/biz/ - Business & Finance

Within the next year, we will see the Holy Trinity:
1) Completely safe mixing/anonymisation of any cryptocurrency using DEXes (see pic)
2) Completely decentralised stablecoins, like Dai
3) Cross-currency payment, like REQ.

This means that you will be able to make any cryptocurrency holding completely anonymous. You will be able to make that holding stable against fiat. And you will be able to spend that holding in more and easier ways. This year is the last year that the tax office even has the potential to chase users about cryptocurrency trades (while they still have a chance to subpoena centralised exchanges). Part of me is actually worried about this. In an anarcho libertarian paradise, schools crumble, hospitals crumble, roads crumble. But pandora's box is open and this is only going one way.

Let me put something in perspective for anyone who is concerned about this. While the ATO may think the current system is an enforcement nightmare, it is absolutely nothing compared to what is coming in the next year.
Sure, it might be a massive pain to subpoena Binance for Australian customer information, especially when people withdrawing <2BTC a day (most people) might not have completed any KYC, but at least it's theoretically possible.
Read pic related, from the Blocknet whitepaper. An atomic swap DEX can transfer any token into any functional privacy coin then "out" into either the same token, or a different token. DEXes like Blocknet won't have anyone to subpoena. There's no third party. There will be literally no way to trace any coin that is moved this way. Match that with Dai:
>https://medium.com/@james_3093/the-dai-stablecoin-is-a-game-changer-for-ethereum-and-the-entire-cryptocurrency-ecosystem-13fb412d1e75
And you have a completely decentralised stablecoin that retains value as long as Ethereum is worth, well, anything.

Together, you have 1) A completely straightforward way to anonymise the movement of any token into any other token (or even into the same token) 2) A truly decentralised stablecoin to store value in.
The consequences of these two things are difficult to overstate. Realistically, the ONLY way to tax people for cryptocurrency behaviour will be to monitor transitions back to fiat. This is the situation that crypto fans have been supporting for ages, saying transitions to fiat should be subject to CGT and that's all. And even THIS limited framework will only work until properly functional crypto payment mechanisms at point of sale come online.
If I was running the ATO I would be fucking panicking right now.