What is #GetOnZero?
To get on zero means you don’t hold any fiat. You will use it as a payment method to receive or send money with people not yet on the Bitcoin standard, but you switch into Bitcoin as soon as you get fiat. You switch into fiat only when you are paying someone else.
Why not abandon fiat even for payments?
It would be a lot of work to avoid doing business with people that use fiat, but with the new generation of exchanges it’s easy to minimize the amount of time you own fiat to a few days or hours or even seconds. This almost eliminates the impact of inflation.
Doesn’t that mean I’ll owe capital gains tax?
You only owe taxes if you end up with more Bitcoin and the taxes can never cause you to have fewer Bitcoin than if you didn’t adopt Bitcoin in your checking account. Depending on how you do your accounting, you could actually end up taking a capital loss even if you complete the tax year with more Bitcoin than you started with.
Is it hard to figure out how much you owe in additional taxes?
If you use a Bitcoin exchange and only deposit fiat and only withdraw when you spend money it will do the math perfectly and give you the one number you need at the end of the year.
If you deposit Bitcoin from a different source, the exchange won’t know the price when you bought it. You’ll just need to look up those amounts manually.
It sounds scary, but it’s really fairly easy.
Do I have to incur capital gains taxes?
No, it all depends on your strategy. The point of being on zero is to minimize the length of time you hold fiat. Keeping a balance on a credit card or line of credit until new income pays it off with the excess going to buy Bitcoin can be a useful strategy that avoids having to sell Bitcoin as long as no expenses are incurred that require the use of savings.
Does it harm your privacy to use Bitcoin like this?
If you use a normal bank already your privacy will be the same as it is now. Know Your Customer (KYC) laws require that any Bitcoin exchange or normal bank verifies your identity.
If you replace fiat tied to your identity with Bitcoin tied to your identity your privacy is the same.
Could I end up with less Bitcoin?
It’s possible, but unlikely. On average Bitcoin goes up over time, but if fiat (like any other shitcoin) pumps and you don’t own it you will end up with less money.
Similar to “dollar cost averaging” sometimes you’ll be paid when Bitcoin is high and you’ll buy a dip. Sometimes you will spend when Bitcoin is low and you’ll sell a dip. But on average you’ll end up with more Bitcoin than if you don’t do this.
Isn’t it stressful?
So far everyone that has made the leap has reported a strong sense of relief. Maybe we have an emotional sense of inflation or it’s something else, but even with the volatile purchasing power of Bitcoin most people seem to feel much better only using it in payments.
Does this mean you don’t own anything other than Bitcoin?
No, we still own other assets like cars and houses. Some of us own stocks and bonds. In fact, traditional financial advice has always been to minimize the amount of dollars you own because of inflation. We are just taking that to its logical conclusion where inflation is breaking records and exchange fees are at zero.
What about exchange fees eating through your gains?
Bitcoin has historically appreciated at 0.4% per day or 40 basis points. Bitcoin exchanges like Strike and Cash App have such low fees you can switch in and out of Bitcoin and pay less than 40 basis points total. So as long as you use a low fee exchange the fees are not important.