Ok, maybe no arithmetic ?

But let’s try and eliminate “zero” from existence except at the origin. Say there exists only “one true zero.” Then operate and prove using “counterfeit zeros” e.g. all the other zeros except at the origin that infinity and all forms of infinity to not exist.

Wow!

Warning!!! Mom told me not to talk about sex, politics, or religion. Hmm ….

Well, on blogs, maybe don’t talk about arithmetic!!! 🙂

Arithmetic with scientific notation — even worse! :-)!

“The best people don’t talk about sex, politics, religion, arithmetic, or scientific notation.”!! 🙂

Mathematical proofs! HORRORS!!!

Arithmetic and math are such insensitive, unfeeling, non-sympathetic, etc. bludgeons that make all the nice snowflakes run to their safe spaces!!!

So, more PC to keep us from viewing reality?

You’ve left out the outlier. The manufacturer of some of McDonald’s packaging could grab them by the balls and design something they want and convince them to buy it in bitcoin.

Basically what you said seems okay to me except for just ‘scale’:

Or Google search

annual revenue McDonald’s restaurant

shows that the average gross revenue per McDonald’s restaurant is $2.6 million a year.

From whatever understanding I have of US small and medium business, a lot of the houses in nicer neighborhoods, full tuitions at private schools and colleges, 30 foot pleasure boats, luxury SUVs, etc., are from entrepreneurs who own and operate several such retail businesses — McDonald’s, pizza carryouts, gas stations with convenience stores attached, etc.

So, suppose some guy runs a dozen McDonald’s. So, that’s monthly revenue of, right, the $2.6 million.

He needs to deposit this revenue in a local bank so that he can pay employees, various taxes, rent, suppliers, maintenance services, insurance, legal, etc. I suspect that each quarter his accountant will want to see his bank statements, bills, etc., and the IRS will want to see at least the summaries they have in mind unless the IRS wants to do an audit at which time likely they will want to see much more.

Now essentially all this $2.6 million a month is just from what the restaurants received at their point of sale terminals, that is, metal coins, green folding money, or credit card payments, and all of that is denominated in US dollars.

Then, if a lot of that $2.6 million is denominated in Bitcoin, likely US banking regulations will cause his bank not to accept the Bitcoin money as a deposits; his accountant and the IRS will be bigly unhappy, etc.

Maybe he could accept Bitcoin for a little of his revenue, say, $1000 a month, and use it to pay his local independent auto mechanic for, say, detailing of his wife’s luxury SUV or four new tires for the SUV’s full-time four wheel drive, etc. So, there could be something of a small scale, underground, Bitcoin economy — IIRC there is now a relatively small scale all cash economy. Some examples are front yard lemonade stands, teenage boys getting paid for grass mowing or leaf raking, a plumber who comes at 2 AM to unstop a plugged up toilet, etc.

Sure, for $1000 or so a month, the McDonald’s restaurant entrepreneur could accept Bitcoin, but the $1000 a month is small potatoes compared with the $2.6 million. Besides, if the $1000 a month in Bitcoin is not properly reported, recorded on the point of sale terminals, etc., then he can be in legal trouble.

That is, it has occurred to 99 44/100% of such retail entrepreneurs that really they could take much of the green cash revenue, stuff it into their pocket, and use it, say, for dinners and tips at high end restaurants, for him, his wife, and another couple as guests, with wines, $1000 an evening, all in cash. Yup, and such occurs to the tax collection people of the IRS and local governments, etc. Doing very much of that can lead to IRS audits.

And I have to believe that such an entrepreneur might get approached by a dealer in illegal drugs who has $1 million a month in green cash as drug revenue. So, the drug dealer gives the restaurant entrepreneur, say, $200,000 a month in green cash that the entrepreneur just combines with his restaurant cash revenue and deposits in his bank account. Then with that $200,000 in the banking system, the entrepreneur writes the drug dealer a check on his bank account for, say, $160,000, that is, 80% (I don’t know a realistic figure) of the $200,000. That is, the restaurant entrepreneur gets paid $20,000 for his trouble.

Then the drug dealer has a check for $180,000 he can deposit in the usual financial system and can use to buy, from a high end dealer, a new sports car for himself. The entrepreneur tells his accountant, wink, wink, that the check for $180,000 was for some business strategy consulting services so is an ordinary business expense paid from ordinary pre-tax revenue.

The accountant and the banker, not being extremely stupid, might drop a dime into a phone booth (or would have when there still were phone booths) and call the local FBI, IRS, etc. about suspicious money movement.

IIRC, such moving cash around is called money laundering and is quite illegal.

For the entrepreneur, there are some big risks:

(1) The drug dealer has evidence the entrepreneur violated the law that he, the drug dealers, might be able to use to his advantage if the FBI gives him an interview invitation offer he can’t refuse.

(2) If the amounts of money the entrepreneur is making, the 20% above, is small, then he is taking a big legal risk for a small gain.

(3) If the amounts of money the entrepreneur is making, the 20%, is large, then his accountant and banker are almost sure to notice and drop that dime.

For the cash for that $1000 dinner, the entrepreneur could just take that as green cash out of the gross revenue of the restaurant. Maybe we are supposed to call this skimming.

But, such skimming is illegal, and an audit of the cash register receipts might detect the fraud. E.g., if a small retail business accepts your cash but does not ring the cash register or give you a receipt, then they may be executing fraud.

So, apparently for such retail businesses, there is a general principle: If the amount skimmed are small, then there is a small financial gain and a small chance of getting caught with a big legal problem.

If the amount skimmed is large, then the chances of getting caught rise a lot.

So, amount small or large, the fraud is either not worth the risk or much too risky.

There may be an easier way to cheat the tax man: Say the pizza shop entrepreneur wants a nice new iPhone for his wife. So, since maybe an iPhone can look like a legitimate business expense for the business, he has the business buy the iPhone, that is, as an ordinary business expense from pre-tax revenue (if he doesn’t have to capitalize the expenditure and depreciate the iPhone) and, then, just take the iPhone home and give it to his wife.

If at his business he gets a really severe audit, then he just claims that he lost the iPhone.

If the IRS asks too many questions, then, wonder of wonders, suddenly the iPhone is found and at the pizza shop taking carry out orders as intended!

Maybe the pizza shop has several high end customers who order two dozen pizzas each Friday for their Friday afternoon pizza bash to start the weekend. Well, for such customers, the entrepreneur would like some thank you gifts. These can be of great variety, Steuben glass, spiral sliced honey based ham, smoked, roast turkey, sapphire earrings for the wives, some cut glass orange juice glasses from Tiffany’s, iPhones, Apple Mac computers, a high end Nikon digital camera with a big set of lenses, a snow blower, an emergency electric generator, a chain saw, a 3/8″ rechargeable electric drill with a full set of drill bits for wood and metal, etc. Well, some of these gift items might end up in the home of the entrepreneur, e.g., for his wife and children, in his basement work shop, etc. Such things have been known to happen. The tax advantage is that the money is ordinary business expenses from pre-tax revenue.

More generally, a business owner can have his business pay for products/services that end up at his house instead of the business and likely get away with it. E.g., his wife and daughter want to use some graphics software, a high end HP color printer, and some really nice paper to make Christmas cards. Well, the HP ink cartridges and the paper might have been bought by the business but carried home in part or in total.

Hmm, his daughter wants to get married in the back yard of the house in the all white, Victorian, octagonal gazebo except so far there is no gazebo there! So, a carpenter gets hired, paid for by pizza shop pre-tax revenue, to do some renovations of the pizza shop, and presto, bingo, the daughter’s dream gazebo appears like magic!

Similarly for nice winter vacations to Florida for his wife and himself if, say, they also make a stop at a convention of such business owners.

I’m sure the IRS knows much more but is willing to put up with some level of such cheating before investing in an expensive investigation and legal case.

Fact of life: There is some small scale cheating in the US economy.

Net, if Bitcoin is used for some small scale cheating, then maybe people will be able to get away with it. But for large scale cheating, say, $500,000 a month, I have to believe that, with tips from the accountant and banker, the IRS will descend like an American Bald Eagle on a beaver kit caught in the open.

From that broad situation, to me, in the major world countries, Bitcoin looks like it will never be more than small potatoes and limited to special purposes often in shady situations.

Precisely that dollar/cash hyper regulation could lead to a wider bitcoin/digital currencies adoption. In many countries in Europe we are already forbidden to make payments above 1000 EUR in cash and bank alternatives don’t always work well (reasonably priced electronic transfers take one day to clear, checks may not have funds, bank guaranteed checks are expensive).

You are right that some governments could try to regulate it, but doing so in an effective way is not easy or even possible. Moreso, if they managed to, I still think it would have advantages for many people, not just criminals. The dollar is the preferred currency for terrorists and drug dealers around the world, it is over regulated… and yet people still use it.

I don’t know, maybe I’m just naive, but I don’t see that full prohibition scenario as really feasible. I guess time will tell!

Here is a shorter explanation why I am skeptical that Bitcoin or any similar digital currency will have much of a future:

Bitcoin and similar digital currencies are attractive for illegal activities, e.g., money laundering, funding terrorism, the illegal drug industry.

As we have already seen from the war on drugs and the war on terrorism, for the dollar, the US has made big efforts to have nearly all dollars held in accounts in banks that are highly regulated. E.g., the cash economy is highly regulated since any deposit/withdrawal of $10,000 or more to/from a regulated bank results in a report to the US Federal Government.

So, if digital currencies get too active for illegal activities, then we can expect that conversion of large amounts to/from dollars will be made illegal and difficult. E.g., going between Bitcoin and money in Citi, Morgan-Chase, a brokerage account, a mutual fund, etc. will be difficult.

The IRS might tell US businesses that they have to be paid in dollars, nothing else, not milk bottle caps, gold bullion, Cracker Jacks toys, secret decoder rings, Monopoly money, bottles of laundry detergent, packages of cigarettes, or digital currencies.

It is going to be fairly short term as the regulators and the sovereign
nations are going to enforce their money laundering and other laws.

Yup.

The bitcoin trade got a bit interesting this week, no? Probably just a healthy correction — for now. I guess that the Chinese speculators are all over bitcoin and maybe that’s why the trade got a bit too crowded…

.
When VCs talk their book and get stuck on the same page, watch out.

I see bitcoin as only a trade in the context of digital gold. Still waiting for a “killer app.” It may turn out that bitcoin itself is the only app, killer or otherwise.

It is going to be fairly short term as the regulators and the sovereign nations are going to enforce their money laundering and other laws.

As I said, there is a huge amount of brainpower focused on this and they should be creating some results.

Be well.

BRC
http://www.themusingsofthebigredcar.com

Pro tip: When you start to hear about dentists recommending bitcoin to
their patients as a prudent investment, GET OUT! It will happen.

Is there a corollary to this? As in ‘when VC’s continue to drone on about the potential and/or encourage discussion around the subject’ how close are we to collapse? Continue to try to drum up new interest to replace the waning interest (ponzi).