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RE: Are we in a Cryptocurrency Bubble?
This is exactly the problem and you highlight it. Crypto is an island with no easy way in or out. If we want to change this, push for a reduction of taxes or exemption of taxes and then watch how fast people cash out into fiat. As it is right now though, there is no certainty in crypto and no easy way out of it even if it is a bubble.
Even if you have Bitcoin, if you spend it what are the tax implications for buying a pizza?
In NL at the moment no tax implications when using BTC or other altcoin.
Consider yourselves very fortunate that you aren't a US citizen then. Our tax structure is one of the most complicated and regressive in my opinion.
Ours in NL is also not that simple, but any complex tax system gives opportunities to establish a new business. I always look it from that point, the opportunities :)
This would be fine but the US IRS hasn't been very clear on what they want.
When US IRS is clear about it, would this not give the opportunity to automate this in the financial processing? An opportunity for an online accounting software for crypto currencies?
That is what we all want to happen and why it's so horrible that they aren't clear!
Cryptos need to start including commercial business using their coin. Specific type of businesses shall be targeted (through direct sales; not through mass market marketing) and the required technology and everything they require for them to onboard, shall be arranged. That is a way out IMHO.
The issue again is regulation. Even if commercial businesses accept or use the coin the regulations involved make it hard for holders of the coin to spend it particularly when the price has gone up. So the higher the price goes up, the less people want to spend because of taxes, and the corporations don't want to hold coins due to legal or regulatory risks, so how do you fix it so this changes?
Not all countries regulated virtual currencies yet, so run the operation from countries without regulations. Like in NL, no regulations around BTC and altcoins. In Germany some regulations around BTC, but not to difficult. I can even imagine the part that will work with the brands to be onboarded will be support in technical integration, process integration and may even get a service to handle the regulators and taxes for them wrt the altcoins. I truly believe propositions can be made that will attract the first innovative brands to eg Steemit. So far, none of the altcoins is creating these propositions. I would love to create and execute them, and now I'm in the process of finding out who is responsible for what and with whom I shall deal to bring eg Steemit to the next level through propositions and activities to bring brands (from small to large) to Steemit.
Spending coins could be spending it on promotion channels in Steemit. Spending could be re-distribution to the audience/followers through win games. Today Steemit is blogging service, so a marketing channel, hence 100% cost in terms of financials. On Steemit a brand can earn coins post/comments, and can burn them by promotion and/or give aways. Coins can also be used to pay a fee to be allowed to use Steemit as a channel, or at least to pay for the specific technology, features, interfaces, integration that will be different from segment to segment.