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Winklevii are probably foaming at the mouth after seeing these shares go for over double market value. Probably on the phone with the SEC right now lol.
Well the twins should get off the pot and make this happen. They've been talking about it for what 2 years? If GBTC has been able to find an approval path, what is the holdup for COIN? Worse, it seems that other potential funds have taken a wait and see approach with COIN and decided to let them pave the way and follow. But if COIN does not execute that just stalls the market. The price action on GBTC is demonstrating the real investment potential that OTC markets could unlock. This needs to happen and faster. BTW, which brokers have people had success at least putting orders in? I have schwab and they are providing quotes, but are not offering trades yet. Actually GBTC has taken a path that doesn't require approval. They're claiming an exemption from securities regulation under Reg D which means they're only allowed to take funds directly from accredited investors and the reason the shares are subject to a restricted period. The holdup for COIN is entirely on SEC's part. The commission has the authority to simply not grant approval for as long as it wants to. |
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Can someone please point me to the LAW that says cryptocoins transactions are taxable in the first place?  NOT IRS code. The IRS is simply a foreign trust based in puerto rico. They have no law making powers. Certainly: http://www.law.cornell.edu/uscode/text/26/1001(a) Computation of gain or loss
The gain from the sale or other disposition of property shall be the excess of the amount realized therefrom over the adjusted basis provided in section 1011 for determining gain, and the loss shall be the excess of the adjusted basis provided in such section for determining loss over the amount realized.
(b) Amount realized
The amount realized from the sale or other disposition of property shall be the sum of any money received plus the fair market value of the property (other than money) received.
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Yes, it is very important to say where you are, because no two countries/states have the same tax laws 100%. There's always something different between them.  For example, in the USA on the federal tax return you would have to report the mined bitcoin as of the day you received it as income. So if it was $450 when you received it, you report $450 income and pay regular income tax on that amount. Then if you sell it at $490, since you already paid taxes on the $450 you don't pay taxes on that part but pay cap gains taxes on the profit of $40. I shouldve said where i live earlier but it is in the USA, so then i would have to pay double tax on my bitcoins and i continously mine daily with a pool, but what about if i mined a bitcoin worth $500 one day and then sell it at $450 another day would i have to pay income taxes on the $500 or $450? P.S. I am trying to look for a tax advisor who knows everything about the bitcoin tax but to no avail. In that scenario you have $500 of ordinary income you pay taxes on, and a $50 short term capital loss. You can deduct up to $3,000 per year of losses from your other income. So effectively you would only have to pay taxes on the $450 that you realized. |
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It's pretty simple. "Property" is a general term which doesn't need to have every particular example enumerated. Realized gains on the sale of property are subject to taxes in the US. Anything whatsoever that fits the definition of property, i.e. anything which can be owned or possessed is subject to taxation. Here's the only legal document you need to know the IRS applied the law correctly: http://www.law.cornell.edu/uscode/text/26/1001 |
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Currently, the majority of BTC owners are investors. If it becomes mainstream, then maybe change it, but for now the classification is correct.
The problem is, Bitcoin will never become mainstream and function as a currency if this regulation stands. The chicken just ate the egg.
Since one of the mottos of bitcoin is "be your own bank", it becomes your job to track your own capital gains for the IRS. Software is available to do this, so you don't need to do it manually. At the end of the tax year, it prints you a form showing your gains. Keep the documentation in your records, report it on your tax return. Boom. done.
Whats the big problem? Everything bolded. And the fact that accepting Bitcoin now becomes extremely burdensome for businesses, forcing them to implement a completely new accounting mechanism just to accept Bitcoin. Incorrect, the guidance means that they keep using the exact same accounting mechanism they were already using and that is completely standard for tracking gains/losses of capital assets. |
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In order to track your bitcoin correctly you need to first build a spreadsheet that has every single bitcoin transaction you've ever made in it. Mined coins are treated as personal income in the amount of the fair market value of the bitcoin on day they accrue to you. That is also their basis. Whenever you sell some bitcoin or trade it for anything else that's a taxable event. Those events in 2013 are what you need to list on form 8949.
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Small request, to help us comply with the IRS's guidance on bitcoin it would be very useful if I could export the list of transactions in the app as a csv and upload it to Google Drive.
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You don't need to check anything before making a purchase with bitcoin. You just need to use a wallet that lets you export a csv of transactions and import those into your tax software the next year and let it compute the capital gains that you owe. If you exchanged an amount of bitcoin with a gain of $1 for a cup of coffee you don't need to send the IRS any paperwork or its $0.15 until April 15 the next year.
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No guessing is required. The legitimate bank account owner can simply log in on a different IP with a changed MAC address (say on an insecured wifi spot), pretend to check his statement, and then afterwards claim that his account was comprimised to reverse the ACH transaction he himself had initiated.
No need for that at all, all the customer has to do is claim that an ACH withdrawal from their account was unauthorized and the bank will reverse it. |
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What will Paxum do when criminals start using phished bank accounts to ACH funds to Paxum and then onto TradeHill to buy Bitcoin with stolen money? Will Paxum eat the loss or will they start pulling funds out of TradeHill's account as Dwolla did?
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Another factor that you're not seeing is that SHA-3 will subject to extensive analysis and testing after it's published. There's a small but real possibility that a flaw in the algorithm could be discovered that makes it less secure than SHA-2. Just jumping into the new standard is riskier than waiting until there is a clear reason to make a transition.
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I personally don't think this is an issue, because the success of the existing Bitcoin network creates a very strong barrier-to-entry for competitors. Who is going to participate or invest in a competing cryptocurrency when Bitcoin already has such a long head start? Why would anyone switch over when Bitcoin is already so well established? It would take significant, compelling new features in any competing cryptocurrency to convince people to switch over to it. Maybe it will happen someday, but I personally don't think it will be soon...
I'm just going to use your quote because it's hard to address everyone individually (although thank you everyone for your input). I have to disagree with your assertion and it's what concerns me the most. There are very low barriers to entry. Bitcoin is open source, it's out there for everyone to see and replicate. There are many barriers to entry but the primary ones are cost of capital, geography, and regulation. I'm sure there are more but I'm just going off the top of my head. Bitcoin has none of those barriers. My example of Pfizer would be a better example of a high-barrier-to-entry. They are protected by patents, have to spend millions on R&D and have to deal with the FDA scrutiny/approval process. THOSE are high barriers to entry. Bitcoin can be recreated relatively easily by a saavy computer developer(s). I'm also a bit surprised about the first to market and Facebook examples. Facebook was most definitely NOT first to market. Asian Avenue, MySpace, there were tons of predecessor social networking sites. Facebook just improved on those concepts. If anything, Facebook strengthens my point. It's the latest and most successful incarnation of social networking. But first? Not even close. Speaking of market cap (whether you feel it relevant or not) you simply cannot have an unprotected multi-million dollar concept, or whatever you want to call it, and not expect to see immense competition. If a guy was selling hotdogs for $50 each, that costs him $2 to make, AND posts his recipe for everyone to see, wouldn't you or someone else come in and start selling hotdogs too? Of course! Because there's profit to be made. That's why I say it's simple economics, to think BTC can go to $100 or whatever arbitrary number you want to use without factoring in competition is coming to a conclusion missing a very important variable. I just want to finish by saying I'm not trying to sway people one way or the other. I think it's been a great discussion. But for me, this is the way I do my investing/speculating. I play devil's advocate and see what type of responses I get. What your argument is missing is the fact that Bitcoin is fully decentralized, so no company can just create a Bitcoin 2.0 and profit. Anyone trying to create a for-profit version of the technology will need to centralize the function mining provides in Bitcoin: transaction validation and currency issuance. If Google created gCoin and intended to profit from it the design would make the product a new Beanz instead of a new Bitcoin. Would you use a new Beanz? Would anyone else? The key distinction is between centralized and decentralized digital currencies. The only threat from competition is from a superior technology. Even in this case if enough users want to keep the existing blockchain they may find consensus to use it to bootstrap the new technology. If that happened your existing bitcoins would still be valuable. |
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It depends on what exactly you intend to accomplish. If you want to leave specific amounts to certain people, then a will and keeping the BTC on deposit at a financial institution (I'm assuming this service will exist in the future.) will do that. If you just want your immediate survivors to receive the coins and let them decide how to divide it you could put your wallet on a flah drive in a safe at home.
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The reason the client asked for that fee is because the bitcoins were recently generated. If you wait some time, perhaps a day or so, it should be free.
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If you click on the BTC link in the list of supported currencies it tells you that you can deposit bitcoin by sending it to an address they give you. |
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Because of pre-existing debt. When unexpected deflation occurs real interest rates on existing debt spike, and because of lower prices on goods and services businesses may not have the cash flow to pay their debts even though in a stable price environment they would be profitable.
When the banks that made the loans to the businesses are forced their losses on a default they in turn can default on their creditors, i.e. people who have made deposits and purchased bonds, creating a cycle of financial failure.
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Such a sudden increase does not cause concern about things to come? Care to share your supplier of rose colored glasses so we can enjoy the hyperinflation together?
The increase is essentially just cancelling out the losses from bad mortgages and other loans. It's preventing massive deflation, not creating hyperinflation. |
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The most obvious benefit is that it would allow your organization to receive small donations online without the sender needing to pay transaction fees. The only infrastructure on your end that would be needed is to run the bitcoin client in order to generate an address for donors to send to and keeping the wallet that has access to that address secure.
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