1. The obvious, that they are collecting funds on behalf of other people's work and then keeping them when the funds go 'unclaimed'
2. Even if you do want to claim it, they don't make it easy, and for someone in a complicated tax country (like the author, Austria) there is almost no way he could accept the money without incurring some kind of risk. So basically when they are keeping money that goes unclaimed it's very problematic because they don't make the money easy to claim in the first place. Obvious incentives issues.
Point 2 is what this article is about.
The author seems to believe he cannot accept tips, because of tax and regulation, but he doesn't point out what specifically would cause problems here. Obviously people make and accept tips using euros all the time, this is not illegal, so why it would be different using Bitcoin isn't obvious. You can declare tips as income, no problem.
The real cause of his discomfort is revealed later in the post:
Personally I believe that Bitcoin is a terrible currency ... If you have a completely broken piece of country then I can imagine that you are suspicious of regulation and this sort of thing, but for me regulation is what keeps my world running and working.
Also,
Bitcoin for me feels like a cult. The vocal people in the community seem like they don't actually care about Bitcoin, but they want to see it succeed so that their "investment" makes a profit
So he has a generalised feeling that Bitcoin is bad because it's popular and has vocal fans, and that regulation is good yet also complicated, so anything which seems simple must be unregulated and therefore bad.
I do not consider myself particularly libertarian, though I do use and work on Bitcoin. Regardless, this doesn't seem like a great set of arguments. Rather, the author has decided that because a lot of Bitcoin users don't seem to like government, and he likes government, he should not like Bitcoin.
JFTR: "accepting tips" for software is something that is not at all straightforward. The way bountysource and others get around that is through invoices once a large enough amount has accumulated. I have no idea how that works in other countries. Gratipay/bountysource solve this problem, no bitcoin service I have seen does.
> Rather, the author has decided that because a lot of Bitcoin users don't seem to like government, and he likes government, he should not like Bitcoin.
I think you misunderstand something there: I am pointing out why Bitcoin is something that does not solve problems for me and I doubt I am the only one. The premise of tip4commit is that it helps Open Source projects. It's not just not helping me, it's making my life more complicated. In fact, right now, pretty much anything that has bitcoin involved makes it harder for me.
I'm in the US, not Austria, but from what little I've seen of even the US's legal and tax system, doing something with money that you don't fully understand is a risk. I am glad that there are people who are willing to take that risk in the name of improving society, and pioneer the use of Bitcoin and other alternative currencies.
But nobody should be obligated to take that risk if they don't want to. I would be completely unsurprised if some emergent behavior between the US tax code and other laws meant that if you were merely aware of people accepting tips on your behalf using your name, even if you didn't ask them to, there are tax or legal obligations. I would be completely unsurprised if the law says, if you ask them to stop and they don't, you're _obligated_ to initiate legal process to make them stop. I don't think the law says that, but it's certainly way less crazy than lots of funny corners of US tax and commerce law.
I would also be completely unsurprised if US tax code got complicated when you're accepting Bitcoin as payment. I'm dimly aware that the IRS or FinCEN or someone issued guidance recently that Bitcoin doesn't count as a currency but instead counts as a something-else... and not being a cryptocurrency user, I haven't bothered to learn what that something-else is and how you're supposed to report taxes on it.
If someone is willing to figure out how the law works, or pay their lawyer to, more power to them. But nobody should be _obligated_ to.
I agree that Bitcoin is more or less irrelevant to the controversy, but like the OP says, the tip4commit defenders seem to have intentionally made it a pro/anti-Bitcoin conflict. Bitcoin advocates were mobilized to support the site.
I should think that would be pretty obvious. Go ahead and try collecting regular currency for a charity of your choice without ever getting sign off from that charity and only ever giving them the proceeds if they ask. It will end very badly for you.
> You can declare tips as income, no problem.
No, there are a lot of potential problems that stem from this. In particular, it raises lots of flags about whether those tips are accurate, whether it is some form of money laundering, and whether they are really tips or something more nefarious. Unlike in the US, in a lot of other 1st world countries, handling taxes is incredibly straightforward (less than an hour of your time a year and zero risk of liability), but once you throw tips in to the equation now it's as difficult as it is for many people in the US.
> So he has a generalised feeling that Bitcoin is bad because it's popular and has vocal fans, and that regulation is good yet also complicated, so anything which seems simple must be unregulated and therefore bad.
No, he's pointing out that its vocal fans have a distorted perspective and often don't really buy in to its virtues... but those problems are not why Bitcoin is a terrible currency.
That's not what he said. He said that he doesn't want to deal with a system for accepting tips if the cost to him of the system (not just in money but in time and effort) is greater than the benefit. He mentioned two tipping systems (gratipay and bountysource) that, to him, don't have this problem.
As a general rule, if anyone tells me "but taxes aren't complicated" or "but what's the complication", I know they are talking from ideals and not experience.
The Federal US tax code, last time I looked at it (2009) was over 71,000 pages (add a few more thousands per state). It doesn't get shorter with time. Of those, "only" 20,000 or so apply to every individual (not the same 20,000). Other countries are better, but the shortest country tax code I've had the pleasure (?) of dealing with was only 4,000 pages of printed text.
Intrastate/intracountry transactions are usually complicated, but somewhat tractable. Cross-border transactions are usually ill-specified, can be classified in multitude of ways all technically legal - and yet, if the tax authorities in either country things you've done it wrong, you are assumed guilty until proven innocent.
Anyone who is not scared of the tax code has not had to wrestle it. You may win some battles after working hard. But you never want to go into this war.
The only (or at least, the main) argument we ever hear in favor of Bitcoin is that it's unregulated, and therefore it's liked by people who dislike regulation. Why, then, is it surprising or illogical for someone to dislike Bitcoin because they're in favor of regulation? Being in favor, or against, regulation is a matter of personal political opinion, and that, in turn, shapes one's opinion of Bitcoin. This argument makes just as much sense as those for Bitcoin.
The tip4commit people are clearly putting growth of their product above everything else, and that's generously assuming honorable intentions on their part. I couldn't see any clear strategy for getting money back to the original donors if a developer or project does not end up claiming the donation.
Your problem has little to do with Bitcoin and all to do with the fact that a bunch of guys signed you up to their payment service without your consent.
The jurisdiction of almost any country besides the US in terms of what happens online is almost nil. I don't see the recourse an Austrian would take against an online tip service in China or South Africa that spams them with tip notifications.
Here's some other things without which it wouldn't have been possible:
- the internet
- computers
- life on planet Earth
Not to mention I've heard stories of developers whose motivation to work on open-source projects has gone _down_ since getting paid, since it makes it seem like work instead of a hobby.
There is a worldview that seems to me to be prevalent in the cryptocurrency community (I don't know which direction causation runs, but there's certainly a bit of correlation) that everyone wants micropayments and microtips -- cf. the tip bots on Reddit. It's not uncommon to see the tipbots get downvoted, and the tippers to be completely confused why someone might think it unwanted or off-topic. http://www.reddit.com/r/dogecoin/comments/234ds8/tipping_in_...
FWIW, Canadians are about 2% of Tarsnap's customer base by revenue. This is a bit less than proportional by population, but not much; the USA is about 40% of Tarsnap's revenue, but that includes several large startups (like Stripe) and Canada is distinctly lacking in similar.
The extra 2% is probably worth doing the sales tax paperwork for... but only barely.
I am having trouble finding a good link, but I believe this effect is well documented in several areas – where compensating someone for an activity winds up with them being less likely to do it.
http://danariely.com/the-books/excerpted-from-chapter-4-%E2%...
If some "pay for open source work" scheme got github level popular it would completely destroy open source for a long time. Right now there is more work being done than the community could pay for. But at the same time, it's handy to use bribes to get some necessary but boring stuff done.
The reason I bring this up is because our taxes are very high, but I get something for that money. It might not be the perfect system and there are lots of things about it that make me furious, but I do not see a reason why I would want to stop paying taxes.
That must be one heck of a feeling. Gives me hope for the future.
I hate the politics of my country (the UK) but it's not like I think stopping paying taxes would be a good idea. They cover roads, a social safety net, the nhs and so much else.
And I'm not exactly left wing.
He says he "doesn't want to be educated about bitcoin" because "he's heard all the arguments", while at the same time claiming it's a "terrible currency (or not a currency at all)" without any further reasoning.
This poor guy needs to be educated if he thinks that avoiding taxes, regulations, and credit card fees are the only applications.
Common decency dictates that if you openly state you are unwilling to learn about something, you should refrain from posting opinionated articles about that thing.
I think he very clearly understands all the applications. The point is that _for his case_ it doesn't provide any value, and he believes in a lot of cases its drawbacks outweigh its advantages (which is an entirely arguably point).
> Common decency dictates that if you openly state you are unwilling to learn about something, you should refrain from posting opinionated articles about that thing.
Again, I think you misread the article. It isn't that he is unwilling to learn something. He's learned a great deal and concluded that it makes his life more difficult. More importantly, he's pointed out a significant problem with it: there are a lot of things that can happen with Bitcoin that would otherwise be prevented and you'd want them to be prevented.
Really? And what are you basing that opinion off of exactly?
The only applications he mentions in his post relate to taxes and credit card fees. If he had any understanding of the other uses like multiparty transactions, timestamping, identity management, voting, derivatives, and trustfree contracts, then he failed to say anything to convey that awareness in his writing.
> Again, I think you misread the article. It isn't that he is unwilling to learn something. He's learned a great deal and concluded that it makes his life more difficult.
I didn't misread anything. Rather, he miswrote by conflating his opinions of a single bitcoin service with the entire underlying protocol.
1) That they collect a 1% service fee on donations.
2) That they donate 1% of a project's pool for any given committer, which leads to this exponential decay where they never quite have 0 balance for any given project.
If enough donors use tip4commit, that is potentially a lot of bitcoin pennies that is just sloshing around their server.
4) donors are not informed that the projects they're supporting may not receive or accept donations this way
5) donors are actively lied to, see:
https://tip4commit.com/github/django/django
and
https://news.ycombinator.com/item?id=8545377
has a django rep trying to opt them out of the program, there is no ambiguity whether they like, let alone want to or will receive donations this way
I recall reading that they have 55 BTC "sloshing around their server" at the moment (no easy way of checking this on their website but seems reasonable looking at the top projects' funds).
By todays exchange rate, that's 18k USD, which is being handled with very little actual transparency. It is a genuine risk that the people behind this project will run away with 18k$ worth of BTC (or claim they were hacked).
I don't like this idea very much and I certainly would not like my projects to be up there.
Im into Bitcoin, and I agree with this view. Most specially the reddit based bitcoin community.
On the other hand, if the donation is big (say in the thousands USD), I can see why someone could decide to not accept the donation because they don't wan to report it on their taxes. An easy solution to this problem is to NOT TAKE THE DONATION. If you don't take the money, you don't have to report anything. The tip4commit site supposedly states if a developer doesn't accept a donation the money goes back to the 'project pool' where it will get donated to another developer on that project.
So tip4commit is being dishonest -- if the project has said that none of their contributors will ever accept a tip it is dishonest to continue accepting contributions for that project.
The confidence in understanding the intricacies of tax law in the world's 196 different countries (many of which have intranational differences in the tax code) exceeds that of any tax attorney I've ever spoken with.
While I have no qualm about his desire to avoid tip4commit, I find the mention of "unregulated space" peculiar. It seems that he is worried, and probably prudently so, about the fact that this space is highly regulated, not that it is unregulated.
Maybe not exactly what Armin described as a solution - but did you already check Flattr (https://flattr.com/)? This also might work for supporting OpenSource projects.
