The people suggesting this are operating off the idea that the IRS is "exposing" 150 million people to cryptocurrency. They obviously don't realize that we are way past the "awareness" phase.

The 150 million people who file Schedule 1 every year have already heard of Bitcoin before. If they haven't bought any yet, this question might scare them away from it. Nobody wants to attract the attention of the IRS.

I could be mistaken about that. I've never used BitMEX myself. I was just going off that Twitter thread, where Larry Cermak said this:


But if it is indeed a new requirement, you might be right. That's a pretty grimy move by BitMEX if so.

It's just the first of many opportunistic attempts to monetize the mass email address leak. It doesn't seem like a phishing scam, just an attempt to get referral commissions.

The email is actually correct about this point: Affected users should empty out their accounts and open new accounts with new email addresses. You don't need to use their referral link, though.

Otherwise, to change the address linked to your BitMEX account you need to complete KYC verification.

In an obnoxious turn of events, BitMEX is requiring users to verify ID in order to change their email address.

I wonder what percentage of their customer base had their info leaked. Some BitMEX customers are reporting that they didn't receive the email in question.

Larry Cermak puts the total at "more than 30,000 unique emails." That's a nice freebie for competing platforms.

I don't know. What is the basis for those numbers?

Either way, he still highlights the major problem -- a majority of miners can collectively decide to steal the bitcoins locked into any sidechain. The more value amassed in sidechains, the worse the incentives become.

Remember the Segwit anyone-can-spend FUD? It becomes a reality with drivechains because there is no network of full nodes to stop miners.


I believe that's correct. The crux of the issue here is that sidechains are fundamentally insecure, not that they are a major threat to Bitcoin.

However, merge mining will definitely encourage mining centralization in Bitcoin, since mining sidechains carries additional overhead costs. That skews profitability towards larger pools. Arguably, this design also means that miners are effectively implementing soft fork block size increases:



Same here.

Gold mining/recycling, coin minting, banking, circulation of paper currency -- these entail massive energy costs, far larger than Bitcoin. Securing money is unfortunately an expensive and resource intensive process.

Obviously, the real problem is that humans are still using money.

They defined it in Notice 2014–21, their first guidance on cryptocurrency. It seems to cover both cryptocurrencies and stablecoins:

I thought it was obvious I was referring to pools.

The event will have been widely publicized, so including a sweep transaction in the mempool is trivial. At that point, it's effectively the same as 10 BTC being added to the block reward. I think offering 80% of a block's mining subsidy is enough to get the attention of most pool administrators. Maybe not, but it seems to me that miners would take it > 50% of the time. They have a significantly better chance than any non-miner, so it's rationally worth their time.

They aren't asking you to specifically report your holdings. However, if you bought any cryptocurrency in 2019, you're supposed to answer "yes" to that question -- even if you never sold anything.

Hopefully they scrap this from the final form, but I'd say the chances are low.

You could mitigate that fear by keeping multiple back-ups of your keys in different locations. If one of my back-ups gets corrupted or physically destroyed, it's no big deal.

Sometimes I worry that there could be a vulnerability in my wallet software, and that black hats will find it before white hats. Fingers crossed...

The most likely outcome is that miners will take it for themselves and pay no transaction fee. Which miner/pool gets the additional reward is a matter of hash rate.

Otherwise, this is fundamentally a market mechanism, so it can't be predicted before the fact. It really depends on when the next block is found, because miners will be incentivized to confirm the transaction as long as it pays above market rates. Until that point, people will keep bidding higher and higher fees.

The "off-grid" and "with bitcoin" parts seem like separate, unrelated issues. In fact, living off-grid usually implies self-sustainability, which generally removes the need for money.


One could use solar or micro-hydro power generators to remain off the electricity grid. Long-range microwave links and mesh networking could theoretically even remove the need for conventional internet service. So assuming you have a PC, you're good to go.

But you're right, the ability to transact with bitcoin in that situation completely depends on adoption. Especially if you live out in the middle of nowhere, far from any cities. Very few people out in undeveloped areas are probably using Bitcoin.

I don't see how that addresses what I said. He certainly doesn't rule out the notion of higher fees, does he?

Bottom line, that miner revenue needs to come from somewhere. I don't see the math supporting this idea that users can pay pennies (USD) for on-chain transactions forever.


That's not the opposite. Satoshi's point that inflation subsidizes miners in the bootstrapping phase is pretty obvious. I can't elaborate any more on that.

You're ignoring the crux of what I'm saying. I'm not denying that he expected a high volume of transactions. There already are an extremely high volume of transactions compared to when he said that. What do you expect another exponential increase in volumes to do to fees?


In less than 13 years, the mining subsidy will be 0.78125 BTC. Could you give me an oversimplified back-of-the-envelope guess on where total block rewards and average mining costs might be at that time?


Why are you thinking in terms of USD value? 0.01 BTC was a perfectly normal mandatory fee in 2011.

Welcome to 2017, Blockchain!


As a company, they seem to be on the same page as BitPay. I'm guessing they'll add wallet support for a bunch of other altcoins first.

Particularly with the launch of their new altcoin exchange, Blockchain has an interest in keeping Bitcoin slow and clunky for their users.

Offchain solutions can't provide equivalent security to the blockchain.

Transaction optimization is important but fairly limited. They are linear scaling improvements. Segwit technically didn't optimize transaction size either; it just moved data outside the base block with a block size increase.


Satoshi was comparing the situation in early 2010 -- where there was virtually no transaction volume nor full blocks -- to the future. Nothing he said suggests that users would always be able to pay cheap fees. He's merely stating what I did, that the system is currently being subsidized by inflation.

Also, keep in mind that bitcoin-denominated fees are drastically lower now than in earlier versions of Bitcoin. In 2011 and prior, it was common for transactions to require a minimum transaction fee of 0.01 BTC.

So, what exactly do you mean when you say "higher fees?" How high is too high, in your opinion?

The IRS is at it again. They circulated a draft of the 2019 Form 1040, Schedule 1. About 150 million people will file this form next April. Check out the highlighted portion:



Given this, the new tax guidance issued this month, and the mass mailing campaign over the summer, it sure seems like the IRS is looking forward to crawling up our asses.

Can you elaborate on how that's supposed to work?

You can only fit more transactions by increasing block size. Of course, increasing block size reduces fee pressure and allows everyone to pay lower fees.


There's no magical solution that will allow people to transact for cheap on the mainchain. Users are supposed to pay higher fees as the subsidy disappears -- that's the design. If you're not willing to pay the real cost of transactions, you won't benefit from Bitcoin's security.

Right now, miners are subsidizing user fees based on speculation and inflation. Not many people around here are planning for what comes after.

I'm pretty sure Binance offers faster deposits than anywhere else. They recently dropped the number of required confirmations to 1 for bitcoin and 12 for ether. In contrast, Coinbase requires 6 confirmations for bitcoin deposits and 35 confirmations for ether.

Also, you'll generally get better prices trading on Binance than using instant swap services.

He should have kept it at "tribalism." There's certainly an element of that. Some maximalists are over the top with their hatred of altcoins. I'm much more indifferent myself. I see no reason to care. I may think Bitcoin is superior, but I've got no motivation to argue about it.

I would take these results with a grain of salt.

The authors provided no information about their methodology. In particular, we have no idea whether their respondents are representative of the population. If it was an online survey targeting Millennials, the results are going to be heavily skewed since they are drawing conclusions based on a very small sample.

I have a feeling the numbers are being drastically overstated.