I think all these economists, panicking over fraud potential, or loss of national exchequer money tracking, etc, of blockchain based counter-currencies are completely missing the point of where the true threat of blockchain based distributed ledgers lies.



I'm not an economist, just a coder, so this, my simplistic, village idiot perspective is rather long and tedious, but bear with me please, because I would love to hear of reasons that stop my prediction from coming about.



Let me start at the beginning. In the beginning, was The Trade. You know, Barter. An exchange of goods and/or services, of nominally equal value between parties. And then, humanity starts superimposing layers of abstraction over The Trade. Money. And Banks. Debt. And every more complicated, Stocks. And derivatives of stocks. And of money, debt and other things too. And derivatives of derivatives....

Then, along comes the Biggie. The Lord of All Abstraction. The ten-ton gorilla that sweeps everything else off the table, jumps on it, lets out a primal scream of triumphalist rage while beating it's chest: **** SOFTWARE ****.



With software, all previous abstractions over trade come full circle and are obviated. And the 30-meter shark lurking just under the surface of blockchain based counter-currencies is: Taxation. The problem is the platforms that will now start to form, which will bypass taxation altogether and threaten the very notion of modern Nationhood. It is commercial platforms that will utilize blockchain based ledgers to industrialise Barter. Let me try and explain this. If you use a window cleaner, their invoice for work provides the insertion point for tax and a means of tracking money-flows. Now suppose your neighbor who's a window cleaner, offers to do your windows in exchange for you washing their car - Barter - two nominal value invoices, netted off, no tax for the government, no redistribution possible. Because nothing can prevent the two parties from offering a 100% discount to each other, once a private agreement of an equivalent-value exchange has been agreed between the parties. Now imagine Tech platforms that facilitate this on an industrial scale, managing not just simple two-party transactions, but multi-partite, and temporally and geographically spread out. Because blockchain based distributed ledgers will excel at precisely this. Another example comes from the world of mobile companies. These don't exchange invoices with the providers of mobile services for overseas users who have hooked into their services, two invoices each with each, for all providers across the globe. Instead call times are netted off, and a single, much smaller value invoice of the balance is all that is produced - clearly very tax advantageous. And of course, the bulk of the "work" bartered like this in the future will be being done not by humans, but machines: software and automation.



How would national governments track any of this to generate tax?