So that is where the recent drop is coming from! I guess South Korea might become the next China.

It still looks more like a warning shot towards exchanges to keep their paperwork in order though, so a full on ban on cryptocurrencies is not in yet.

Why would one want to increase the Bitcoin supply?



It would simply lead to a hardfork that will likely find no community acceptance -- meaning the original side of the fork will stay dominant, leaving increased-supply-Bitcoin-hardfork as an alt. It follows that the price of unchanged-supply-Bitcoin might stay largely unaffected while increased-supply-Bitcoin will be left in the dust.

You're welcome.

Make sure to get some professional advice as well (or at least to do some further research), as I can only speak as someone living in the EU and not as an expert.

Also I wouldn't be surprised if we see changes regarding Bitcoin taxation in the next 2-3 years. It's still a fairly new matter and classifications may change, so keep an eye out for that.

I would rather duct tape a Trezor to my face. Same thing, less silly.

It's not the worst tech-implant I've heard of (having small magnets implanted into your fingertip for some sort of "6th sense" takes the cake in that regard), but it comes pretty close in terms of unnecessary body modifications. But to each their own I guess.

If you can make it provably fair and gain the community's trust it might work, but especially the latter is going to be rather hard. Especially given the amount of BTC and people you are trying to get involved.

In the end I could just try my luck with one of the established dice sites and have the same odds and potential winnings without the extra steps of a lottery.

ICOs have been mostly overvalued to begin with, so that's nothing new. Investing in startups is already risky as is, even moreso if it comes to the ecosystem that is crypto. Just watch from the sidelines unless you feel like gambling.



What's your definition of a project and real assets, ie. what do ICOs have that BTC doesn't?

It's an interesting move, should they follow through. It's definitely going to be centrally issued, the other question on my mind is whether this is going to be a public or a private blockchain.

If they make it a public blockchain and Petro gets traded alongside other alts... things could get really messy for Venezuela, because they will make themselves a prime target for market manipulation -- or actively take part in it themselves. Either way it will be interesting to see what happens, but right now I think this move will be merely a footnote in the history of crypto.

What I mean is that I'm not aware of any broker that offers automatic taxation on Bitcoin trades (brokers and banks usually automatically deduct capital gains tax in case of funds and bonds for example).

This means you'll have to manually file tax reports (or have a tax advisor help you) and then pay taxes according to whatever tax rate applies to you.

Whether banks will report "shady" incoming transactions from crypto-exchanges or take action on it will depend on the bank. Usually has nothing to do with taxation though, rather with worries about money laundering and such.



With "lucky" i mean if you're lucky to be tax resident of one of the countries that don't tax Bitcoin gains after the 1 year holding period

If you're a tax resident of Germany or Austria and are not required to pay taxes due to the 1 year holding period... you're also not required to report anything. It supposedly may prevent you some paperwork a couple years down, but in principle you're not obliged to report those gains.

If you have to pay income tax because you sold prior to the 1 year holding period, you need to fill out the respective income tax forms and the ministry of finance will tell you how much tax you owe. Of course you could just... not report it... but then if they find out you'll be on the hook for tax evasion.

I can only talk about Austria and Germany though, as I'm a tax resident of the former and have some connections to the latter. Other European countries may handle this differently.



¯\_(ツ)_/¯

I'm afraid we're on uncharted territory, my friend.



It's simple in that the basic principle is that you have to pay taxes in the country that you live in. It's complicated in that each European country handles immigration differently. If you pick one country and really look into it, the process should be rather straightforward.

Usually you have to pay income tax in advance based on your estimated profit for the year. If you overpay, you'll get a refund. If you pay too little, you'll have to pay additional taxes and they will estimate a higher profit for the following year (unless you give them a good reason to assume otherwise, eg. when you expect to shut down your mining operation).

To clarify what profit means in this case: Say you receive two mining payouts during the year. 1.0 BTC while BTC is at EUR 15,000,- and 0.5 BTC while BTC is at EUR 10,000,-. Your taxable profits are now EUR 20,000,- regardless of BTC being at EUR 5,000,- or EUR 50,000,- at the end of the year and regardless of when and at which price you sell. So if at the end of the day you owe them, say EUR 5,000,- in taxes, that's all they want. They don't care whether you had to sell 0.1 BTC or 1.0 BTC. Note that no additional tax is applied to this sale -- or any future sale of your remaining BTC after that.

The bad news is, if BTC crashed to EUR 1,000,- and you didn't cash your taxes out before that, you'd have to sell all your BTC and would still owe them money.

The good news is, you get to deduct the cost of your mining equipment and electricity from your taxable profits.

Are we still talking EU? EU employers will automatically deduct your taxes, that is correct, but as far as I know they can only do so with registered employees that have a working permit.



1) Taxes on Bitcoin sales do not get automatically deducted in any European country, you will have to file tax reports yourself.

2) Taxes vary wildly between EU member states. Not just in regards to crypto. Be aware that the tax-free-after-1-year-of-holding rule only applies to a handful of countries (eg. Germany, Austria,... not sure where else). Selling before the 1 year holding is usually taxable as income tax (which also varies wildly between member states), selling after the holding period is usually taxable as capital gains tax (or not at all, if you're lucky). Either way, look closely into how each country handles taxation.

3) In which country you bought the Bitcoin originally doesn't matter. You should be able to prove holding time though. Arguably referring to the blockchain may suffice, but as far as I know there has been no precedence on how to report holding time correctly so far -- and you can also expect that what counts as proof for holding time will vary wildly between EU member states.

4) You pay tax in the country you reside in, assuming you have already taken full residency and have become a tax resident. At which point you become a tax resident depends on the country you move to and likely also where you are originally emigrating from (ie. immigrants from non-EU member states have to follow different rules than immigrants from EU member states. I wouldn't be surprised if there's a set of rules specifically for immigrants from the US). Prepare for paperwork as you likely won't become a tax resident automatically, but also will need to become a tax resident at one point to be allowed to legally stay there for a prolonged period of time -- assuming you don't have citizenship already.

Isn't that just markets in general?

It's merely a question of whether more people enter or leave the market (ie. profit takers vs new money). There's a lot of cash lying around, since stock markets are arguably overheated as well and bonds are a losing proposition right now. Sooner or later this cash has to be invested somewhere...

What's your tax residency? Some countries (eg. Germany) tax mining as regular income -- based on the exchange rate at the time of mining payout -- regardless of holding time.

Citizenship alone is insufficient, you also need to be a registered resident in one of the low tax EU countries to achieve tax residency.

As long as you are an US citizen, the IRS will try to get after you regardless of tax residency. The outcome will depend on the tax treaty between the respective countries, but expect additional paperwork regardless.

As far as I know if you've ever been an US citizen or resident, the IRS will try to get after you even after you've long left both the citizenship and the country behind. You likely won't owe them anything, but they'll haunt you regardless.


Not an expert in the field though, just based on my general knowledge as an EU tax payer and on anecdotes I've heard from my tax advisor. Your friend's mileage may vary and there might be loopholes that I'm not aware of.

It could also mean a decline of network hashrate until a new equilibrium is reached.


Otherwise:

1) The cost of transaction fees in terms of BTC depends on how many people make on-chain transactions.

2) The cost of transaction fees in terms of fiat depends on 1) and the BTC / fiat exchange rate.


We have no control over 2) but we can work on 1) by moving a majority of transactions off-chain using 2nd layer solutions.



Adding a larger supply would just lead to an alt coin hardfork, as it is unlikely that such a protocol change would get accepted as the canonical Bitcoin.

Market cap gets people's attention but does not convince them in the long run. People that get "convinced" merely by market cap lose their conviction just as fast when the market busts. It's only when people start looking beyond market cap that they become true supporters -- or constructive critics. Regardless of whether they are invested or not.



How exactly does one approach this? Do you try educating people on the limitations of crypto or are you simply telling people that cryptocurrencies are in a massive bubble?

You'll likely have to rely on a mix of 1) a hardware wallet with broad alt support and 2) desktop and web wallets, depending on what is available. Be extra careful when it comes to desktop wallets, as for some alts there's malware out there that tries to sell itself as an official wallet.

Paper wallets would be the most secure option beside a hardware wallet of course, but given the general lack of support and you likely having to shift around a lot, it's up to you decide whether they are worth the effort.

Mineable cryptocurrencies get decentrally issued to miners, as part of their work in securing the network (or to stakers, in the case of Proof of Stake).

Non-mineable cryptocurrencies get centrally issued by the developers / companies that released the currency. This is usually happening in the form of token sales, airdrops, bounty campaigns, etc.

There are some minable cryptocurrencies that have in part been centrally issued.



Token and Coin mean more or less the same thing -- it's a unit of value as part of a cryptocurrency. Coins usually have their own blockchain (or similar) while Tokens most commonly are issued on an already existing blockchain by a central entity.



Mostly correct. Sometimes even non-mineable coins are released in batches and not all at once by their respective project team.



Depends. If you care about decentralization you're on the right path. The issue with non-mineable currencies being centrally issued and sold should be obvious, although in the case of ICOs where they sometimes represent "shares" of a "company" this might be forgiven. ICOs have  problems in their own right though, being prone to scams, vaporware and failing startups.

Apparently there are already people offering tax advise on Fiverr, regardless of crypto. I don't see Fiverr becoming much of a platform for tax advisors on an international scale though, since unlike programming or graphic design location matters when it comes to tax advise -- ie. with skilled programmers / designers it doesn't matter much where they come from but even a skilled tax advisor won't help if they are not familiar with your local tax laws.

Either way I expect accountants / tax advisors to catch up with the game and learn how to handle cryptocurrencies within their respective country. Keeping up with current taxation laws is part of their job after all. I can very well imagine more tax advisors focusing their expertise on cryptocurrencies though, especially as more companies get involved.

Indeed. It's a bit worrying, as the crash will be all the more harder. I guess it can't be helped though.



Being there for the long haul won't protect any coin from tanking hard though. Once the time comes, some coins will be hit harder than others, at which point we'll see how much of each respective price was real and how much of it was market manipulation and wishful thinking.

Replace the word "internet" with the word "blockchain" and you pretty much get today's market, unfortunately.



That's the tricky part though. Something can be useful and still be a bad investment. To succeed, you need to find something that is useful, solves a huge problem and is not severly overpriced by the market. The last point being especially hard to asses in our case, given that crypto is a new asset class without precedent that one could meaningfully refer to.