Are all bitcoins created equal?
Currencies work as if the tokens of money in circulation are interchangeable with one another. This fungibility means a dollar is always worth another dollar. Bitcoin is no different.
However, money can also act like a unique asset. A coin’s rarity, age, or its easiness to spend can gain or lose it additional value.
How should bitcoin be treated under capital gains tax? If you sell a bitcoin that you've had less than a year that has decreased in value, is that judged differently than a bitcoin you've owned since 2012 that has increased in value?
In this video, I explain how if tax laws assess bitcoin as fungible it could mean paying higher taxes than if it’s a commodity.
Without fungibility, the medium of exchange and unit of account properties of a currency are seriously damaged. This is why privacy tech must be added to bitcoin before it becomes too much of a threat to sovereign national fiat.
A perfect storm is brewing worldwide, one that employs yellow vests as the resurrection of the occupy movement along with crypto as a potential exit from the parasitic trap statists created.
The danger here comes from lack of decentralization. Many of the alts are not nearly decentralized enough and if bitcoin dominance drops below 10% we may be in for a state controlled crypto, either after the fact of its rise to dominance through takeover of the centralized entity, or by legislation making non state sanction crypto illegal.
Of course, enforcement would be problematic, but may be successful within certain geographic regions. I believe this scenario will not last forever (I call this the digital panopticon period in my blog posts). Eventually I believe that national boundaries will erode and national monopolies based upon geographic jurisdiction will become a thing of the past. Nation states will eventually compete for its "citizens" and eventually will drop the idea of a "nation" and replace it with a DApp.
I agree that privacy is a must