Nostr Web Client

No I understand what you’re saying. I guess I’m approaching it from the idea that it’s more than likely a novelty in the beginning, you won’t have a lot of sales, and the inventory costs would be covered by the gross profit of the other items. This would allow the store owner the ability to “bank” the sats for future use therefore converting cash to the “harder” asset of sats.

It certainly easier for a service business to get to a bitcoin standard since most service business revenue is “self generated “ and therefore has very little cost.

But the idea still stands, the collection of bitcoin for a good or service would generate ordinary income , creates a basis for a future sale, and the future sale would generate a capital gains tax or benefit based on the holding period.

Tony Carrera 1y ago

Yes from that angle I would agree, just to help the network. I would consider it for sure. In my case, we provide lighting design services (layouts, consultations, photometrics, heatmaps, etc.) and accepting for these services is a no brainer. A few months ago I posted if anyone was interested but had no takers. Could try again in the future, would be a great experience!

The tax laws have to change for it to truly become a medium of exchange.

At the moment, if the goal is to accumulate BTC it’s probably easier to just use some fiat profits and buy BTC directly and hold on the balance sheet. A tiny $MSTR if you will.

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Discussion

Chriso🇺🇸🇦🇺🦘⚡️ 1y ago

I think the real challenge is to get people to spend it. I can see Lightning payments replacing cc’s.

From the stand point of just buying vs selling a good or service, i would argue that it’s marginally cheaper than buying since you’re getting the gross profit as a markup. For instance, I’m swapping a $50 (cost) lamp that is sold for $100 in Bitcoin. Yes there’s a tax cost to account for but it should still be better if you can get people to spend their Bitcoin.

Good conversations, maybe someone reads and gets inspired. 🤝

Tony Carrera 1y ago

The problem with any transaction (on-chain, lightning, or other layers) is we go back to the same taxable event.

I buy a cup of coffee with lightning or liquid and it’s a taxable event.

Maybe a bill gets passed waiving transactions less than $10K (or w/e is reasonable) per year from being taxed. That would be insanely positive. Ideally no limits but not holding my breath.

What would be cool, and maybe you know if this exists or not, is having a lightning wallet that smash buys BTC/lightning at the same moment you make the purchase. Only downside is you need a bank account to fund the purchase with fiat unless there’s some other way to do it. I thought about this a few years ago. Vendor still has the same issue though.

For example, I walk into a coffee shop and order a cold brew and we scan the lightning invoice for 8,000 sats (approx $5). The lightning wallet immediately buys the equivalent amount of lightning/BTC resulting in no taxable event for the user since there was no cap gain or loss (bought and sold for the same price). I’m ignoring fees but maybe the wallet can charge a flat subscription fee instead of a service charge/fee per transaction to truly be a no tax event.

Are you a developer? Let’s work on this! Haha

Chriso🇺🇸🇦🇺🦘⚡️ 1y ago

Strike has the ability to do exactly this. Basically you’d have fiat funds in your wallet and pay lightning invoices with it. I’ve never done it that way though. Jack Mallers talks about it in some videos to combat this exact problem.

Tony Carrera 1y ago

Oh man, wasn’t aware of this. Could be a game changer if that’s how it works. It makes sense if you have fiat in the wallet. I hope nostr:npub1cn4t4cd78nm900qc2hhqte5aa8c9njm6qkfzw95tszufwcwtcnsq7g3vle can confirm?

If it truly avoids the tax event adoption I would for sure choose to pay with lightning just to support the network. Honestly, even a little easier. Though CC’s do have the buyer protection feature in case vendor is a jerk… can’t 1-800-Bitcoin for a dispute lol

Chriso🇺🇸🇦🇺🦘⚡️ 1y ago

From what I recall from the video nostr:npub1cn4t4cd78nm900qc2hhqte5aa8c9njm6qkfzw95tszufwcwtcnsq7g3vle published, the idea is when you use fiat and pay via lightning, the nostr:npub1ex7mdykw786qxvmtuls208uyxmn0hse95rfwsarvfde5yg6wy7jq6qvyt9 app makes the purchase and simultaneously sends the payment via lightning so essentially your buying and selling at the same time. I’m sure he or someone at Strike will confirm this for us.

Tony Carrera 1y ago

Yea that’s exactly, what I was thinking. If that’s how it works, they should definitely make a bigger deal about it.

Vendors still have the same issue we discussed previously though, I wonder if strike allows businesses to accept in a similar fashion as bitpay (choose how much to allocate into fiat/btc from a lightning or on-chain payment)?

Chriso🇺🇸🇦🇺🦘⚡️ 1y ago

I recently learned about a Strike plugin for nostr:npub155m2k8ml8sqn8w4dhh689vdv0t2twa8dgvkpnzfggxf4wfughjsq2cdcvg . From what I read, it will automatically convert the BTC to cash when you use it. I could be wrong on that but that’s the feeling I got. If that’s the case, I don’t really see much use for it here in the USA but maybe it is beneficial in other countries.

I think for anything of real significance, BTCPayserver is the way to go. I think Square also has integration with nostr:npub1xnf02f60r9v0e5kty33a404dm79zr7z2eepyrk5gsq3m7pwvsz2sazlpr5 but I think small businesses could start accepting bitcoin like we have discussed and then as it scales, move to other solutions to make it more efficient/easier. But unless someone just wants to understand and use something like BTCpayserver, no one would start with it day 1.

I’ve been playing with BTCPayserver for a good while and do a few things here and there to get others to interact with it here on NOSTR, as well as it helps me learn.

Someone can take it and open a store front with it in an hour or two if they wanted. You should check it out if you’ve never played around with it.

cnix 1y ago

I’m so grateful for this thread, thanks to you both for taking the time to articulate these ideas.

I’m in agreement with whichever one of you suggested that BTC payments would be slow to start. I am currently running a BTCpay server and a lightning node. I am just marking BTC payments as cash, effectively buying KYC free sats. I think? I have not had an accountant review any of this. BTC payments so far are a minuscule portion of the business so I’m willing to face the music for any mistakes I make now.

I have an account called “Cash on Hand” and I deposit all cash to that account. If I don’t wind up moving it to a real bank account before the end of the year then the real cash is never actually there anymore, because I spent it, so I settle that balance to another account called Owner’s Pay.

I should also mention that I have two businesses operating under the same umbrella, one is service and the other is retail sales. The service business retails parts that are installed, and is probably about 65:35 service:COGS. The retail outfit is new and is where I’m experimenting with the BTCpay server.

Bigger picture, I’m trying to figure out how to sweep profits into BTC and what kind of ratio of operating capital to keep in fiat to avoid those taxable events of selling or spending the BTC until laws become more sensible. I have levered some BTC a couple of times for operating capital when needed to avoid the taxable events.

Tony Carrera 1y ago

Treating BTC as cash is fine but I would consider creating an account for BTC in your accounting software since it could become a problem when you reconcile.

It’s a solvable problem for sure, just no one is discussing best practices yet.

Crazy to think this is a 15-year old asset and it still seems early in this aspect.

You do BTCpayserver POS or online?

cnix 1y ago

POS. I actually do capture the BTC payments at the register as Bitcoin but when that data gets pushed to the bookkeeping backend I deposit it to “Cash on Hand”. I’m using Lightspeed POS and I need to build a middleware to automate the payment workflow between Lightspeed and BTCpay. But I’m not really a developer so I’ve been avoiding that and just added a payment method called bitcoin in the POS, create the sale, and then jump to a browser where the BTCpay server page is and enter the amount. Once it goes through I jump back to Lightspeed and hit bitcoin as the payment method and it prints the receipt. It’s more or less the same as accepting a check, which I also have as a payment method in Lightspeed.

Tony Carrera 1y ago

I think that could work, but I’m definitely no CPA lol.

I might have to message you in the future to see how your process is going. I setup BTCpayserver but haven’t yet pulled the trigger. Our payment flow is different, we don’t really do retail. Most of what we do is high-dollar and estimates could take days, weeks, even years by the time we consult/quote/invoice since we’re in the construction

Tony Carrera 1y ago

Hit enter too soon!

*since we’re in the construction industry (lighting mainly).

We have projects where we quote and it could take a year even two for client to finally pull the trigger. In between there are likely several revisions.

Since it’s higher dollar it’s rare to be CC. Usually check or wire transfer. Smaller orders and online sites could be interesting with lightning and BTCpayserver but then you have to properly manage the channels and whatnot.

Early-ish days still in my opinion.

cnix 1y ago

I agree, we’re super early. That’s why I want to talk to others who are trying to run real businesses and figure this out. We can identify the problems so that developers can start building the tools

cnix 1y ago

The service side of my business is that way, so I can relate. To add a layer of complexity, I deal with about 20% international customers who I think I can make a great case to for using bitcoin. They struggle with time zones, bank hours, exchange rates, fraud alerts, etc.

I’m going to have new problems once I start to convince a few of them to pay in bitcoin instead of fiat. This is closer than most people think too. At our last meetup, someone demoed using Strike payment rails to spend fiat out of their bank account to seamlessly send bitcoin to me with a zero balance in their actual strike account. No taxable event there. Strike does this in something like 30 countries already. It’s fully KYC’d but it solves a real problem

Tony Carrera 1y ago

That’s life. Solve one set of problems to find a new set of problems…

It’s great that strike does that, I’m surprised I wasn’t aware of it!