they're pointless and exploitative.<p>But as much as I do kind of want cryptocurrency to crash and die, I really don't want to do it this way. I've seen some people argue that this <i>wouldn't</i> apply to software developers, but I don't like that the question is under debate at all. The idea that it theoretically might is terrifying, if it's not intended to apply to developers why wouldn't we clarify that in the bill to assuage those fears? And even where miners are concerned: I would like to see mining (particularly PoW mining) eventually become unprofitable, but pushing those people into the category of brokers seems really problematic and short-sighted.<p>My worry is both that this will open the door to a lot more unnecessary data collection, and that further down the road it might hinder efforts to make better alternatives to the current cryptocurrency industry. The financial concerns are real, but the really troubling part to me is the reporting requirement. Software developers shouldn't be collecting this kind of information, neither should miners.<p>I also haven't seen a lot of consensus about what technologies the label "digital asset" could apply to in the future, and that worries me a lot as well. I am not a legal expert, I don't feel qualified at all to speculate on how this stuff is determined. A smaller group of people saying that "obviously X made-up digital token or point system or game item wouldn't count" -- that's not super-reassuring to me because I'm not smart enough to evaluate the accuracy of their claims. I want to see more qualified legal experts weigh in. I don't want to see games suddenly collecting a lot of personal information just because technically someone could sell a digital item to another player for money.<p>I like Wyden's amendment: it still goes after brokers, but it makes it clear who a broker is (and importantly, isn't). And I thought that there was pretty decent bipartisan support for Wyden's amendment. It's really frustrating that support seemed to only be good enough to get 29 votes.
Strangely, crypto has gone up in spite of this news. This seems worse then China banning mining, which caused a pretty significant drop earlier this year.<p>Why would this not effect the market in a similar fashion. As far as I understand it, this effectively bans crypto mining in the US. Am I missing something?
If you think all cryptocurrencies are scams or think blockchains do nothing useful, please skip this comment.<p>If you think things like decentralized finance, storage and identity have the potential to improve our lives and offer some of the only genuine alternatives to an increasingly privacy-hostile status quo, please look into the shambolic legislative process that threatens the entire blockchain industry in the United States. This is the time to act and ensure that cryptocurrency provisions are debated meaningfully in Congress before any relevant legislation is passed. What the Senate is doing right now reeks of both outright incompetence and malice. There are many, many companies and builders active on HN who are about to have their existence challenged.