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Dilution and its discontents: Quantifying the overtaxation of block rewards
Newly created cryptocurrency tokens dilute the holdings of existing token owners. If block rewards are taxable income at their fair market value at the time acquired, token holders’ income will...
Estimating Bitcoin Electricity Use: A Beginner’s Guide
The rapid emergence of Bitcoin and other cryptocurrencies has taken many in the energy sector by surprise. This report summarizes complexities and pitfalls in analyzing the electricity demand of new...
A Duty to Answer: Six Basic Questions and Recommendations for the IRS on Crypto Taxes
U.S. taxpayers lack answers to basic questions about the federal tax and reporting effects of transactions involving cryptocurrencies. Although the Internal Revenue Service has been examining issues related to the...
Electronic Cash, Decentralized Exchange, and the Constitution
Regulators, law enforcement, and the general public have come to expect that cryptocurrency transactions will leave a public record on a blockchain, and that most cryptocurrency exchanges will take place...
Cash is more than a method of payment. It is a fundamental tool for individual privacy and autonomy, and it is necessary for an open society. This paper shows that...
Framework for Securities Regulation of Cryptocurrencies
This report, originally published in 2016 and updated in 2018, presents a framework for securities regulation of cryptocurrencies— e.g. Bitcoin and derivative projects or “alt-coins.” The framework is based on the...
The Need for a Federal Alternative to State Money Transmission Licensing
The several states rather than the federal government are the primary regulators of money transmitters. State-by-state money transmission licensing is inefficient because transmitters provide a networked good that inherently crosses...
The Bank Secrecy Act, Cryptocurrencies, and New Tokens: What is Known and What Remains Ambiguous
This report summarizes how various activities performed with cryptocurrencies and similar tokens have thus far been characterized by FinCEN and other authorities for the purposes of determining the compliance obligations...
State Digital Currency Principles and Framework
States have begun to look at how virtual currencies, such as Bitcoin, and the businesses that utilize them to provide consumer products, interact with money transmission and consumer protection policy....
Open Matters: Why Permissionless Blockchains are Essential to the Future of the Internet
This report offers a non-technical but thorough explanation of “blockchain technology” with a focus on the key variables within consensus mechanism design that differentiate so-called permissioned or closed and permissionless...