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IRS Expands Crypto Question on Tax Form

05/08/2022 by Idelto Editor

IRS Expands Crypto Question on Tax Form

The Internal Revenue Service (IRS) has modified the crypto question asked on Form 1040, the tax form used by all U.S. taxpayers to file an annual income tax return.

New Crypto Tax Question

The Internal Revenue Service (IRS) published a draft of Form 1040 for the 2022 tax year last week. Form 1040 is the tax form used for filing individual income tax returns in the U.S.

The crypto question on the front page of Form 1040 now reads: “At any time during 2022, did you: (a) receive (as a reward, award, or compensation); or (b) sell, exchange, gift, or otherwise dispose of a digital asset (or a financial interest in a digital asset)?”

The new question expands on its previous version on Form 1040 for the tax year 2021, which states: “At any time during 2021, did you receive, sell, exchange, or otherwise dispose of any financial interest in any virtual currency?”

In March, the IRS published a notice stating: “All taxpayers filing Form 1040, Form 1040-SR, or Form 1040-NR must check one box answering either ‘Yes’ or ‘No’ to the virtual currency question. The question must be answered by all taxpayers, not just taxpayers who engaged in a transaction involving virtual currency in 2021.”

The tax authority explained that taxpayers can check “no” if they merely own cryptocurrency and have not engaged in any crypto transactions at any time during the year. In addition, they can check “no” if their activities were limited to holding or transferring crypto within their own wallets or accounts, purchasing crypto “using real currency, including purchases using real currency electronic platforms such as Paypal and Venmo,” and “engaging in a combination of holding, transferring, or purchasing virtual currency as described above,” the IRS detailed.

What do you think about the new IRS tax question? Let us know in the comments section below.

Filed Under: 1040, 1040 tax form, Crypto tax, crypto tax question, English, IRS, irs tax form, irs tax question, News Bitcoin, tax question 1040, Taxes

Cointelli Makes It Easy to Report Coinbase, Binance, and Kraken Transactions to the IRS

08/03/2022 by Idelto Editor

Many crypto exchanges send tax forms to the IRS, each with their own list of supported tokens and info that doesn’t necessarily match up. This can create a lot of confusion for U.S. taxpayers. Luckily, Cointelli can swiftly and reliably create a unified tax report with the push of a button.

And if there are any inter-platform inconsistencies, Cointelli has a powerful error correction feature that lets users easily edit data. Cointelli’s algorithms make it easy to compile all of the data from Coinbase, Binance, Kraken, and many others into one tax report. And all for the very affordable price of just $49!

What is the Best Software for Crypto Taxes?


American cryptocurrency traders and investors need all the help they can get when it comes to navigating the tax system effectively. Cryptocurrency has made things complicated for many people, as the IRS classifies it as ‘property’ for taxation purposes — dismantling a common misconception that there is no tax on crypto. U.S. investors, in particular, are having to pay more attention to reporting taxes on cryptocurrency. With bullish growth in cryptocurrency investment, and the market expected to grow massively, the U.S. government has ramped up its efforts to get its slice of the pie. The IRS first drafted its cryptocurrency tax rules back in 2014, and Washington has recently given the agency another $80 billion to track and catch tax evaders.

Crypto taxes aren’t easy to wrap your head around. Doing them correctly often involves accurately reporting complex transactions across many crypto platforms. Thus, having the right software can be a lifesaver when it comes to getting it right in a timely manner. Cointelli is a cloud-based crypto tax preparation software solution that uses its unique technology to help individuals, businesses, and CPAs save more on crypto taxes. Cointelli specializes in helping users reap the most crypto tax benefits possible while reporting their crypto taxes accurately.

So, what else sets Cointelli apart? Well, the critical first step in calculating your crypto taxes with tax software is collecting and importing your transaction data from across multiple exchanges and wallets. This process may look straightforward, but there are some essential steps you need to take to ensure accuracy.

First, you have to check how many crypto exchanges and wallets the software supports. Cointelli, for example, supports a considerably larger number of major crypto exchanges than many competitors — and with full import capabilities. Examples of exchanges supported by Cointelli include major ones like Coinbase, Binance, KuCoin, and many more niche exchanges as well. To add to this, Cointelli also features support for at least 15 blockchains, including popular ones like Bitcoin, Ethereum, and even Dogecoin.

Cointelli offers support for more wallets and exchanges and provides the easiest methods of importing transaction data from across these platforms. These benefits also make Cointelli very easy to use for first-timers, making it an excellent pick when choosing your crypto tax software.

Reporting Taxes to the IRS


Many significant exchanges like Coinbase, Binance, and Kraken send different tax forms to the IRS (for instance, Coinbase reports 1099-MISCs and Kraken reports additional kinds of 1099 forms). However, these exchanges only know about the transactions that happen in their own systems. Each significant exchange also has its own list of supported cryptocurrencies, which won’t necessarily match up with other lists. This is why it’s so important to have a crypto tax software solution that quickly and accurately aggregates all of this information in one place and processes it for you.

Cointelli not only delivers these services, but makes them attainable for all, with full access available for a simple, flat-fee of $49 per year and no hidden costs. In addition, users can run the program for free to see how much they will be paying in crypto taxes, and won’t pay anything until they decide to download the completed Form 8949. In addition to making it easy to fill out and download the completed reports and forms, Cointelli also has a seamless and easy-to-use interface and provides 24/7 customer service.

Importing transaction data into Cointelli from various exchanges like Coinbase, Kraken and Binance.US is a straightforward affair. But for anyone having trouble, Cointelli provides detailed and instructive guides and walkthroughs to show you exactly how it’s done.

For example, to import your data from Binance.US, you would simply follow the steps below:

How to Import Exchange Data from Binance.US

  • First, sign up on Cointelli
  • Then, log in to Binance and create your API key
  • Copy and paste your API key into the page, as below


Once the import is complete, and the transaction data has been successfully added, you will be able to confirm your transactions. Once that’s done, Cointelli will then prepare your Form 8949.

But what if you’ve traded somewhere else, like on Kraken or Coinbase? No problem! Just follow Cointelli’s instructions for each exchange, and soon you’ll have your tax forms in hand.

Click here for more information.

  • This article is intended to provide general financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always consult with your own professional tax advisor for advice on taxes, your investments, the law, or any other business and professional matters that affect yourself or your business.
  • Cointelli is currently only available in the US. The above financial and tax information pertains to the US market.


 

 


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Filed Under: Cointelli, English, IRS, News Bitcoin, Sponsored, tax reporting, tax software

IRS Special Agent on Crypto: ‘We See Mountains of Fraud in This Area’

27/01/2022 by Idelto Editor

A special agent with the Internal Revenue Service (IRS) says the tax agency is “seeing mountains and mountains of fraud” in the cryptocurrency space. The IRS criminal investigation unit is trying to train all of its agents on crypto and non-fungible token (NFT) issues because “this space is the future,” he stressed.

IRS Special Agent Says Crypto Is Rife With ‘Mountains and Mountains of Fraud’


A special agent in charge of the IRS’ criminal investigation division in Los Angeles, Ryan Korner, talked about cryptocurrency at a virtual event hosted by the USC Gould School of Law Tuesday. He was quoted by Bloomberg as saying:

We’re just seeing mountains and mountains of fraud in this area.


He explained that non-fungible tokens (NFTs) and crypto in general are prone to market manipulation, adding that high-profile individuals could influence crypto prices with just one tweet.

Noting that celebrities are not immune to the tax authority’s criminal probes, the special agent clarified: “We’re not necessarily out there looking for celebrities, but when they make a blatant or open comment that says ‘Hey, IRS, you should probably come look at me,’ that’s what we do.”

Korner detailed that a range of crypto-related activities are of concern to law enforcement agencies, such as people paying millions of dollars for assets, like NFTs, that don’t seem to have that kind of inherent value. He noted that criminals can use that to their advantage to launder money.

The IRS seized $3.5 billion in crypto during the fiscal year 2021, which represents 93% of all funds seized by its criminal investigation unit during the same time period. The tax agency expects to seize billions of dollars more in cryptocurrency this year.

The IRS’ criminal investigation division is trying to train all of its agents on crypto and NFT issues because “this space is the future,” the special agent opined, adding that the agency is also looking to increase collaboration and share information with other federal agencies.

What do you think about the IRS special agent’s comments? Let us know in the comments section below.

Filed Under: Crypto Fraud, English, IRS, IRS agent, irs bitcoin, irs ci, irs criminal investigation, irs crypto, irs crypto fraud, irs cryptocurrency, Law enforcement agencies, Money Laundering, News Bitcoin, nft, Regulation, Ryan Korner, Special Agent, Tax

How Does Bitcoin Impact Your Taxes? 10 Things To Know

26/01/2022 by Idelto Editor

A professional tax advisor explains the key things for Bitcoiners to know when filling out their returns for 2021.

Source: greentradertax.com.

Yes, it’s that time of year again. The new year is upon us and we all need to start gathering tax documents. Fun stuff, right? And if you’ve invested in bitcoin or sold bitcoin, then things get really fun.

The below list of items is meant to help you understand the most critical aspects for tax filing when it comes to bitcoin. And it should be noted that this specifically covers U.S. taxes (though U.K. regulations are very similar).

Here’s what you need to know:

1. Bitcoin Is Taxed As Property

That’s right, just like stocks, bonds or real estate. Although often used as currency, it is not treated like a currency for tax purposes. Every single time you sell, spend or exchange bitcoin, you have executed a taxable transaction. You have a capital gain or less every time you dispose of your bitcoin, unless it is by gifting it to someone.

I know what you’re thinking. Well, I know what I’m thinking, anyway: This necessitates a lot of detailed record keeping. In order to compute capital gains and losses, you need to know your original cost basis. Now, crypto exchanges will keep a history of all of your transactions, but they won’t be reporting your cost basis to you on any regular basis. In addition, if you’ve moved coins or taken self-custody, you really need to keep track of all your coins and their original costs. I’m thinking a nice Excel spreadsheet. And stay up on it regularly. Your tax accountant will be pleased.

2. Bitcoin Received From Mining Are Taxable

If you’re mining bitcoin, every coin you mine is taxable as ordinary income. Don’t let the word “ordinary” fool you. Ordinary income, in IRS parlance, is taxed at higher rates than long-term capital gains are. (“Long term” in the U.S. means you’ve held the asset for one year or longer.)

Not only is mining taxed as ordinary income, but also as self-employment income, so you’ll owe social security and medicare taxes as well.

Now, you get to write off all of your expenses associated with the mining operation, such as electricity, which is a big one. You can also write off the cost of the mining rigs over several years, and in some cases take a deduction for the entire cost in year one. That’s a nice benefit.

How do you tally up and report how much income you’ve generated, in U.S.-dollar terms? The IRS regulations say your income is the fair market value of the bitcoin you mine on the day you receive it. Thus, each day you have more income. Again, here comes a great Excel spreadsheet opportunity.

Now, if you mine bitcoin as a hobby, you can simply report the income on your tax return as “other income,” and as such, won’t pay self-employment taxes like social security and medicare. The downside, however, is that you won’t be able to write off any expenses against the income. If you do want to take the deductions, report the income and expenses on U.S. Schedule C.

Note: If you report income from mining, you now have a cost basis for the coins to use against future capital gains — more record keeping.

3. How To Answer “That Question” On Top Of Form 1040

Source: Technologymanias.com 

Above is what the draft version of the 2021 Form 1040 “crypto question” looks like. Note that this is a slight change from 2020, when the question also included “sending” any cryptocurrency. If you only purchased bitcoin during 2021, you can answer “No.”

“At any time during 2021, did you receive, sell, exchange, or otherwise dispose of any financial interest in any virtual currency?”

So, do you have to answer this? Yep, and you should answer it honestly. Will it get you audited? Probably not, since only .45% of taxpayers with incomes between $75,000 and $200,000 were audited in recent years. If you answer the question “Yes,” the IRS may look at your return and see that some bitcoin transactions are reported, capital gains and mining income, mainly.

4. Being Paid In Bitcoin, Or Paying In Bitcoin, Are Taxable Events

If someone pays you for your services in bitcoin, that is taxable as self-employment income. Your income is the U.S. dollar value of the coins you received on that day of payment. Like with mining, you then have a cost basis for those coins.

Likewise, if you pay someone else for their services with bitcoin, you have just disposed of some coins. As such, you have either a capital gain or capital loss on the transaction.

5. Paying For Starbucks With Bitcoin Is A Taxable Transaction

Though Starbucks makes some amazing drinks, you really shouldn’t pay for them in bitcoin because, yes, it is a taxable transaction, every time you spend your bitcoin. Your next question: “Is there a de minimis exception for such a small transaction?” No, not at this time.

And that, in a nutshell, is the problem of having a property that acts like a currency, and a currency that acts like a property. There is not yet a user-friendly system of taxation to handle all Bitcoin transactions fluidly.

6. You Can Deduct Losses From Trading Bitcoin, But…

Capital losses from trading any asset can be used to offset capital gains, whether the gains were from bitcoin, stocks, real estate or any property. That’s the good news. If you’ve suffered some losses in bitcoin, but had gains in stocks, or vice versa, you can offset.

If you didn’t have any gains to offset, or your losses are greater, you can still deduct some this year. Taxpayers can deduct up to $3,000 per year in capital losses that exceed your gains. That’s not much, I know. However, you can carry these losses forward to deduct against profits in future years.

7. Exchanging Bitcoin For Other Cryptocurrencies Is Taxable

A like-kind exchange is where one asset is exchanged for another similar one, typically two parcels of real estate. But there is no provision for “like-kind” exchanges for cryptocurrencies. This tax provision enables the seller to defer paying capital gains taxes on the profit until a time when the second asset is sold.

8. Do Bitcoin Exchanges Report Transactions To The IRS?

Cryptocurrency exchanges do not report sales of assets in the same manner as do stock brokerages. Every sale of stock or mutual funds is reported, so you must show each sale on your tax return, even if the sale doesn’t result in a gain. Tax reporting by cryptocurrency exchanges is, at this time, a mixed bag. And that is something that the U.S. government wants to wrap its arms around.

For example, Coinbase, the largest U.S.-based exchange, will not be issuing Form 1099-K or Form 1099-B to report sales of cryptocurrency. Thus, none of your sales proceeds are being shared with the IRS. You have the sole responsibility of reporting all of your sales proceeds and cost basis. The only transactions that Coinbase reports are rewards or fees that you may have earned during the year, and only if they exceed $600. Those are reported on form 1099-MISC.

Gemini takes a completely different approach. The company views itself as a third-party settlement organization (TPSO) and as such files Form 1099-K for certain transactions. (A 1099-K is usually filed by merchant services companies to report funds sent to retailers.) Gemini will only report if your sales of digital assets exceeded 200 transactions in a year and exceeded $20,000 in proceeds.

Binance, a Malta-based company, does not report to the IRS, and is actually no longer serving U.S.-based traders. Binance had previously issued Form 1099-K to certain traders.

9. Generally, You Don’t Have To Pay Taxes On Bitcoin Donations To Charity

Though by giving your bitcoin to a charity you’ve actually disposed of it, you will generally not pay taxes on the transaction, even if the coins have gone up in value. Even better, you may be able to take a deduction as a charitable contribution in the amount of the fair market value on the date of the donation — win-win. You can’t say that very often with regards to taxes.

If someone gifts you some bitcoin, good for you. Best of all, it’s not a taxable transaction to you — a win-win, again. When you dispose of the coins in the future, your cost basis will be the same as the person’s who gifted it to you. So, in that case, a little communication will be necessary.

10. Key Points To Remember

Taxes can get pretty complicated with bitcoin. Key points to remember:

  • Every time you dispose of bitcoin, it triggers a taxable event
  • Keep accurate, thorough records of all buys and sells
  • Don’t expect your bitcoin exchange to give you a nice, neat yearly summary
  • Seek professional help (tax help that is) in an accountant who knows the bitcoin landscape

This is a guest post by Rick Mulvey. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

Filed Under: audit, Bitcoin Magazine, business, English, Feature, IRS, Taxes

Why Are Nation-State Agencies Ignoring Bitcoin As It Challenges Dollar Hegemony?

15/12/2021 by Idelto Editor

As bitcoin gains traction in becoming the world reserve currency, why are globalists ignoring it? Whatever the reason, Bitcoiners must stay vigilant.

On the surface, Bitcoin seems poised to take over as the world reserve currency based on the game theory of people converging on the adoption of a single hard and sound currency.

The original cryptocurrency has officially entered into its teenage years following the publication of the white paper on October 31, 2008. Plebs have been stacking bitcoin since the genesis block was mined on January 3, 2009. Both private and public companies have been accumulating it, and even governments have taken the plunge. Looking at the macro picture is certainly exciting from the standpoint of an early adopter.

Every ten minutes, blocks are being added to this decentralized timechain and Bitcoin is working as designed. The task at hand is for Bitcoiners to stay vigilant in order to keep it that way. One strategy for this is to constantly be thinking of attack vectors in all of their forms. To that end, this piece focuses on possible social and governmental sabotage.

El Salvador And Bitcoin Vs. The Globalists

On November 20, 2021, Nayib Bukele, the president of El Salvador, announced plans to create a “Bitcoin City,” funded by bitcoin-backed bonds.

The city would charge 0% income, capital gains, property, payroll and municipal taxes. The only tax levied will be a value-added tax. In addition to all of those 0% taxes, the city plans to have 0% carbon emissions by utilizing the geothermal energy from the nearby Conchagua volcano.

The country is funding this centrally-planned project through bitcoin-backed “Volcano Bonds” spearheaded by Blockstream. Bukele has been praised by the Bitcoin community for adopting bitcoin as legal tender in El Salvador. He has welcomed Bitcoiners with open arms, offering citizenship to people who invest 3 bitcoin in the country and even changed the travel requirements to exclude proof of vaccination and negative COVID-19 test results, which coincidentally went into effect on the same day that the Adopting Bitcoin conference started.

Bukele’s term has not been without criticism. In May, he ousted five Supreme Court justices and the attorney general, purportedly because they ruled that his COVID-19 stay-at-home order was unconstitutional.

In September, Bukele passed laws removing judges who were over 60 years old, effectively firing approximately 30% of the sitting judges. A few days later, Bukele’s courts ruled that presidents could run for consecutive terms, defying El Salvador’s constitution and setting Bukele up for an additional term.

Following this, the National Assembly passed a law allowing for land and estate expropriations (read: seizure) in the name of an ambiguously defined “public interest.” There’s more questionable behavior from Bukele and his cronies, but the theme here is a strong trend of nationalization and squashing opposition that is reminiscent of other authoritarian regimes.

These are not qualities that Bitcoiners laud and we should be wary of this type of statist conduct. Adopting Bitcoin does not preclude governments from being totalitarian empires and we should be aware of the cognitive dissonance that comes with praising a country for adopting a free and open monetary network while also ignoring its obvious tyrannical tendencies.

Source

The announcement of “Bitcoin City” was met with excitement by Bitcoin news outlets and many people on Bitcoin Twitter, though there are some who feel skeptical of this plan, myself included.

I think it’s possible and even likely that Bukele truly “gets it” and wants Bitcoin to succeed. I also find it curious that his strategy to make bitcoin legal tender and facilitate positive tax policy for bitcoin investors in the country is being largely ignored/allowed by the Bank of International Settlements (BIS), the International Monetary Fund (IMF) and the World Bank.

Bukele was also recently announced as a speaker at Bitcoin 2022 in Miami, FL. I am especially suspicious because he will be in attendance for the speech in the very country whose power he is directly usurping by abandoning the dollar standard. Notably, the United States has been extremely quiet about El Salvador’s adoption of Bitcoin.

So, what is going on here? Are these world organizations largely ignoring this radical move because El Salvador is deemed too inconsequential of a nation? An executive at the BIS said El Salvador’s adoption of bitcoin as legal tender is an “interesting experiment,” the World Bank denied El Salvador’s request for help adopting bitcoin as legal tender, and now that the country did it regardless, the IMF has issued a gently-worded statement advising against the country using bitcoin as legal tender due to its volatility. Most recently, the chief at the Bank of England called El Salvador’s move to adopt Bitcoin as its currency concerning.

Why are these major globalist organizations being so light-handed in their responses to this overtly subversive move? And who will be the first Bitcoiners to move to Bitcoin City at the base of a volcano?

Source

Where Are The “Economic Hit Men”?

I admit that my worldview is biased toward expecting the United States government to handle this with some sort of renegade, extrajudicial “accident” à la the Bay of Pigs, Gulf of Tonkin, Mossadeq coup, numerous assassinations in Africa, etc. Why are the three-letter agencies in the United States ignoring El Salvador and their adoption of bitcoin as legal tender?

In “Confessions Of An Economic Hit Man,” John Perkins writes about the presidents of Ecuador and Panama, Roldós and Torrijos, respectively, who were assassinated by the CIA for not getting in line with global imperialism.

The book details numerous examples, such as those in which agents of the corporatocracy went into developing countries, projected unrealistic electrical infrastructure growth and sold the locals the necessary facilities to achieve it, putting them in massive debt to the United States so that the countries would be forever subservient to the interests of Washington and Wall Street.

This originated with the Monroe Doctrine, which took manifest destiny a step further in the 1850s by using it to claim that the U.S. had special rights all over the hemisphere, including the right to invade any nation in Central or South America that refused to back U.S. policies. Later, this was invoked to justify intervention in the Dominican Republic, in Venezuela and in Panama in order to develop the Panama Canal. The leaders who had the foresight to see this economic subjugation for what it was and chose not to comply often had coincidental accidents and were replaced by authoritarian dictators.

In his book, Perkins details how the Panama Canal was completed after a coup orchestrated by Theodore Roosevelt, whose troops killed a local militia commander and declared Panama an independent nation where a puppet government was installed and the first Panama Canal Treaty was signed, without Panamanian influence or support.

Panama was then ruled by oligarchic families with ties to Washington and who allied with United States’ interests by supporting the CIA, NSA, big businesses, and anti-communist factions. The result was an opulent, U.S.-controlled Canal zone surrounded by destitute Panamanian slums. The folk hero and politician, Omar Torrijos, negotiated a deal with the Carter administration to repatriate the Panama Canal. This angered the Reagan-Bush administration so much that it sought to assassinate him. Torrijos died in a plane crash during a routine flight which most of the world outside of the United States viewed as a CIA assassination.

This is only one example of United States government intervention in world affairs from the book. Perkins explains how the Great Depression resulted in the New Deal, which further advanced economic regulation and governmental financial manipulation in the country, directly led to the creation of the World Bank, the IMF and the General Agreement on Tariffs and Trade after WWII.

A focus of this time period was the promotion of Robert McNamara. This Keynesian advocate rose in the ranks at Ford Motor Company to become the company’s president. He was then appointed secretary of defense and later president of the World Bank. McNamara was one of the primary, early examples of the military-industrial complex, having served as the head of a major corporation, a government cabinet and the most powerful bank in the world. This is a clear example of the blurred lines of corporate and government interests which continues to this day, with members of Congress owning significant amounts of Pfizer and Johnson & Johnson stock while pushing for mandatory vaccination.

Is the world’s ostensible acceptance of El Salvador opting into bitcoin as legal tender due to negligence, or is there something else going on?

Source

Paranoiac, Adversarial Thinking

One possibility is that El Salvador and its adoption of bitcoin as legal tender is being ignored by central banks around the world and the U.S. alphabet soup agencies because the time of American Imperialism is coming to an end due to insolvency and the implosion of dollar hegemony.

Or maybe there is a larger play at work to bring about the Great Reset using bitcoin as a backstop. This is a highly improbable possibility, but a possibility nonetheless.

On a recent “Tales From The Crypt “episode, Matt Hill of Start9 spoke with host Marty Bent about the ingenuity of governments making Bitcoin regulations increasingly cumbersome for those interacting with on/off ramps through institutional systems, but without making Bitcoin outright illegal. His point was bringing attention to the effectiveness of wearing people down by making a certain behavior inconvenient.

Hill said, “The internet, as is, and the server/client architecture, as is, is not conducive to a viable future for Bitcoin. Bitcoin cannot live on a centralized internet. Not as ‘Bitcoin,’ anyway. If there’s one node, running on one server, controlled by one entity, it’s not really Bitcoin anymore.”

Bent then mentioned the censorship-resistant assurances that Bitcoin provides when it’s running in a distributed way and Hill went on to say that consensus rules can be changed more easily (when centralized) and compared Bitcoin to a surveillance tool if it’s running on a centralized server.

“Bitcoin in the hands of a few people on a few servers, which again, it’s not going to happen, but it is sort of a statist’s wet dream… It’s a giant, public, open ledger of every transaction on Earth, but if you can just pin identities to those things it’s perfect,” Hill said.

This type of thinking is extremely necessary for us to examine when we think about possible attack vectors for Bitcoin.

Catherine Austin Fitts, former assistant secretary of housing and federal housing commissioner at the U.S. Department of Housing and Urban Development in the first Bush Administration, is an outspoken critic of COVID-19 lockdowns, vaccine passports, central bank digital currencies (CBDCs), and the Great Reset in general.

Recently, videos have been circulating of her speaking about central bankers, “exercising a coup d’état where they are taking control of fiscal policy [from the electorate] as well [as monetary policy]. With the advances of digital technology, vaccine passports will not be about health. Vaccine passports are part of a financial transaction control grid that will absolutely end human liberty in the West.”

This hypothesis is not new to those on Bitcoin Twitter nor to many of the people who believe in the freedom and financial sovereignty that Bitcoin provides.

In an interview with Greg Hunter, Austin Fitts said, “We are in Never, Never Land. We have two groups in our society: One group that can print money, and the other who can earn money. What we saw last year is the people who could print money declared war on the people who earn money. They basically said we are going to shut down your businesses, and we are going to suck up and take your market share or buy you out with money we print out of thin air… There is no pandemic. What this is is an economic war.”

She recommended getting corrupt institutions out of your life, including keeping money with Federal Reserve-related banks, but surprisingly, she also said in an interview with Daniel Liszt that, “You can’t solve a political problem with a financial product.”

This is irreconcilable with what many Bitcoiners believe because, as they say, “fix the money, fix the world.”

Austin Fitts has been wary of Bitcoin for many years and spoke publicly against it as early as January 2014. In her interviews, she makes some relevant points that Bitcoiners should take into consideration, though oftentimes, she clearly misunderstands how Bitcoin works on a fundamental level. I won’t get into everything she has said about Bitcoin that is factually inaccurate, but she believes that the government could take the bitcoin price down to zero or shut it down in the same way that social media companies are shutting down people’s accounts. She also has equated the seizure of assets from Silk Road as proof that the system is insecure. While the aforementioned points have been disproven through other examples, like police being unable to access “seized” bitcoin and Marathon Digital Holdings announcing it would no longer be censoring transactions (with reasons not specified), Austin Fitts does share some important points from her interview with Greg Hunter that Bitcoiners should focus on, especially considering that the digital currency is entering the world stage:

1. “The easiest way to build the prison is to get freedom lovers everywhere building it for you.”

CBDCs will most likely be modeled after bitcoin, though the goal will be complete control of individuals spending habits with unsanctioned purchases being disabled and/or leading to a negative impact on a social credit scoring system, like the one China is currently using.

Austin Fitts thinks that governments around the world are letting Bitcoin developers build out a system, but will then usurp its functions for their own globalist agenda. She has mentioned “The Master Switch” by Tim Wu, who details that, when new technology arises, there’s a period of innovation and then it centralizes because it’s cheaper and easier that way.

As Bitcoin users, we need to continue staying vigilant (read: toxic) about protecting the Bitcoin network from malicious actors by keeping the network decentralized. This means running a Bitcoin full node. It’s not too expensive to run a node, but it’s extremely important. “Not your node, not your rules,” as the saying goes.

In her most recent video release, Austin Fitts declared some steps to decentralize the money.

“We have to figure out how to take back control of the money system,” she said. “The important thing about any money or financial system comes down to the quality of governance. The reason the current financial systems are so powerful is because their governance is backed up by awesome force. We won’t have awesome force to back up ours. We need excellence in governance, a commitment to rule of law, and a culture because there’s not enough enforcement in the world to backup a great culture. That enforcement has to come not just from law, but from culture.”

She went on to say, “That system is going to have to be both physical and digital. We need the digital for efficiency, but we need the physical to keep it honest and real.”

To be frank, it sounds like she’s talking about Bitcoin: digital value transferred using hardware nodes and miners which use physical electricity.

2. “Invest your money into things that will build resiliency for yourself and your family. Are you spending all your money on bitcoin and not supporting your local farmers?”

In an August interview with Whitney Webb, Austin Fitts shared some recommendations for surviving the coming instability. Her biggest reminder is to be resilient. Following resiliency, her suggestions include securing ways to source healthy food and finding water independence through drilling a well.

She also suggested using jurisdictional arbitrage to move where the cost of living is low to avoid inflation as much as possible. Moving further from cities increases the chances that the people around you know how to do things for themselves.

Bitcoin citadels are frequently discussed as a means of creating sovereign communities. Food security through local economies is best cultivated through farmers’ markets and direct support through community supported agriculture (CSA). All of this advice involves building “living” equity. As Fitts said, “If you are putting all your money into Bitcoin and you have no farmland, no cattle, and no farmer, you may be wealthy on Bitcoin, but you’re going to have to eat synthetic meat from Bill Gates.”

3. “How many hours are you spending on Bitcoin? Could that time be used supporting your family or otherwise being put to work?”

There are thousands of hours of phenomenal podcasts about Bitcoin, countless Bitcoin books and articles to read, and tons of video interviews and documentaries to watch — let alone the time it takes to figure out how to use Bitcoin, connect your wallet to your node, and create multisignature quorums. These are all incredibly important pratices, but so are other universal abilities. If you invest in developing your skills, they can go with you if you need to move: growing food, building, coding, canning, wilderness survival, plant/fungus identification, first aid, sewing, etc. These are all things that can be used in many different contexts.

In conclusion, as Bitcoiners, we need to remain skeptical of everything, and I mean everything. Stay vigilant and use adversarial thinking in order to avoid becoming complacent so that we can protect the monetary sovereignty that the Bitcoin network provides.

G. Michael Hopf said, “Hard times create strong men. Strong men create good times. Good times create weak men. Weak men create hard times.” It seems clear that we are in a period of hard times right now. We need to make sure that as we develop into the strong men (and women) that will create good times in the future, we can continue them for as long as possible.

As Austin Fitts suggested as she ended her speech, “Don’t ask if there’s a conspiracy, if you’re not in a conspiracy, you need to start one.”

Take everything you read, hear, and see with a hint of suspicion, including this article.

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This is a guest post by Craig Deutsch. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

Filed Under: Bitcoin Magazine, CIA, culture, el salvador, English, freedom, IMF, IRS, Nation State, Nayib Bukele, privacy, surveillance, U.S. dollar, World Bank

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