Is Crypto-Currency Safe From The Government?

The short answer is it depends.

If you own it as a speculator and expect to convert some vast sum back into fiat money, then no. If you are planning to do person to person transfers, (P2P) then, for now, yes.

Crypto-currency is only safe from the government so long as it stays in the blockchain. There are  choke points where it comes out of the blockchain. The money-changers are not immune from the government, so your transaction will appear and may be subject to freezing or confiscation. Certainly taxation.

If you want to see how freezing and confiscation works examine how gold worked in 1933. As long as you have bullion you can trade on a P2P basis. If you have gold certificates, there is a middle party the government can control to your detriment. If you hold bullion and the government finds out, you will be punished.

You might notice that P2P is extremely clumsy by comparison to mediated transfers of what we think of as money now.

Should anyone care?

I decided a while ago that if I decided to buy crypto-currencies, I wouldn’t care. If I were willing to pay taxes on the gains if any, then I expected to be left alone. My interest in buying drugs, slaves, or assassinations on the dark web is zero, so no value there. I looked at it as a parallel idea of currency. With a speculative gain possible. Sort of like trading currency futures contracts.

No more.

With the recent nonsense of the emergencies act invocation in Canada, I now fear the government is untrustworthy. I don’t see how they can earn that trust back, either. It is like the near perfect dog that one time bites a child. Regardless of cause, do you ever trust it completely again. I would want to trust the dog, but there would always be the question. So too with the government itself and many of their agencies.

I still trust the weights and measures branch, but I am hard pressed to think of the second one I trust. The police, the health ministries, the justice department, the CBC, local governments, and most corporate media are not worthy of notice. Contempt seems more appropriate. Contempt doesn’t go away easily.

I think we are seeing the wisdom of the ancient Chinese curse, “May you live in interesting times.”

The bit to take away

The future is becoming very difficult to predict even within wide boundaries. Stay alert. Stay skeptical. Be brave.

An aside

Congratulations to fellow Peterborough native, Michael Moldaver. Michael is a contemporary and he lived not far away when we were young. His career path lead him to criminal law and eventually the Supreme Court of Canada. He will be retiring from the court come September. Enjoy your new life Michael.

 


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I build strategic, fact-based estate and income plans. The plans identify alternate ways to achieve spending and estate distribution goals. In the past, I have been a planner with a large insurance, employee benefits, and investment agency, a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business. I have appeared on more than 100 television shows on financial planning have presented to organizations as varied as the Canadian Bar Association, The Ontario Institute of Chartered Accountants, The Ontario Ministry of Agriculture and Food, and Banks – from CIBC to the Business Development Bank.

Be in touch at 705-927-4770 or by email at don@moneyfyi.com

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