Wow this is all really starting to add up. A hot trailer is NO place to mine BTC.  I have a lot to think about this weekend. I started out last month with just one card. Now I have 4 cards new power supply window A/C. I really don't want to give up. This month has been a lot of fun learning about BTC. Yeah, you need to figure out a new place to put your miner. You could definitely be heating up the wiring in your trailer by trying to draw too much current through it, and could definitely be at risk for starting a fire that originates in your trailer's walls. |
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I live in an old trailer with old bad wiring. The fuse box keeps tripping. Would a UPS help me have a more steady power supply?
No. Less power usage would help. Trust me, don't overdo it on a circuit breaker that keeps tripping. I couldn't figure out why mine was tripping with just a 5.5amp A/C, single 5870 computer miner, and refrigerator on the circuit. Way less than the 15 amps that the circuit was capable of. It tripped three times over the course of 4 days. Turns out, I had a bad plug that the A/C was plugged in to. My wife was home, happened to go into the room that the A/C was in, and saw a flame shooting out of the plug. It very well could have burned down our house if she wasn't in the right place at the right time. If a circuit breaker is tripping, it is trying to tell you something. Figure out what that something is. You're drawing too much power, and that's due to either having too many devices on the circuit, or bad wiring/plugs causing too much resistance in the line. |
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What is your cost basis for each coin? $0? The cost of electricity to mine each one? Something else?
and that is why we need the client upgraded with the ability to send specific coins. the cost basis for a coin i mined in march is entirely different than one i mined last week. if we don't get the ability to cost out Bitcoin, the IRS will do it for us, in some kind of catch-all fashion. and they'll do that sooner, rather than later. and it will suck. Agreed. A patch was made so that one can specify a send from address, but I think that patch should be pulled into the main release. |
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I don't know about anyone else, but after reading this discussion and reviewing some other sources, I'm going to treat my Bitcoins as inventory of my Bitcoin mining/trading business, just as if I was manufacturing, I don't know, glass figurines, and selling some and holding others, and buying some more in the hopes that their market value will appreciate. And I will depreciate & deduct the cost of my mining hardware like any other capital expenditure. I don't see how any auditor could fault me for that approach. If your existing inventory appreciates in value between the start and end of a year, if I recall, that still counts as a form of income even if you don't actually sell the inventory (as long as you can assign a market value to it).
What is your cost basis for each coin? $0? The cost of electricity to mine each one? Something else? I've really never heard of intangibles being treated as inventory, so I am curious to see whatever sources you were reviewing (if you don't mind sharing). |
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I think this opens the market for a client that has a comment section for each transaction, or a label or something
you mark what transactions are taxable and such and leave a comment on each one, why that transaction exists. obviously this would only work for people that DO want to pay taxes, but it would help people that do pay.
Indeed, I agree. Also nice would be software that would automatically track the value at time of receipt of any bitcoins, as well as any capital gains/losses that result from the sale or use of them afterward. Really though, someone should talk to an IRS representative to find out how bitcoin transactions should be valued and taxed. Building accounting software around the wrong ideas (even though they seem right to us, they might not be), would just be a waste of time. |
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Not necessarily. I believe they would consider bitcoins to be credits in an unregistered barter exchange, which counts as taxable income as soon as you receive them.
That said, I'm not going to report them that way unless requested by an auditor. It would just be a mess trying to account for them.
The Good/Bad news is that your accounting software can check the block-chain after the fact: If you have kept track of all of the addresses you have used. Based on the OP, TurboTax won't have that feature in 2011/2012. All that will tell the software is how much has gone in and out of your wallet. Just as important is WHY it went in and out of your wallet. |
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Did anyone mention that you do not have to file taxes as long as you do not make over a certain amount? even if you solved 1 block youself, you still would not have made enough to pay any taxes in any state. this also assumes you do not make any money elsewhere. But the easy solution is to simply "forget" that you made money via bitcoin when the 1st rolls around  $600 is the taxable minimum. A block = $13.6 x 50 = $680. And technically, since you received the "value" of those "credits" during the tax year, even though you didn't sell them, you should report it as income with the basis equal to the value of the coins at the time of acquisition. I'm going to made a SWAG at this point that if you actually declared X Bitcoins as income on your taxes, the IRS would just go, "WTF? Whatever" and move on. That may change in the future. Not necessarily. I believe they would consider bitcoins to be credits in an unregistered barter exchange, which counts as taxable income as soon as you receive them. That said, I'm not going to report them that way unless requested by an auditor. It would just be a mess trying to account for them. |
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New question: I've installed FTP via vsftpd, and created a new user with access to the www directory, but can't figure out how to make that directory the "home" or "default" directory for said user. And also remove the ability for the ftp user to get to the root directory through FTP - I only want it to have access to the www directory and any child folders.
EDIT: Nevermind, figured out how to by setting up a user_config_dir path in vsftpd.conf, then defining specific user permissions there.
you could also have done: usermod --home /path/to/www <username>
if you want to jail the user in his home when he is using vsftp, you can enable a chroot in vsftp.  Ah, yeah, that's what I was looking for.  Thanks! |
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Did anyone mention that you do not have to file taxes as long as you do not make over a certain amount? even if you solved 1 block youself, you still would not have made enough to pay any taxes in any state. this also assumes you do not make any money elsewhere. But the easy solution is to simply "forget" that you made money via bitcoin when the 1st rolls around $600 is the taxable minimum. A block = $13.6 x 50 = $680. And technically, since you received the "value" of those "credits" during the tax year, even though you didn't sell them, you should report it as income with the basis equal to the value of the coins at the time of acquisition. |
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New question: I've installed FTP via vsftpd, and created a new user with access to the www directory, but can't figure out how to make that directory the "home" or "default" directory for said user. And also remove the ability for the ftp user to get to the root directory through FTP - I only want it to have access to the www directory and any child folders.
EDIT: Nevermind, figured out how to by setting up a user_config_dir path in vsftpd.conf, then defining specific user permissions there.
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Why does it suck? You are only paying if you are MAKING money, profit, income, Earning, dropping fat stacks, be happy you arent in debt.
It sucks because if I mine just 1 BTC, then, to stay compliant with the law (which would be a nice bonus regardless), I have to report that "income" at its present USD exchange rate, even though: - I haven't converted it into USD - I may *have* to convert it just to pay the taxes on it - it could be worth less when I do convert it, meaning I have to keep records just because of this tiny transaction. And remember, even if I get bitcoins, that doesn't mean I made a profit! I have to deduct the cost of the mining rig I put together to get that, which (in the case of receiving just 1 BTC) is a lot more than revenue. Now, if the IRS actually allows those deductions, it's not so bad. But really, how much crap do you think you'll have to go through when they see you trying to deduct high-end computing/graphics equipment, and audit you, and you have to convince them the machine just sat in the corner and computed hashes? Most likely outcome is that they'll declare some arbitrary fraction of its cost to be "personal use" and non-deductible, and then fine you for not guessing that number. F*** that. From now on, I'll shut up about how many bitcoins I have, and I'll leave it to them to prove I know the trapdoor information about this or that elliptic curve (i.e. the private keys to certain addresses, in case you missed the reference). EDIT: OTOH, if the IRS decides to be cool and accept payment directly in BTC, that's one more argument the haters can't use  "Bitcoin's stupid because, unlike the dollar, you can't pay your taxes in it." "Actually, you can. See this IRS ruling." "Oh. Nevermind! Wait, I've got another one..." You can and should deduct the cost of the rigs themselves (either amortized through depreciation, or expensed during the tax year they were purchased), as well as the electrical costs of mining with them. If you keep proper records, there is no need for them to come up with "some arbitrary fraction of its costs to be personal use" either. You can show what portion is personal use (if any), and it should be acceptable. So, you should record taxable income when you mine or receive bitcoins for any purpose at the value of the bitcoins at that time. Then, at the time you sell or use said bitcoins, and they have increased or decreased in value, you would record a capital gain/loss in the extended amount of the difference between the value of the bitcoins at time of receipt, and the fair market value of the goods/services purchased with the same number of bitcoins.
Except, if you just buy Bitcoins, using US dollars, then in that case the BTC shouldn't count as income, right? Because, you have already paid income tax on the US dollars, and now you are just spending them to buy something. At most, you should just have to pay a sales or use tax (or a VAT)... E.g., if I used USD$100 to buy myself a gift card worth $100 at Borders (say), then the gift card shouldn't count as income. However, if those gift cards later became rare & valuable collector's items, then I can see paying capital gains on the appreciation in value. Same as for the BTC, if they appreciate. But, you only have to pay capital gains if/when the item is sold. What if the Bitcoins appreciate to the point where I can use 1 BTC to buy a million loaves of bread from a baker who accepts BTC? Then do I have to count the bread so purchased as capital gains in a barter trade? Right, that's true. If you buy them directly, it's just as though you purchased an asset, and no income is reported. If you are given them in trade for an actual good or service, then you have reportable income. So, you should record taxable income when you mine or receive bitcoins for any purpose at the value of the bitcoins at that time. Then, at the time you sell or use said bitcoins, and they have increased or decreased in value, you would record a capital gain/loss in the extended amount of the difference between the value of the bitcoins at time of receipt, and the fair market value of the goods/services purchased with the same number of bitcoins. Say I play World of Warcraft and I kill a boss and get an item worth 10 gold. If the fair market value of that 10 gold is $5, do I have a taxable gain of $5? (As I understand it, the answer in the United States is "nobody knows".) Technically, yes. But I believe the IRS says something along the lines of "we don't care" about amounts less than $600, especially if it's a one-time thing during the year for someone. For many miners though, they've made a lot more than just $600. |
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Well Atlas, where i come from people sell facebook fan pages and alikes like hot cakes and i don't see anything wrong with that. People must be rewarded, if not for more, at least for the time dedicated to it. I guess some people prefer those guys who try to trademark Bitcoin, never contributing a single bit to it  To all the nay sayers: The man worked for it. Must he starve, instead of trying to capitalize on his time? Or must he mug an old lady? Mugging and starving are the choices presented in a monetary system. ...or you could work for a living, like most normal people. |
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The issue is not just storing it unknowingly; for that, it would seem extremely unlikely one could be prosecuted(but IANAL not legal advice etc). The problem is if you are told you are storing it, you now know it and must delete it. But it is completely unreasonable to erase bitcoin history, because it is needed for verification.
In other words, this problem won't arise in other contexts because you either don't know about it, or have deleted it. But here, even if we are told about it, we can't delete it or the whole network breaks.
One solution is txs can be blacklisted as bad: nodes won't store them anymore and just reject all TX spending them. But this will fork the chain.
It might be worth asking EFF about this.
This would open the door to double-spend attacks though. Pay someone in bitcoins, whilist including the transaction in an illegally encoded data stream, then when you release the key to said illegal content, the transaction is reversed, and you get your coins back. I don't see any solution to this problem, yet. |
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Exactly. If you're measuring BTC value in USD, then a fall in value of USD also means a fall in value of BTC.
You guys realize that dollar debasement results in more dollars needed to price in equivalent value? So the dollar-based price would in fact rise. Part of that dynamic is happening in gold right now. But if the dollar falls, and the price of BTC in dollars stays the same, then BTCs also were devalued. |
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Honestly though, a currency where the value neither deflates nor inflates would be the best sort of currency.
Bitcoin is such a currency. Erm, no. Bitcoin is a deflationary currency. Wrong. Lack of inflation is not equal to deflation! Maybe we should define deflation. deflation (in Economics): a fall in the general price level or a contraction of credit and available money Assuming bitcoin lasts until 21M coins are produced, a Bitcoin economy will constantly have a fall in the general price level (i.e. increase in purchase power), because world population is always increasing while the number of bitcoins that can be spread around will be the same. Regarding a contraction of available money, one could argue that, eventually, the pace of new bitcoins being produced will outweigh the pace of old bitcoins being accidentally, and permanently, lost. |
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Example 3 on Page 19 seems like the most relevant tax information... talks about a barter club giving people credits to use. You must include in your income the value of the credit units that are added to your account, even though you may not actually receive goods or services from other members until a later tax year. http://www.irs.gov/pub/irs-pdf/p525.pdfSo, you should record taxable income when you mine or receive bitcoins for any purpose at the value of the bitcoins at that time. Then, at the time you sell or use said bitcoins, and they have increased or decreased in value, you would record a capital gain/loss in the extended amount of the difference between the value of the bitcoins at time of receipt, and the fair market value of the goods/services purchased with the same number of bitcoins. |
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Thanks drgr33n, don't feel sorry for me though. I've definitely learned a lot about linux... how to do basic navigation, unzip tars, install libs, install OS's, use SSH, change the root PW, modify text files with pico, download with wget, etc. Very valuable, because now I feel like I can at least try to solve issues that come up. And on that note, I installed Ubuntu, downloaded bitcoind, ran the 64-bit bitcoind, and just like that, it worked. I am happy. |
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Honestly though, a currency where the value neither deflates nor inflates would be the best sort of currency.
Bitcoin is such a currency. Erm, no. Bitcoin is a deflationary currency. |
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Honestly though, a currency where the value neither deflates nor inflates would be the best sort of currency.
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Turbotax is one of the last companies I would have expected to talk about bitcoins. Maybe in the 2012 software, they'll include the question, "Have you mined or sold any bitcoins this year?" Rofl. |
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