Cryptocurrency Taxation – A Bit Brain Guide

Cryptocurrency Taxation – A Bit Brain Guide


If you’re worried about the taxes which you need to pay on your crypto trades, Defi earnings, staked coin dividends etc, then my question to you is:

“Why on Earth does your government know what you’re doing with your crypto?”

You’re doing it wrong; that’s not how crypto works!

I need to be very clear here:

DECENTRALISED MONEY HAS NOTHING TO DO WITH GOVERNMENTS!

They did not issue it, they do not control it. It does not reside within their jurisdiction.
It is YOUR money, not THEIR money!
It is The People’s monetary system, not The State’s monetary system!

They have absolutely no right to tell you what you may or may not do with your decentralised money, none whatsoever! What have they possibly done to earn the right to govern your crypto?
All they’ve done so far is to stand in the way with regulations and attempts to discredit the system! All they’re doing now is desperately trying to look relevant by establishing (doomed to fail) centralised CBDC systems and also trying to regulate decentralised cryptocurrencies like Bitcoin into the hands of the rich – akin to the heinous “Accredited Investor” limitations on US citizens wanting to invest in public startup companies. “If you’re not rich, you’re not allowed to become rich. Don’t even try, we’ve made that illegal. Go spend your money on alcohol and gambling instead, we’ve left that legal because it benefits the rich.”

States have absolutely no claim to funds generated on decentralised cryptocurrency systems!

If your government is holding out its hands for “its share” of your decentralised earnings, then who could have possibly told them about those earnings?

I’ll answer that.
Either:

1. you did,
or
2. a centralised crypto entity did.

Either way, who is to blame?
That’s right, you are.

Crypto is now at the stage where we have enough decentralised options to remain completely anonymous. We can now fly below the radar of unscrupulous governments who wish to take what is not theirs. (More on that later.)

It is time for you to buy not only into the ability of cryptocurrencies to make unparalleled monetary gains, but also to free the world from the stranglehold of centralised governments entities. If you are the kind of person who is only in crypto for the money, then either you are new here (which is a perfectly valid excuse), or you are part of the problem – in which case SHAME ON YOU!

For everyone wishing to avoid my accusations and shame-blaming: it’s time to put your big-boy pants on. It’s time to take a stand and “do crypto” the way that it’s supposed to be done – the way originally envisioned by Satoshi Nakamoto.

A patriot has a moral responsibility to stand up against that which is oppressive. I hereby charge you with that responsibility. Don’t you dare call yourself a patriot just because you wave a flag around! Don’t you dare try to label adherence to government rules and regulations as patriotism!

In the words of Thomas Jefferson:

“Rightful liberty is unobstructed action according to our will within limits drawn around us by the equal rights of others. I do not add ‘within the limits of the law’ because law is often but the tyrant’s will, and always so when it violates the rights of the individual.”

And in the words of Malcom X:

“Nobody can give you freedom. Nobody can give you equality or justice or anything. If you’re a man, you take it!”

I could go on. And on. And on. But I’ve done that before. I strongly suggest that you take a look:

· Give me Liberty, or give me Death! – Part 1

· Give me Liberty, or give me Death! – Part 2

A practical approach to dealing with government cryptocurrency snooping

 

Here’s my take on how to view crypto transactions for tax purposes:

They can know when and where I spend their fiat currencies on crypto.
They can know when and how much fiat currency I withdraw from crypto exchanges.
They can NOT know ANYTHING that happens in the interim; it’s quite literally none of their business.

Fiat is their baby, crypto is ours. They have a “right” (debatable but not entirely unreasonable) to know what is happening with their currency. They have no right to know what’s happening with decentralised currencies.

In a perhaps surprising twist of events, the Christian Bible gives us some great advice in this regard (who would have thought that you could find crypto investing advice in words spoken 2000 years ago by Jesus himself?). I’ve published this Bible excerpt before, but it bears repeating:

And they sent to Him their disciples with the Herodians, saying, “Teacher, we know that you are true, and teach the way of God in truth; nor do you care about anyone, for you do not regard the person of men. Tell us, therefore, what do you think? Is it lawful to pay taxes to Caesar, or not?”
But Jesus perceived their wickedness, and said, “Why do you test me, you hypocrites? Show me the tax money.” So they brought him a denarius.
And he said to them, “Whose image and inscription is this?” They said to him, “Caesar’s.” And he said to them, “Render therefore to Caesar the things that are Caesar’s, and to God the things that are God’s.” 
~ Matthew 22 vs 16-21; New King James version.

No matter your beliefs or religious affiliations, that’s still some seriously good advice! I’ll give my government the tax share which they demand of THEIR money, I will render unto Ceaser what is his. I will absolutely NOT give them that which is not theirs! If their face or symbol doesn’t appear on it, then I’m not even willing to debate such things with them, it’s not even worthy of consideration.

Easier said than done?

Yes it is, but it’s also not difficult per se. All it requires is a little vigilance and proactivity on your part. Don’t wait for them to “catch you” and then cry about it. You already know that the system is corrupt! You already know that it doesn’t play fair!

You know that there are dual standards: that it is fine and legal for a bank or government to steal literally billions of dollars from millions of people. You also know that if you stole $10 you would go to jail for it. Accept that reality and work around it.

Ironically, that kind of thing is exactly what the spirit of the cryptocurrency movement is fighting against; it is exactly why you need to fight government tyranny instead of complying with it!

So avoid the centralised exchanges, because they’re probably reporting straight back to your government (this is highly dependent on which exchanges you use and upon which country you reside in). If in doubt, then rather assume that your exchange IS reporting your activities to your government, or at least making them available on request.

Use privacy coins. Don’t publish your addresses unnecessarily. Change addresses with each transaction. Operate multiple wallets. Use DEXs. Never make your crypto holdings public. Remain anonymous where required (which is exactly why I blog as “Bit Brain”). Use VPNs, create alternative email addresses (Protonmail is AWESOME), don’t give out your phone number… all common sense precautions which will become habit with just a little effort.

Need more help and guidance? Don’t worry, I’ve got your back: “Flying under the radar”
Please note that I wrote this article more than two years ago, since then centralised exchanges have become even more regulated and government-friendly. Take that into account. Also note that Nash Exchange (as mentioned in the article) IS now live, there is a Nash referral link in my signature (I don’t think the referral program is still live, but the exchange sure is!)

Yours in crypto

Bit Brain

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

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Bit Brain
Bit Brain

Crypto aficionado. Realistic, opinionated, futurist, brutally honest autodidactic polymath.


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