1 min read

Red tape

Blockchain makes it possible to skip a lot of your country's regulations, but you probably shouldn't.

America makes it relatively easy to start and operate a business. Despite that, there are still extensive legal hoops to jump through for forming your business, paying taxes, hiring employees, listing on the stock market, and many other common tasks. There's an entire industry of businesses that exist solely to make these things easier for other businesses.

You can skip most of these steps, but you'll be paying a higher tax rate and won't be able to raise investor funding or list on the stock market. For a lot of business owners, that's fine. The simplicity makes it the obvious option.

Blockchain allows you to raise funds without the extra red tape. You could launch a token without dealing with a single bureaucratic process.

The problem is dealing with the taxes. If you sell any of the crypto you raised and start spending it, the tax man will eventually notice. For most people, it's worth it to go through their country's regulations. At least this way, you can enjoy the benefits of your labor without breaking any laws.

Crypto could be used to topple countries. If every citizen used crypto exclusively without ever converting back to their local currency, the government would have no ability to exact taxes from its people.

This is a valid strategy for overthrowing evil dictators, but it requires cooperation among citizens. You'd have to be careful who you did business with do you don't expose your on-chain identity to the government.

For most of us, it's better to cooperate with our governments.


P.S. If you don't like the rules, you can always move to a more crypto-friendly country.