European Countries Needing To Increase Their Revenues Need Bitcoiners

This is an opinion editorial by Holly Young, Ph.D., an active builder in the Portuguese Bitcoin community.Disclaimer: BTC Inc. is the parent company of the Bitcoin Conference.It was a real pleasure to watch Katie Ananina and Jessica Hodlr take the stage at the Bitcoin Amsterdam conference (not the least because minutes earlier, a journalist from the Financial Times had just sputtered out her contempt for the lack of women present at the conference). They did a wonderful job of explaining how states should be viewing their citizens, especially Bitcoiners. Source: BTC Inc. Judiciary arbitrage is a concept that is very relevant to Bitcoin communities. At the risk of being called arrogant, let me briefly explain why every country should want us and incentivize our travel to them. Yes, bitcoin is f*cking you money. It raises a single finger salute at The State in its most invasive and inappropriate form — The meddling State, The nanny State. The State that wants your freedom and dictate how you and your family live. There is a fundamental contradiction in this story. Despite what the legacy media says about Bitcoin (and, by implication, Bitcoiners), we are not all gun-toting psychopaths and terrorists. In fact, I have found that Bitcoiners are quite solid people. The majority of Bitcoiners I’ve met were socially engaged, family-oriented, and community-minded. They are smart and at the forefront of financial, social, and technical innovation. They are rich, curious, and idealistic in every sense. They are ready to make a difference and build a better world. They want to invest in the future, build businesses, and I would wager that a Bitcoiner contributes significantly more to his or her community, whether it is through innovation, investment, or general social engagement. This is cumulative: communities build neighborhoods, counties build counties, and countries build each other. You may wonder, “What jurisdiction could not want to welcome a community like this?” Jessica and Katie point out that jurisdictions should be actively competing to attract citizens of this calibre. Unfortunately, not all jurisdictions view it this way. The United States has issued warning shots to its Bitcoin citizens, including threats to levy tax on unrecognized capital gain. There are many examples of developing countries that see the potential Bitcoin offers, including El Salvador, the darling of Bitcoin community — but none have yet to emerge as a leader. Even El Salvador’s best efforts appear to have been hampered, at least temporarily by implementation and adoption problems. Europe has been dithering about Bitcoin. We saw it threaten to ban mining. As most of you know, banning mining in one country does not kill Bitcoin, as some lawmakers seem to believe. Instead, it sends miners (and with them energy, wealth, and a flourishing community), to more welcoming countries. This was evident on a large scale when China banned Bitcoin mining in 2017. This was much to the advantage of the U.S. where most of the mining power has migrated to. When it comes to the state’s attitude towards Bitcoin, tax laws and mining bans seem to be linked in an unholy alliance. Tax the sale of bitcoin, ban mining, and watch other jurisdictions profit from the influx of Bitcoin migrants. There is a large and growing Bitcoin community in Europe, and we are looking for a place to call home. In recent years, many European countries have proven their worth. The Netherlands, once a land of opportunity and trade, decided that Bitcoin was a net loss. They implemented strict regulations on Bitcoin companies, and a 30% capital gains taxes on bitcoin assets. Predictably, the Dutch Bitcoiners and Bitcoin businesses voted with their feet and fled the Netherlands in search of better laws. The Netherlands may be congratulating itself for this purging of bitcoiners. However, anyone with half an operating brain can see that it is a brain drain deluxe and has caused young innovators to flee the country. It is clear that those in Europe’s traditional financial power are less likely to be able to keep the throne regarding Bitcoin. With its long history of respecting finance and its discretion over identity, sources, and funds, Switzerland seems too stuck in the traces that the legacy finance system makes it unlikely that it will be a contender for the position. Although Brexit may have liberated the U.K. of the EU legislation quagmire, it may still be known as London’s financial hub. However, the shelf life of each politician there is currently shorter than that of a pot or yogurt. It would be foolish to build its foundations there right now. Portugal is not a financial hub, but I have written before about its advantages as a fertile ground for the founding of Bitcoin communities. Its visa procedures are relatively simple and there is no capital gains tax on bitcoin. This has led to a lot of Bitcoiners from all nationalities flocking to Portugal. Those of us who hold regular meetups have also seen our numbers grow very satisfyingly. Portugal faces a roadblock. Portugal is one of the EU’s poorest countries and has been heavily dependent on EU subsidies in recent years for various aspects of its capacity-building. Portugal is heavily dependent on tourism to boost its coffers. The euro has also brought in more tourists. It would be a huge ask for Portugal to defend its Bitcoin communities if the EU cracked down on Bitcoin in any general sense. Then there is the temptingly ripe fruit that is capital gains tax. Portugal proposed last week a new law to impose a capital gains tax on bitcoin. However, it was in a nuanced form. Bitcoin that has been held for over a year is still exempt from tax. This could be read in many ways. The cynic might argue that this is the end of the wedge, the first bite at the Bitcoin savings of those who have been drawn here in what could well be a classic bait and switch maneuver. Others will argue that this system rewards HODLers who keep their HODLing. It is a tax regime, but one that is lenient. It would be very easy for Portugal to impose a capital gains tax on Bitcoin, which would punish those who have emigrated to Portugal in order not to pay the currently generous taxes. Any such tax decisions would not increase the national coffers. Instead, the nascent Bitcoin communities that are flourishing here and taking root there would simply disappear, melt away, and we European Bitcoiners would pack our bags once more and set off to find the next Bitcoin haven. Portugal seems to be the best European country to grab this golden opportunity. Portugal has been the preferred destination for European and American Bitcoiners looking to escape more restrictive (and colder) jurisdictions for the past few years. Portugal can position itself as a safe place for Bitcoiners. This will attract more people to the country, enhancing the economy with innovation and investment, and contributing our skills and commitments to the country’s continued growth. Madeira, a Portuguese Island, declared its support for Bitcoin and welcomed Bitcoin businesses and communities at Bitcoin 2022. Will mainland Portugal follow Madeira’s lead? If jurisdictional arbitrage is viewed from the perspective the wealthy and innovative community that Bitcoiners form, countries should be queuing to advertise their merits. Portugal, what do you think it is? Which way, Western land! We European Bitcoiners are watching and waiting for the political tides. Holly Young contributed this guest post. These opinions are not necessarily those of BTC Inc.

 

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