So in North America for example (and I imagine a lot of other places are similar) 'selling' Bitcoin for fiat or government money... and 'spending' that Bitcoin are treated the same tax-wise.
To government 'spending' that Bitcoin with a vendor that takes Bitcoin directly... and 'selling' it for dollars/euro/yen to have fiat is taxable for 'capital gains'.
At what price did you 'acquire' the Bitcoin and at what 'price' did you part with it? And what's the difference? OK well you owe taxes on a % of the difference...
OK well how the **** does this work in a world with increasing Bitcoinization and adoption?
As demonstrated here on StackerNews lightning allows the sending and receiving of small amounts of money very quickly and cheaply. Basically 24/7 - 365 to anyone.
Imagine this scenario:
-
You dollar cost average into Bitcoin every day with an exchange - set it and forget it - let's say 10$.
-
You take a percentage of your income from your 9-to-5 job and it gets automatically deposited into Bitcoin when you get a paycheck.
-
If you have any spare cash you buy more Bitcoin with the exchange... or using peer-2-peer methods with friends or family. It's at random intervals and all paid to your lightning node.
-
You also exclusively use that same lightning node your self-hosted lightning node & channels to buy your groceries, put gas in your car and pay for online services - cloud storage, movies, Netflix, TV, a VPN maybe a newspaper etc. And this is addition to using NOSTR almost daily to send and receive Sats to other Bitcoiners.
While this is going on...
you receive sats on StackerNews for posts or comments... (a really sharp post may net over 10000 sats WoW!) You also generously zap other posts and comments with those same Sats because we're all Stackers here and using Bitcoin is fun.
Back to real life:
On the way to work (your 9-to-5) you buy yourself a coffee, paid over lightning of course, with your own lightning node and channel. All the while you continue to get a small number of Sats continuously over StackerNews and NOSTR. You also have a podcast and blog... and you get a few sats from those as well.
Using Bolt 12 (to come out next year on LND) you have subscriptions and recurring payments to OTHER podcasts and even Blogs you subscribe to. Pay by the minute, pay for the minutes, or even pay for the article it's your money it's faster and more instantaneous it's your money and it's sound.
That same day as the coffee and the DCA, and the recurring payments... you stop for gas and see your friend Joe from work and realize you owe him 20$ for gas (he gave you a ride the other day) and he takes lightning on his phone so you send him the Sats by scanning his QR code. You also buy yourself some gas to get your car filled up.
Work is the usual, and you're getting ready to leave when you realize... 'oh crap' this week is Mother's Day (!) and you didn't get your mom anything so you order her some flowers to be delivered in a few days (over lightning of course because the flower people want to take Lightning).
On the way home from work you check your phone and see your paycheck comes the next day (how could you forget?) where most of it goes to your Lightning Node (using invoices from Bolt 11 you approve) or possibly using Bolt 12 via QR code automatically. You check your phone - yup you could use those sats your channel is mostly empty buying flowers those flower people are Pirates!!
And you also remember you had set up with HR... so that eventually a paycheck goes to cold storage and is sent economically when the Cold UTXO is big enough (TX fees are around 30$). It gets withdrawn to your cold storage/long-term-savings. For the kids college of course years later.
After you get home you go out for an hour or 2 with the Mr or Mrs to get a glass of wine or beer at the local bar... paid from that same lightning channel you just got paid to from your job. You walk home (local bar) and are going to bed when you realize that your 10$ DCA is about to go through - you don't care what the 'price' is it's just money you use it everyday.
In the above example, which is technically possible today, your paycheck is paid directly to your lightning node, you pay many of your bills and expenses from your lightning node, you spend directly from that lightning node and you use lightning for micropayments frequently for online content. Bolt 12 allows for subscription payments or recurring payments... and once you have a channel set up you rarely have to touch on-chain. It just goes on in the background all the time.
Gas, groceries, small amounts of money to and from friends (owing friends for gas) all of it is instantaneous via lightning dozens if not hundreds of times a day.
Now back to 'capital gains'. In this possible future world... Bitcoin is far more greatly adopted and also a lot less volatile however the price continually changes throughout the day. Goes up or down just less.
If you have to track every time you 'received' Bitcoin, countless times throughout the day and every time you 'spent' Bitcoin, countless times through the day... to calculate capital gains you would need to know the exact exchange rate of each and every Bitcoin transaction! It would be NUTS! You could literally have dozens if not hundreds of transactions a day.
How the **** is that supposed to be practical? If my online magazine subscription renews every Sunday at 2 AM via lightning, I'm supposed to look back and check the exchange rate of Bitcoin at that time for the 11.99$ equivalent (just in SATS) and for when I 'acquired' that Bitcoin? What if I acquired it 2 years prior on StackerNews?
