Incoming links: Tax
The key difficulties of cryptocurrencies are:
- how do transaction fees/guarantees/times compare to centralized systems such as credit cards:Obviously, decentralized currencies cannot be cheaper to maintain than centralized ones, since with decentralization you still have to send network messages at all times, and instead of one party carrying out computations, multiple parties have to carry out computations.
- bitcoin.stackexchange.com/questions/1261/is-it-possible-to-send-bitcoins-without-paying-a-fee "The Blockchain Scalability Problem & the Race for Visa-Like Transaction Speed" (2019)
The battle for a scalable solution is the blockchain's moon race. Bitcoin processes 4.6 transactions per second. Visa does around 1,700 transactions per second on average (based on a calculation derived from the official claim of over 150 million transactions per day).
- towardsdatascience.com/the-blockchain-scalability-problem-the-race-for-visa-like-transaction-speed-5cce48f9d44
Crypto could however be close enough in price to centralized systems that it becomes viable, this can be considered. - how can governments tax cryptocurrency. Notably, because:See also globalization reduces the power of governments.
- taxation has to be progressive, e.g. we have to tax the rich more than the poor, and anonymity in transactions would weaken that
- it would be even easier to move money into fiscal paradises, and then just say, oops, lost my passwords, those coins are actually gone
Until those problems are solved, the only real applications of cryptocurrency will by illegal activities, notably buying drugs, paying for ransomware. But also paying for anti-censorship services from inside dictatorships. Illegal activity can be good when governments are bad, and arguably selling drugs should be legal.
For this reason Ciro Santilli believes that privacy coins like Monero are currently the most useful cryptocurrencies. Also, people concerned with their privacy are likely to more naturally make fewer larger payments to reduce exposure rather than a bunch of small separate ones, and therefore transaction fees matter less, and can be seen as a reasonable privacy tax. Also drugs are expensive, just have a look at any uncensored Onion service search engine, so individual transactions tend to be large.
Hedgint against inflation due to money creation in fiat currencies is a another valid argument for cryptocurrencies. Money printing is a bad form of tax. But why not just instead invest in bonds or stocks, which actually have a specific intrinsic value and should therefore increase your capital and beat inflation? Even if crypto did take over, its value would eventually become constant, and just holding it would lose out to stocks and bonds. And pre-crypto, salaries should adjust relatively quickly to new inflation levels as they come, though there is always some delay. Also, without anonymity, governments will sooner or later find a way to regulate and pervert it. If you want to do things without anonymity, then what you really have to fight for is to change government itself, perhaps with a DAO-like approach, or pushing for a more direct democracy.
If crypto really takes off, 99.99% of people will only ever use it through some cryptocurrency exchange (unless scalability problems are solved, and they replace fiat currencies entirely), so the experience will be very similar to PayPal, and without "true" decentralization.
For those reasons, Ciro Santilli instead believes that governments should issue electronic money, and maintain an open API that all can access instead. The centralized service will always be cheaper for society to maintain than any distributed service, and it will still allow for proper taxation.
Ciro believes that it is easy for people to be seduced by the idealistic promise that "cryptocurrency will make the world more fair and equal by giving everyone equal opportunities, away from the corruption of Governments". Such optimism that new technologies will solve certain key social problems without the need for constant government intervention and management is not new, as shown e.g. at HyperNormalisation by Adam Curtis (2016) when he talks about the cyberspace (when the Internet was just beginning): youtu.be/fh2cDKyFdyU?t=2375. Technologies can make our lives better. But in general, some of them also have to be managed.
In any case, cryptocurrencies are bullshit, the true currency of the future is going to be Magic: The Gathering cards. And Cirocoin.
One closely related thing that Ciro Santilli does think could be interesting exploring right now however, notably when having Monero-like anonymity in mind, would be anonymous electronic voting, which is a pre-requisite to make direct democracy convenient so people can vote more often.
TODO evaluate the possible application of cryptocurrency for international transfers:Of course, the ideal solution would be for governments to just allow for people from other countries to create accounts in their country, and use the centralized API just like citizens. Having an account of some sort is of course fundamental to avoid money laundering/tax evasion, be it on the API, or when you are going to cash out the crypto into fiat. So then the question becomes: suppose that governments are shit and never make such APIs, are international transfers just because traditional banks are inefficient/greedy? Or is it because of the inevitable cost of auditing transfers? E.g. how does TransferWise compare to Bitcoin these days? And if cryptocurrency is more desirable, why wouldn't TransferWise just use it as their backend, and reach very similar fees?
Ciro Santilli supports full legalization of all drugs, because he feels that it would be better overall for the world to have cheaper drugs and more drug addicts, but way, way less organized crime.
These should be extremely controlled of course, with extremely high taxes that puts their price just below the current illegal market, and a complete ban on any positive advertising.
Ciro believes that maybe the government could even go as far as giving free drugs to drug addicts so they don't have to rob to get a fix.
This is notably considering that drug-led organized crime completely dominates and corrupts the politics of many production and trafficking zones, which are already generally poor fucked up places to start with:Ciro's experiences in Brazil such as mentioned at São Remo, the favela next to USP, although much less extreme than the above, also come to mind.
Drug traffic corrupts everything. It prevents development of honest people. It is a cancer, which we have failed time and time a gain to cure. The only cure is to accept the other less insidious of addiction.
Bibliography:
- How to Fix a Drug Scandal (2020) gives a good sense of the relentlessness of the drug war, and how it affects people who are already poor the most
A useless piece of paper (or digital version of it) that you can pay taxes with :)
As opposed to:
- 2020 cryptocurrencies, while governments still don't accept them for taxes, as well as other assets that are also not accepted for taxes (i.e. most assets)
- physical currencies that have intrinsic material value, e.g. gold coins
While Ciro Santilli is a big fan of having "one global country" (and language), which is somewhat approximated by globalization, he has come to believe that there is one serious downside to globalization as it stands in 2020: it allows companies to pressure governments to reduce taxes, and thus reduces the power of government, which in turn increases social inequality. This idea is very well highlighted in Can't get you out of my head by Adam Curtis (2021).
The only solution seems to be for governments to get together, and make deals to have fair taxation across each other. Which might never happen.
Obviously coupled with measures to prevent capital flight. This would be a required step to achieve Ciro Santilli's dream of unconditional basic income.
Why don't the poor vote in mass for it is incomprehensible considering e.g. the wealth inequality in the United States as of 2020!
Perhaps the election of Donald Trump in 2016 woke up the democrats at last, that they were just making empty promises without actually benefiting the poor? www.vox.com/2019/3/19/18240377/estate-tax-wealth-tax-70-percent-warren-sanders-aoc. Or is just another facade?
Bibliography:
- www.npr.org/sections/money/2019/02/26/698057356/if-a-wealth-tax-is-such-a-good-idea-why-did-europe-kill-theirs If a Wealth Tax is Such a Good Idea, Why Did Europe Kill Theirs?
- www.youtube.com/watch?v=XzonR81vVzM The Mayfair Set, Episode 2 - Entrepreneur Spelt S.P.I.V. (1999) by Adam Curtis explains nicely how in the 60's, Jim Slater bought stock of inefficient companies, and sold off inefficient assets to make a profit.He managed to do that because previously people had regarded those companies as family companies, and never looked into the fact that they families weren't actually majority shareholders anymore.While this increased efficiency, it also fired many people, and the government didn't manage to change legislation fast enough to tax those profits to increase welfare.
Poor countries don't have a lot of money.
Therefore, you have to pick a few key the next big thing deep tech bets, and invest on those enough.
These have to be few, because your country is poor, and so you can't invest on everything.
Therefore, the bets have to be well selected, because it is useless to make several insufficient investments: you have to pick a few ones, and put enough time and money into each one of them for them to stand any chance. These bets should be made and reevaluated on 5/10 year horizons.
The key things that you have to select are:
- which poor students you will bet on educating. Since you can't give amazing education to everyone, you have to select the most promising poor students somehow, and give those free amazing learning conditions: free gifted education
- which ares to focus on. Ciro believes that molecular biology technologies and quantum computing would be good bets. Focusing on the previous next big things, e.g. classic computers, is always a losing bet on average
And then you only tax those companies heavily when the start to bring in real money. These are startups remember! You only need 5 unicorns a year to call it a success. And countries should not be greedy and invest through equity, but rather recoup their investment through taxation alone.
Ciro's second removed uncle, who was a physicist at the University of Campinas, one of the best universities in the country, told him an anecdote. He had moved from fusion energy research to solar cell research. At some point, there was a research lab that needed 10 million to buy a machinery critical for their experiment. They asked and asked, and finally the government gave them only 2 million. So in the end they spent those 2 million in random ways, but of course did not achieve their research goal and no money came out of it.
He also explained how as a result of the insufficient investments, he felt clearly that some of the semiconductor production facilities related to solar power he saw simply were not able to control the production process adequately to produce consistent silicon. As a result, everything failed sooner or later as people found more and more bugs that they did not have the time to solve.
Another key investment is enticing back experienced exchange-students who have learnt new techniques to be heads of laboratory/founders to back in your country.
A fantastic initiative from Brazil for example is BRASA, which aims to put together Brazilian exchange students to make a difference back in Brazil.
Do not try to forbid external companies from selling in your country. Instead, fund your own companies to be able to fight the external market off. And if they can't, let them die and pick a different bet. Video "How Taiwan Created TSMC by Asianometry (2020)" has a good mention. Protectionism is something that Brazil notably tried to do, and look at what it led, not a single international success.