Originally Posted by Darkpriest667
Bingo. People dont get the FR isn't the Government. It's a completely separate entity.
OMG people that actually understand the monetary system , on OCN.
Originally Posted by Intangible
They may want to regulate it, but its going to be very difficult. BitCoin as a whole is fairly anonymous, so they would really have to attack the trading hubs to see where deposits are going. And then of course you just don't use a trading hub in the U.S. Problem solved...
Until the IRS audits you and wonders where all these deposits are coming from. You would essentially have to launder the money. Technically people should be paying taxes on the gains right now, but no one is.
So in reality, this isn't going to be a big deal for most people. Those using large funds will probably have to launder it like drug money if they want to avoid taxes.
The moment you use Dwolla or other payment processor to cash out bitcoin to USD rather than using it to buy things... it's not anonymous. Even if you use it to buy things, it's not anonymous unless it's person to person ala Craigslist but with no communication on public channels (email/skype/phone/text/fax/etc). Given that Craigslist needs a phone number it's not completely anonymous.
Keep in mind every transaction is available for everyone to see
. It's anonymity is only from the address, once you link the address to the person it's not anonymous.
Bitcoin is not anonymous
Some effort is required in order to protect your privacy with Bitcoin. All Bitcoin transactions are stored publicly and permanently on the network, which means anyone can see the balance and transactions of any Bitcoin address. However, the identity of the owner cannot be associated with their Bitcoin address until personal information is revealed by the owner during an exchange. This is why it is recommended for Bitcoin owners to use many different Bitcoin addresses; in fact, you should create a new one each time you receive money. This is especially important for public uses such as websites. You might also want to consider hiding your computer's IP address with a tool like Tor so that it cannot be logged.
A 2011 study conducted by University College Dublin researchers Fergal Reid and Martin Harrigan concluded that although anonymity has been one of Bitcoin’s main selling points, “Bitcoin is not inherently anonymous.”
“We have performed a passive analysis of anonymity in the Bitcoin system using publicly available data and tools from network analysis,” the researchers wrote in a blog post. “The results show that the actions of many users are far from anonymous. We note that several centralized services, e.g. exchanges, mixers and wallet services, have access to even more information should they wish to piece together users' activity. We also point out that an active analysis, using say marked Bitcoins and collaborating users, could reveal even more details.”
In 2012, the publicly available data on Bitcoin transactions was used by researchers Adi Shamir and Dorit Ron to identify the first ever transaction on the network, which is believed to be from an account held by Bitcoin’s mysterious creator, known only as Satoshi Nakamoto. While these transactions were covered up quite well, Ron and Shamir concluded that they are not entirely untraceable.
“Finally, we noted that the subgraph which contains these large transactions along with their neighborhood has many strange looking structures which could be an attempt to conceal the existence and relationship between these transactions, but such an attempt can be foiled by following the money trail in a sufficiently persistent way,” the report explains.
This may not come as a surprise to the most passionate members of the Bitcoin community, who look at Bitcoin as a movement to revolutionize online payments, rather than a tool to remain anonymous on the Internet. Zach Harvey, co-founder of Lamassu and co-creator of the Bitcoin ATM, says Bitcoin is actually “horrible for money laundering” because the veil of anonymity can be lifted.
If you're going to profit from something it better be "on the books" (filed as capital gains) or be completely covert
edit: keep in mind the Bitcoin foundation is trying to get it accepted as currency, so they have every incentive to comply with the Federal regulations.Edited by AlphaC - 8/8/13 at 7:42pm