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Bitcoin & crypto?

Unread postPosted: Mon 02 Oct 2017, 22:56:46
by Narz
Anyone here made any money investing in bitcoins or other cryptocurrency?

Re: Bitcoin & crypto?

Unread postPosted: Mon 02 Oct 2017, 23:06:54
by SeaGypsy
Not me, some friends have. From what i can see, it's just a matter of time before government crackdown kills crypto currency. Nobody seems to know when, the holders all seem to think never.

Re: Bitcoin & crypto?

Unread postPosted: Tue 03 Oct 2017, 01:46:04
by Outcast_Searcher
Narz wrote:Anyone here made any money investing in bitcoins or other cryptocurrency?

Only indirectly, via NVidia stock.

Between various problems with exchanges, theft incidents on a large scale, hackers, and the looming problem of governments cracking down, I don't like the risk profile of the crypto-currencies themselves. (Sea is right. Once they get big enough, governments WILL crack down, if for nothing else, to stop the potential for tax evasion).

With crypto there is no clearinghouse like for stock or options trades. There is no FDIC. There is no nothing as far as protections. If I want that much randomness, I'd rather go to a casino where I can at least eyeball the cocktail waitresses.

However, I believe many OTHER people will buy crypto-currencies as long as they believe in the profits, so many people will keep mining them, and NVidia will sell a lot of those chips. And I believe NVidia and peers can potentially make a HELL of a lot of money selling chips to power all the AI and sensors in the coming driverless cars, and all the robots that will take many jobs in coming years and decades.

As always with such speculations, I could be completely wrong.

Re: Bitcoin & crypto?

Unread postPosted: Sat 14 Oct 2017, 07:58:48
by AirlinePilot
I bought 2 bitcoins when they were around 1900 $. Sold them yesterday :) One of the better investments Ive made in a while.

Re: Bitcoin & crypto?

Unread postPosted: Sat 14 Oct 2017, 09:09:37
by Cog
How do you record this profit on your 1040? Do you get a capital gains statement from the Bitcoin exchange?

The reason I'm asking is that the IRS is going to look unfavorably at someone making a profit and not reporting that as a long or short term capital gain.

Re: Bitcoin & crypto?

Unread postPosted: Sat 14 Oct 2017, 09:46:57
by onlooker
Interersting question by Cog. I have a sister who does taxes, so I will ask her about this. I will get back to this thread with a detailed answer.

Re: Bitcoin & crypto?

Unread postPosted: Mon 16 Oct 2017, 10:03:37
by AirlinePilot
Shows up only as a deposit into my checking account with my Credit union. Right now its the wild west and there is little to no regulation on these kinds of transactions. Which I believe is why its so volatile and will continue to be. When governments begin to regulate it or ban it outright..which may be coming, It will probably crash.

Re: Bitcoin & crypto?

Unread postPosted: Mon 16 Oct 2017, 10:21:13
by vox_mundi
Putin Plans 'CryptoRuble' Cryptocurrency: 'If We Don't Do It, Europe Will'

Russian President Vladimir Putin has officially stated that Russia will issue its own ‘CryptoRuble’ at a closed door meeting in Moscow, according to local news sources. The news broke through Minister of Communications Nikolay Nikiforov.

According to the official, the state issued cryptocurrency cannot be mined and will be issued and controlled and maintained only by the authorities. The CryptoRubles can be exchanged for regular Rubles at any time, though if the holder is unable to explain where the CryptoRubles came from, a 13 percent tax will be levied. The same tax will be applied to any earned difference between the price of the purchase of the token and the price of the sale. Nikiforov said:
“I confidently declare that we run CryptoRuble for one simple reason: if we do not, then after 2 months our neighbors in the EurAsEC will.”

Similar to bitcoin, the CryptoRuble cryptocurrency will be underpinned by a online ledger known as a blockchain. Unlike bitcoin, however, it will not be possible for people to mine the virtual currency—the process of confirming cryptocurrency transactions and adding their record to the blockchain in order to generate new units of the currency.

While the announcement means that Russia will enter the cryptocurrency world, it is in no way an affirmation or legalization of Bitcoin or any other decentralized cryptocurrency. On the contrary, Putin quite recently called for a complete ban on all cryptocurrencies within Russia.


Russia Finance Chief Says Cryptocurrencies Are a 'Fact Of Life' and We Shouldn't Ignore Their Rise

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"Cryptocurrencies are a fact of life ... We need to create a legal framework for these operations, we need to control these operations if these operations contravene the law, including money laundering legislation," Anton Siluanov, the minister of finance for Russia told CNBC on the sidelines of the International Monetary Fund meetings in Washington, D.C.

Speaking about the full range of digital currencies, not just bitcoin, he said that Russia is planning the state regulation of the mining, circulation and the buying and selling of these currencies.

This, he said, was not just to generate tax revenues but to protect the people and investors using cryptocurrencies.

His comments follow a recent flurry of discussion on cryptocurrencies from top figures in the business world. IMF Managing Director Christine Lagarde told CNBC on Thursday that there could be "massive disruptions" from digital currencies.


Wall Street Firms to Move Trillions to Blockchains in 2018

Re: Bitcoin & crypto?

Unread postPosted: Mon 16 Oct 2017, 10:23:24
by Cog
A government managed and controlled crypto-currency? By Russia? LOL no possibility of absolute fraud there.

Re: Bitcoin & crypto?

Unread postPosted: Mon 16 Oct 2017, 10:25:15
by onlooker
From a federal income tax standpoint, bitcoin and other cryptocurrency are not considered “currency.”  On March 25, 2014, the IRS issued Notice 2014-21, which, for the first time, set forth the IRS position on the taxation of virtual currencies, such as bitcoin.  According to the IRS Notice, "Virtual currency is treated as property for U.S. federal tax purposes."  The notice further stated, "General tax principles that apply to property transactions apply to transactions using virtual currency."  In other words, the IRS is treating the income or gains from the sale of a virtual currency, such as bitcoin, as a capital asset, subject to either short-term (ordinary income tax rates) or long term capital gains tax rates, if the asset is held greater than twelve months (15% or 20% tax rates based on income).  By treating bitcoins and other virtual currencies as property and not currency, the IRS is imposing extensive record-keeping rules and significant taxes on its use"

https://www.forbes.com/sites/greatspecu ... e5c5a71a95

Re: Bitcoin & crypto?

Unread postPosted: Mon 16 Oct 2017, 10:31:23
by Cog
So essentially they are treating it like buying and selling gold or silver? Sort of up to the owner to declare it on the 1040. I suppose you can fly under their radar until a lot of money shows up in your bank accounts and the IRS wonders why. On the other hand if you exchange bit coins for products or services, it might not ever come to the IRS's attention unless the NSA is sharing their data collection with the IRS, which would not surprise me at all.

Re: Bitcoin & crypto?

Unread postPosted: Mon 16 Oct 2017, 10:40:06
by careinke
Cog wrote:How do you record this profit on your 1040? Do you get a capital gains statement from the Bitcoin exchange?

The reason I'm asking is that the IRS is going to look unfavorably at someone making a profit and not reporting that as a long or short term capital gain.


Bitcoin is treated as a commodity by the IRS. Same rules apply. I use Coinbase as my exchange and can easily find my cost basis as all transactions are recorded.

Re: Bitcoin & crypto?

Unread postPosted: Mon 16 Oct 2017, 10:46:31
by careinke
Narz wrote:Anyone here made any money investing in bitcoins or other cryptocurrency?


Yup.

BTW, I predict 1 Bitcoin will = at least one million US dollars within 15 years. Study up everyone. The Block chain is to money, as the Internet is to information. Right now we are about the same place as the internet was when Prodigy and 300 baud modems were the bleeding edge.

Re: Bitcoin & crypto?

Unread postPosted: Mon 16 Oct 2017, 10:54:02
by careinke
SeaGypsy wrote:Not me, some friends have. From what i can see, it's just a matter of time before government crackdown kills crypto currency. Nobody seems to know when, the holders all seem to think never.


How do you think the government will be able to do that? What are they going to crackdown on? No one owns it. That's the beauty of it. Bitcoin has never been hacked, it's simply not practical. The most risk is if you keep your crypto in an exchange. Exchanges have been hacked but not bitcoin. The reason is complicated, but worth knowing...

Re: Bitcoin & crypto?

Unread postPosted: Mon 16 Oct 2017, 11:11:52
by careinke
Cog wrote:So essentially they are treating it like buying and selling gold or silver? Sort of up to the owner to declare it on the 1040. I suppose you can fly under their radar until a lot of money shows up in your bank accounts and the IRS wonders why. On the other hand if you exchange bit coins for products or services, it might not ever come to the IRS's attention unless the NSA is sharing their data collection with the IRS, which would not surprise me at all.


You are exactly correct in your understanding. There is a move to make transactions under $600 as a non taxable event (being pushed by the libertarians). If that happens, you will have a loophole you can drive the titanic through. :)

Take some time to study Blockchain technology, it is literally revolutionary, and virtually unknown prior to 2008. It's going to be a huge disruptor, at least as big as the internet and automation. Cryptocurrencies are just the tip of the iceberg of blockchain technology.

OK, I'm done proselytizing.....

Re: Bitcoin & crypto?

Unread postPosted: Mon 16 Oct 2017, 11:23:06
by Outcast_Searcher
careinke wrote:
Cog wrote:How do you record this profit on your 1040? Do you get a capital gains statement from the Bitcoin exchange?

The reason I'm asking is that the IRS is going to look unfavorably at someone making a profit and not reporting that as a long or short term capital gain.


Bitcoin is treated as a commodity by the IRS. Same rules apply. I use Coinbase as my exchange and can easily find my cost basis as all transactions are recorded.

And that's fine IF such transactions are all properly reported. The problem comes in when people are trying not to report things, re the Silk Road exchange, illegal transactions they used to believe were completely transparent, and people trying not to report profits on bitcoin.

If the blockchain can now be reliably traced well enough to send 1099's for all bitcoin transactions to all US users (and I have my doubts, but in theory it could be if there were enough transparency and regulations to enforce that), then there's no problem -- once such regulations are implemented.

Re: Bitcoin & crypto?

Unread postPosted: Mon 16 Oct 2017, 11:28:38
by Outcast_Searcher
careinke wrote:
Narz wrote:Anyone here made any money investing in bitcoins or other cryptocurrency?


Yup.

BTW, I predict 1 Bitcoin will = at least one million US dollars within 15 years. Study up everyone. The Block chain is to money, as the Internet is to information. Right now we are about the same place as the internet was when Prodigy and 300 baud modems were the bleeding edge.

Sounds like a bubble to me. If Bitcoin were the only such cryptocurrency that could use the block chain, that were one thing. However, there could be a huge number (infinite?) of such currencies, and as I understand it, many are already using it.

In fact, as I understand it, some newer more popular ones are NOT using the blockchain, to allow "dark, supposedly untracable" transactions, as that's what at least a significant amount of cryptocurrency users want (which of course is what the governments will crack down on, if the activity gets big enough).

Actually, as I understand it, the big future for blockchain will be for accounting and markets in general. The idea that anything on a sufficiently tracked blockchain couldn't be faked or completely hacked, due to all the confirmation / copies kept in the blockchain distribution.

Supply, demand, profits, competition, etc. Just because Bitcoin is the first popular one, I don't see why it should be worth the current price, much less a $million. If there is going to be some standard cryptocurrency for the world or for the US, it seems to me the government will come out with something better and officially sanctioned and run on properly monitored and controlled and audited and regulated exchanges, etc -- and BETTER than Bitcoin with its performance problems and constraints. For one thing, there's been a move afoot to split Bitcoin into different types, to solve different problems. And the community has disagreed about the right solution (hence the splits). So for one thing, which Bitcoin do you pick?

But hey, I could certainly be wrong. Good luck to the bulls -- just be aware of the risk. Same thing goes for Tesla, Amazon, Nvidia, etc.

Re: Bitcoin & crypto?

Unread postPosted: Mon 16 Oct 2017, 11:32:56
by careinke
Outcast_Searcher wrote:
careinke wrote:
Cog wrote:How do you record this profit on your 1040? Do you get a capital gains statement from the Bitcoin exchange?

The reason I'm asking is that the IRS is going to look unfavorably at someone making a profit and not reporting that as a long or short term capital gain.


Bitcoin is treated as a commodity by the IRS. Same rules apply. I use Coinbase as my exchange and can easily find my cost basis as all transactions are recorded.

And that's fine IF such transactions are all properly reported. The problem comes in when people are trying not to report things, re the Silk Road exchange, illegal transactions they used to believe were completely transparent, and people trying not to report profits on bitcoin.

If the blockchain can now be reliably traced well enough to send 1099's for all bitcoin transactions to all US users (and I have my doubts, but in theory it could be if there were enough transparency and regulations to enforce that), then there's no problem -- once such regulations are implemented.


Who is going to send those 1099's? It's a decentralized currency, it's not run like debt based fiat currency, no one is "in Charge." Reporting to the IRS is your responsibility not some bank.

You can do the same thing with cash, gold etc. Talking about government control of blockchain makes very little sense.

Re: Bitcoin & crypto?

Unread postPosted: Mon 16 Oct 2017, 11:39:20
by Outcast_Searcher
careinke wrote:Who is going to send those 1099's? It's a decentralized currency, it's not run like debt based fiat currency, no one is "in Charge." Reporting to the IRS is your responsibility not some bank.

You can do the same thing with cash, gold etc. Talking about government control of blockchain makes very little sense.

There are regulations forcing (legitimate) gold/coin dealers to send 1099's for anything over (as I recall) a $600 transaction in gold. The government wants its pound of flesh for capital gains -- and they intend to get it.

If you are assuming that the government will never shut down what will become illegal exchanges once bitcoin gets big enough (if it can't be tracked somehow) -- good luck with that plan. There has already been some action on that front in China, and there's concerns about more.

Re: Bitcoin & crypto?

Unread postPosted: Mon 16 Oct 2017, 12:02:17
by vox_mundi
SPECIAL REPORT: Blockchain World; How Blockchains Work

Video ... big banks and other industry players are finding ways to spin the new tool to their advantage.

Their blockchains share a vision that is precisely the opposite of the one laid out in the Bitcoin white paper [PDF], published under the pseudonym Satoshi Nakamoto in 2009. Like Nakamoto himself (or herself), you can own bitcoins without even stating your real name; nobody is in charge; and anybody can check the history of any given transaction. The financial industry’s blockchains, however, are closed or, in their jargon, permissioned; to join one you must reveal your identity to a system administrator, who must then approve you.

In the past two years, giants such as BNY Mellon, Goldman Sachs, ING, Santander, and UBS have explored dozens of blockchain projects, and some of those are now moving beyond the proof-of-concept phase. One of the first to be released into the real world will come from a little-known financial corporation Depository Trust and Clearing Corporation (DTCC) that mediates a US $11 trillion-a-year market for an arcane class of securities (Credit Default Swaps), the trading of which allows people to pay money to shed risk or make money by accepting it.

If all goes well, a far larger chunk of the quadrillion-dollar securities market, along with many of the administrative tasks performed by banks and brokerages, could soon be running on corporate blockchains.