Cryptocurrencies & Quantum-Safe Protocols
"Stablecoin Squeeze" on Hard-Fork Cyrpto and the ensuing Treasury Windfall
The typical response to concerns about most cryptocurrencies and post-quantum protocols entails, "We can update the protocol with quantum-secure cryptography algorithms. What's the problem?"
Taxes.
IRS and Hard-Forks
The IRS recently clarified (thankfully) its policy on hard-forks and crypto issuance, and the policy seems fairly clear: if there is an "accession to wealth" from the fork, i.e. my new tokens post-fork have a higher value than my original cost basis, I owe income taxes on the fork - that means I have to pay income taxes on any "unrealized gains" resulting from any hard-fork.
If there is no "accession to wealth" after the fork, meaning I had $100 of token X before the fork and now have $100 of token Y after the fork, there is no gross income to report from the hard-fork.
BTC Hard-Fork & Income Taxes
The post-quantum secure BitCoin token could, indeed, imply an "accession to wealth" for all BitCoin token wallets, and thus create a windfall for the IRS (and a headache for the CryptoBros).
"Stablecoin Squeeze" and the Post-Quantum BTC Premium
A hard-fork in BitCoin would mean that stablecoins would require mass-conversion of all legacy BitCoin into the new quantum-safe BitCoin. This would create a "stablecoin squeeze" on the new token, and such a swap would occur with a significant premium - imagine low-double digits.
Crypto in the "Big Picture" - A Very Fair "Wealth Tax"
Rather than scaring-away capital from the very necessary stablecoins, today, the Trump administration has cultivated enthusiasm and confidence in the crypto economy and stablecoin ecosystem - as long as they recycle their surpluses into US Treasury bills...
However, despite the current peace, the US Treasury stands with its scythe ready, for when "they" decide to announce that BitCoin is no longer safe because of quantum computing vulnerabilities, the stablecoin markets will impose a premium on the resulting hard-fork new tokens, resulting in a nice double-digit "accession to wealth" for legacy BitCoin token owners and a reportable tax event.
Crypto - There's a Reason It's Legal
It seems that crypto has fulfilled several useful tasks for the Nixon 2.0 (Trump) administration:
- Created a new vehicle for (unwitting) financial repression and skewed demand for Treasury bills (e.g. https://wealthmtg.com/stablecoins-and-the-path-to-lower-mortgage-rates/ )
- Eliminated Central Bank Primacy (a legitimately "good thing" for those of us who value any sort of personal freedom) - introduced payment rails independent of the entire proposed CBDC structure of the COVID-aligned globalist ilk, who depended on obedient Central Banks using their member banks as control organs for social engineering along "Globalist" lines, e.g.:
- "cancelling" of opposition bank accounts, e.g. right-wing celebrities, nationalist politicians, et cetera
- blocking payments - e.g. firearms, carbon-intensity, et cetera
- Finally, the eventual hard-forks of BitCoin and all other cryptotokens and currencies, which, because of stablecoin demand, would produce new tokens priced at a premium to the original ones and provide a massive tax windfall revenue to the IRS