Congress Loves Cryptocurrency

By Mason Mohon | @mohonofficial

Crypto FOMO hits everyone every once and a while. It hit me when Bitcoin Cash was added to coinbase (I didn’t buy, thank god), and it just hit the United States Congress.

The 2018 Joint Economic Report holds a tasty bit and a sliver of hope for those looking to expand the crypto empire everywhere (skip to page 202).

It compares the buzz of the blockchain to that of the internet in the 90’s. The geekiness of it, the new platform promulgated by the early adopters, and the space for an entrepreneurial spirit let this ring phenomenally true.

It goes on to describe how blockchain and Bitcoin work, paying accurate homage the tech.

The report even acknowledges one of the most profound potentials:

Its initial application as a payment medium prompted questions about whether it might replace national currencies and challenge the U.S. dollar

This realization is enough to throw up hands in victory! The United States government acknowledges the potential. Yet, it doubles down on the fact that it is still iffy:

Former Federal Reserve Chair Janet Yellen considered Bitcoin a “highly speculative asset” that is not considered legal tender. Bitcoin itself has technical and economic limitations that hinder its use as a medium of exchange. Transaction processing time and fees on the Bitcoin network keep increasing and render Bitcoin uneconomical for common purchases.

Sure, Bitcoin has some issues as a currency. That is what free-market competition is for. Put your trust in the market, choose wisely as a consumer, and you will soon learn what currency is right for your needs.

On the potential death of fiat:

Some critics of currencies controlled by government fiat welcome cryptocurrencies because their supply is preprogrammed and perceived as unchangeable.For example, only 21 million bitcoins will ever be issued and the last fraction of a bitcoin will be issued in approximately 2140.

On Initial Coin Offerings:

An ICO allows developers to raise funds for a project by issuing tokens to use on that project. For example, if a group of economists wants to exchange papers, research, analysis, and review or editing services, developers would create an online platform to allow each person to have an account for 209 conducting these activities.

And on smart contracts as a new arbitration method:

While smart contracts might sound new, the concept is rooted in basic contract law. Usually the judicial system adjudicates contractual disputes and enforces terms, but it is also common to have another arbitration method, especially for international transactions. With smart contracts, a program enforces the contract built into the code.

The revolutionary power of blockchain is not going to be held back, and even the government knows it.

Blockchain technology offers a decentralized, secure, and efficient way to store almost any form of data across multiple platforms. Developers, companies, and governments recognize the potential and have already starting to implement blockchains for many different uses. For instance, health care providers, patients, and policymakers continue searching for portable and secure ways to store medical records digitally.

The report goes on to touch on Coinbase and MtGox, realizing a few setbacks in the history of cryptocurrency. It discusses taxing crypto as compared to taxing currencies versus taxing property:

Bitcoin’s rise introduced an ever-growing question about how these assets should be taxed. For example, dollar fluctuations are not taxed. If a person held cash for a number of years and the purchasing power went up relative to other currencies, the appreciation would not be considered taxable if the dollar is later exchanged for foreign currency. However, the tax code treats foreign currency as property rather than currency.

There are various regulatory questions it poses because we are dealing with a new ecosystem. After the conclusion, it urges policymakers to become aware of the blockchain when acting, and for regulators and entrepreneurs to work hand-in-hand and get the most out of this creation.

The government may be turning in a favorable direction, which is a good sign, seeing as that many cryptocurrencies are building back up from a long-lasting dip.

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