Wow. Bitcoin is almost $1,500

[evident]

Leave it and see where 2018 takes you

Leave it and see where 2018 takes you

This is what i'm leaning towards. I bought something on newegg and saw they took bitcoins, was tempted to use it because to me its like fake money right now lol. but then i thought if i kept it, it could even go up even higher and my cost of re-entry would be that much more...

 

[pete6032]

I'm looking for dirt cheap coins to invest in. What do you guys got?

you don't invest in dirt cheap coins. You gamble with them.

 

[Yakk]

how do the underlying developers get paid out here? Surely they aren't working for free.

Of what coins? As I understand it...

A centralised coin is made for profit, so they get paid. Simple. XRP and the hundreds of other coins work this way.

A completely decentralized coin isn't owned by anyone. Bitcoin developers aren't paid by anybody beyond whatever they may, or may not, own in BTC. Many of the original devs have now become millionaires, but it hasn't changed their contributing. Some OG millionaire devs have fallen to even more greed and made their own copy like Bcash. Since the rise of Bitcoin universities have also reached out to them to see if developing a university level blockchain program would work, this would be a paying job for them. But original developers have been contributing to Bitcoin for years on a voluntary basis just like any project at github.

 

[ultimatebob]

how do the underlying developers get paid out here? Surely they aren't working for free.

You have to pay them, but probably not as much as you would think. The secret is to offer them a good cut of the currency once it goes live, so they have some skin in the game. Some people call that a "pre-mine", but that practice is looked down on. Better to call it a "soft launch"

I'm curious... how hard is it to just take Ethereum's or Litecoin's source code from GitHub and fork it into your own release?

 

[ponyo]

As always, be careful.

Most of these coins' valuations are ridonkulously stupid with 0 product, 0 go-to-market strategy, 0 clients

I'm fully aware of the risk I could lose everything. But this is way less dangerous than what I was doing with dotcom since I'm not trading on margin. It's a miracle I didn't bust multiple times back then with the amount of leverage I was trading.

I'm know all these altcoins are utter trash and totally worthless. But sometimes you got to get dirty and play in the mud with the pigs if you want some bacon. The end game in all of this is bitcoin and ethereum. That's where all the money eventually will end up. That's where most of my focus will be.

Hmm.. What max % does your money management strategy say is feasible on high risk ventures? Absolute $ figures do not mean anything really.

Eventually I want to put about the similar amount of money as I have in my "I fucked up everything and need small amount of money for restart life fund." This gold & platinum box is portion of my rainy day restart fund. So enough money to make it worth my time but not crazy money it's going to change my lifestyle. Since I'm joining the party late, I think I can do something with about $100k.

 

[destrekor]

AFAIK, cc trading isn't yet taxed by the Feds (gains), so I don't think they are currently recognized as "classic investment tools" like stocks and bonds? I would imagine that because of this, you can't really claim them as losses, either?

Actually yes, they very much want their tax money. The problem is it hasn't really been made clear whether crypto-to-crypto trades count as realizing financial growth, or if only fiat->crypto->fiat trades are taxed.

They are very much paying attention, and they even went to Coinbase to get user data on potential "tax dodgers" for tax years a few years back. They haven't begun that effort to get 2015 and 2016 crypto taxes but that'll come soon. The US-based exchanges will almost certainly comply with IRS demands.

I thought I had read clarification in the new tax legislation says asset-to-asset (so, BTC to ETH) wouldn't be taxed, but realized gains heading back to fiat *would* be subject to capital gains/income tax, depending on how long you held.

It's going to be an utter mess trying to make sense of valuations and how long things have been held. Coins/tokens valued with BTC trading pairs don't necessarily have a legal dollar amount attached, I wouldn't think. You could technically make some trades from BTC to whatever, sit on that for some time, then sell back to BTC and wind up with less BTC, but because BTC rose in value compared to fiat currencies, you still made money. I'm going to take a look at my trades in 2017 and see if I can make sense of anything to report.

But if you are reporting gains for tax, you can absolutely deduct losses in those same assets, if realized. This is where I think it could be sticky: will they count realized losses if they were only realized in BTC? Say you trade BTC for ETH, then trade back to BTC for a loss, and then trade again for XEM and gain in value - you technically realized a loss and then realized a gain, but the government may not accept those deductions if they weren't realized in fiat.

I'm really hoping we start getting more guidance from the IRS on this, because if they want to tax any realized gains even if they haven't been cashed out for USD, they sure as hell ought to acknowledge realized losses. For any asset trades that are taxed, you can deduct losses up to the total gains. If you only lost in that specific year, you can deduct up to $3000 on your taxes, and can carry over any losses added up beyond that $3000 limit.

I don't think I ended up with any realized gains (in cold hard cash) for the 2017 tax year, or realized losses for that matter. But that's only if we are counting conversion to USD. Damn, we really need straight guidance on this.

 

[destrekor]

You have to pay them, but probably not as much as you would think. The secret is to offer them a good cut of the currency once it goes live, so they have some skin in the game. Some people call that a "pre-mine", but that practice is looked down on. Better to call it a "soft launch"

I'm curious... how hard is it to just take Ethereum's or Litecoin's source code from GitHub and fork it into your own release?

Interesting thing, a soft launch is perfectly ok if you do it carefully! Bitcoin did it even - only the developers were utilizing the mainnet blockchain for a little bit of time, and received a ridiculous number of coin for their early, practically zero-difficulty mining. After they felt everything was going swimmingly, they made the public launch.

Sure, it was "pre-mined" prior to launch, but it was still mined. I think that's perfectly fair to ensure you have a workable product prior to launch, but of course that means you could benefit greatly too. Biggest thing is remaining committed (or making the appearance at least) to development and improving the product. FUDsters are always going to try and spin it. Frankly, I think it's too risky to launch the public mainnet without at least some pre-mining, else you could discover the product has fundamental flaws that would cause total loss of all coins mined thus far and require a relaunch.

 

[destrekor]

Of what coins? As I understand it...

A centralised coin is made for profit, so they get paid. Simple. XRP and the hundreds of other coins work this way.

A completely decentralized coin isn't owned by anyone. Bitcoin developers aren't paid by anybody beyond whatever they may, or may not, own in BTC. Many of the original devs have now become millionaires, but it hasn't changed their contributing. Some OG millionaire devs have fallen to even more greed and made their own copy like Bcash. Since the rise of Bitcoin universities have also reached out to them to see if developing a university level blockchain program would work, this would be a paying job for them. But original developers have been contributing to Bitcoin for years on a voluntary basis just like any project at github.

I don't see Bitcoin Cash as a copy made for greed; rather it was a fundamental disagreement about how the bitcoin network should evolve. Some developers want it to be used just like any other currency, with snappy transaction processing and everything. Bitcoin Core developers don't see it that way, and if I remember right, their proposed solutions to the network issues is adding something of a centralized system on top of the blockchain (or separate from it) as opposed to increasing the block size so more transactions can be processed per block.

I still don't see BTC or BCH ending up as the true instant payment solution - there are superior systems that appear to be capable of scaling far better.

 

[VirtualLarry]

Actually yes, they very much want their tax money.

Well, what about mining?

I liken it (kind of) to farming. You need your land, your seeds, your water supply, and your machinery (or animals, which have their own up-keep) to farm. And of course, your own labor to run it, although it mostly runs itself.

You invest into those assets, and they reward you (hopefully) with more assets, your crop. Then you have to sell them (incurring costs for harvesting - labor, and transportation).

Mining coins on a PC is similar, you need electricity, internet, PCs, graphics cards, and time and effort setting them up, monitoring them, flipping breakers back to normal if you blow one, rebooting the PC if it crashes, etc.

So, if we start at nearly zero assets, we would have costs associated with buying and assembling the PCs, buying and installing the GPUs, and paying for internet, and least of all, electric power to run the thing.

So, I think that those expenses should be deductible as costs, as well as the overheat of the internet plan, and the electricity utilized. Not to mention, your labor (how does that get accounted for?).

So, a purely hypothetical, a $1000 PC, with a $500 GPU, that makes $5/day, or $150/mo. Internet costs $110/mo for gigabit, power costs $25/mo per PC, and trading fees to turn BTC into fiat, are a certain percentage.

 

[Zeze]

From what I know:

Mining = income tax
Trading coins = capital gains tax

 

[Charlie22911]

Is there a statute of limitations? Mined a bunch of BTC in its infancy (2010-2011), never bothered to investigate the tax implications... traded some BTC for various ALTs and did some mining this year too for fun. Also spent a few BTC to contribute to its legitimacy in a way.
Never purchased crypto with fiat though.

Need to figure out what I owe Uncle Sam I suppose.

 

[VirtualLarry]

If you mined (or sold hashing power), and earned BTC (or some fractional amount), and then turned around and re-invested that BTC in equipment, and never converted it to fiat first, wouldn't that basically just be an asset-swap type of transaction, and not subject to taxation? (Did not "hold" the BTC or wait for it to appreciate in value.)

Edit: Likewise, though, you wouldn't be able to write-off the expense of the equipment, if you didn't pay with fiat initially, I suspect.

 

[Yakk]

I don't see Bitcoin Cash as a copy made for greed; rather it was a fundamental disagreement about how the bitcoin network should evolve. Some developers want it to be used just like any other currency, with snappy transaction processing and everything. Bitcoin Core developers don't see it that way, and if I remember right, their proposed solutions to the network issues is adding something of a centralized system on top of the blockchain (or separate from it) as opposed to increasing the block size so more transactions can be processed per block.

I still don't see BTC or BCH ending up as the true instant payment solution - there are superior systems that appear to be capable of scaling far better.

Bitcoin had a soft fork to enable Segwit transactions last summer. These are near instant acknowledgement of a transaction, in advance of standard confirmations. These are the same decentralized transactions as usual. Most worldwide exchanges have been using this protocol for months now except for Coinbase & gdax in the U.S. which refuse to use Segwit addresses for some reason, so their customers need to pay higher transaction fees and/or wait longer. Bcash does not use the Segwit protocol and opted for bigger mining blocks instead. Eventually they'll get congested also without segregating the transactions.

Then I think you were alluding to the Lightening Network Protocol, which isn't specific to Bitcoin, many coins will be able to adopt it. It's a second layer protocol for fast & cheap offchain transactions, you can download a testnet version and see for yourself. There is some Fud going around it being centralized in hubs, but it isn't designed to be as far as I can tell. Anyone should be able to use existing channels or create their own to bypass any possible hubs created by a possible lack of running nodes. However so far the node adoption rate has been incredible.

 

[destrekor]

From what I know:

Mining = income tax
Trading coins = capital gains tax

To be fair, even if mining = income tax, capital gains tax falls into two categories, well technically just one. Any capital gains earned on any asset held less than 12 months and sold, is actually taxed at your income tax level. Capital gains tax has a different bracket for assets held for over 12 months (long term capital gains), which unless you are at the lowest income brackets, has a 15% rate. (The two lowest income tax brackets I believe have a 0% long term gains tax rate).

This would have a perhaps favorable implication for mining: if you held those mined tokens for over a year, if they are taxed as income tax, then you would benefit by claiming them as a long term capital gain instead. If the over 12 month rule applies for mined coins, then you can basically return to the original idea that it is an asset and earned and spent while holding less than 12 months it would indeed be taxed as income tax (though that means you would have to file them in the proper spot on the 1040 (and whatever the supporting document is).

Though I do wonder if you can, in some way, count the hardware and electricity costs as the cost basis in some fashion, reducing the tax owed.

If all this isn't properly explained, in law, how the IRS is to treat crypto assets in what circumstances, I find it difficult to lawfully come after back taxes. And frankly, anything prior to enactment of said legislation ought to be forgiven/ignored. For a comparable situation in the fiat world, consider this: let's say you start with USD, and convert that into GBP to go shopping, and the USD:GBP trading pair sees USD suddenly drop or GBP skyrocket in value, and when you are done shopping or whatever and go back to convert to USD, you actually end up with the same amount and/or even more USD than before. Is this supposed to be a taxable event? Crypto Mining still yet is quite different than anything before when it comes to taxation - the assets "created" are done through an entirely radical departure from standard asset creation, especially because they can be used as a direct currency as opposed to merely representing an asset swap. I'm probably overthinking it but I swear it just feels far different than anything that has come before.

 

[destrekor]

Bitcoin had a soft fork to enable Segwit transactions last summer. These are near instant acknowledgement of a transaction, in advance of standard confirmations. These are the same decentralized transactions as usual. Most worldwide exchanges have been using this protocol for months now except for Coinbase & gdax in the U.S. which refuse to use Segwit addresses for some reason, so their customers need to pay higher transaction fees and/or wait longer. Bcash does not use the Segwit protocol and opted for bigger mining blocks instead. Eventually they'll get congested also without segregating the transactions.

Then I think you were alluding to the Lightening Network Protocol, which isn't specific to Bitcoin, many coins will be able to adopt it. It's a second layer protocol for fast & cheap offchain transactions, you can download a testnet version and see for yourself. There is some Fud going around it being centralized in hubs, but it isn't designed to be as far as I can tell. Anyone should be able to use existing channels or create their own to bypass any possible hubs created by a possible lack of running nodes. However so far the node adoption rate has been incredible.

Ah, I was mixing things up. Thanks.

But still, the large increase in block size will still delay any issues for BCH for quite some time, and SegWit is something that can still be enabled. That fork really happened not so much because SegWit was something they disagreed with, but rather because the most popular proposal at the time, SegWit2x, wasn't going to be enough. BCH got the hard fork out of the way for block size (I think the 2MB block size was the main sticking point - if you're going to have a hard fork for a block size increase, might as well be a little forward thinking), and can activate SegWit as a soft fork just like BTC. I think the larger block size is going to be crucial if BCH can become the actual payment network they envision - BTC still hasn't reached that true level as a payment network I don't think, it's congested not because people are buying everything with it, but more because of all the transactions involved with everything, especially trading.

 

[Yakk]

Anybody get lucky with that absolutely *MASSIVE* ETH market dump to BTC? Completely stupid way to sell and lose a f-tonne of money, but hey people can do what they want. Made a lot of money for a lot of other people I guess.

Ah, I was mixing things up. Thanks.

But still, the large increase in block size will still delay any issues for BCH for quite some time, and SegWit is something that can still be enabled. That fork really happened not so much because SegWit was something they disagreed with, but rather because the most popular proposal at the time, SegWit2x, wasn't going to be enough. BCH got the hard fork out of the way for block size (I think the 2MB block size was the main sticking point - if you're going to have a hard fork for a block size increase, might as well be a little forward thinking), and can activate SegWit as a soft fork just like BTC. I think the larger block size is going to be crucial if BCH can become the actual payment network they envision - BTC still hasn't reached that true level as a payment network I don't think, it's congested not because people are buying everything with it, but more because of all the transactions involved with everything, especially trading.

The block size itself is of more interest to the breakaway Bcash miner cartel than practical use. Don't forget Bcash is firmly centralized, this is probably the main reason why it is not taken seriously by any institutional investor outside the controlling cartel itself. If you look at the trading activity you can see every instance where the price gets pumped then degrades until a sudden pump happens again to help it to stay at a +/-.2 BTC ratio. Although lately even that seems to have waned.

 

[ponyo]

I was thinking about the incredible arbitrage opportunity between the bitcoin, eth, and other coins prices in US vs South Korea. It seems like there is big enough price difference to make it lucrative and very worthwhile to buy the coins in the US and send it to Korea to sell it there. The problem is getting the money out of South Korea but you just have to get creative. This seems like no-brainer. What am I missing?

EDIT: NVM, I just read about the South Korea's Financial Services Commission Chairman's speech on cracking down on bitcoin money laundering. I don't want to be involved when regulators are looking to put the hammer down on the practice.

 

[Yakk]

I was thinking about the incredible arbitrage opportunity between the bitcoin, eth, and other coins prices in US vs South Korea. It seems like there is big enough price difference to make it lucrative and very worthwhile to buy the coins in the US and send it to Korea to sell it there. The problem is getting the money out of South Korea but you just have to get creative. This seems like no-brainer. What am I missing?

Imo you're not missing anything... just it's getting quite difficult to open S. Korean account and moving funds sometimes. It's not in mainstream trading news yet, but it's relatively easy and much safer than trading.

 

[Zeze]

I was thinking about the incredible arbitrage opportunity between the bitcoin, eth, and other coins prices in US vs South Korea. It seems like there is big enough price difference to make it lucrative and very worthwhile to buy the coins in the US and send it to Korea to sell it there. The problem is getting the money out of South Korea but you just have to get creative. This seems like no-brainer. What am I missing?

EDIT: NVM, I just read about the South Korea's Financial Services Commission Chairman's speech on cracking down on bitcoin money laundering. I don't want to be involved when regulators are looking to put the hammer down on the practice.

Yea.. I don't think this will work for Korea. Korea is cracking down to get rid of anonymous trading and tying your citizen ID (similar to US SS#) to exchanges where you trade.

Go to 'online use' section in wiki.

 

[IronWing]

There is an ad on this page for "Bitcoin Illuminati". I have no idea what it's about but the presence of the ad pleases me.

 

[ultimatebob]

I heard that they're starting to crack down on the Chinese Bitcoin mining operations. This might be good for Red Squirrel's Canadian mining conglomerate

 

[Yakk]

Bitcoin Smart Contracts are moving forward faster than I'd expect!

https://www.npmjs.com/package/ivy-bitcoin

 

[Yakk]

I heard that they're starting to crack down on the Chinese Bitcoin mining operations. This might be good for Red Squirrel's Canadian mining conglomerate

I've heard rumours some Canadian provinces are already sold out of transformers in anticipation of some large scale farms already on their way.

This is no joke, all available data centers medium & small I know of are all rented out. There are people actively scouting out high voltage available buildings.

 

[fleshconsumed]

https://www.reddit.com/r/icon/comments/7lk3ta/how_to_buy_icx_icon_token/

Follow this instruction. Except:
1. Preferable to buy ETH in Coinbase instead of BTC (much lower fees for transaction and sending to Binance)
2. Be sure to deposit your ETH to Binance in ETH wallet! If you send to a wrong wallet, then I think it's lost forever.
3. Their step 4, make sure you locate VEN to ETH (rather than ICX_ETH). Buy VEN with your ETH.

VEN is undergoing rebranding to VET. No action needed on your end. Good luck.

Again, there are plenty of other promising coins. Research and invest at your own risk.

What about step 5, withdrawing VET into local wallet? I don't trust online exchanges to keep coins. Where do you withdraw your VEN/VET coins?

 

[Red Storm]

What about step 5, withdrawing VET into local wallet? I don't trust online exchanges to keep coins. Where do you withdraw your VEN/VET coins?

You can use MyEtherWallet, which is what I'm using to store my VET/VEN.