I have a 2 BTC output in my wallet that was purchased for $2 ($1 per BTC)
I have a 2 BTC output in my wallet that was purchased for $2000 ($1000 per BTC)
I need to make a 0.05 BTC payment to someone and the current exchange rate is $500.
How to I properly create the transaction for zero gain/loss, and what is the cost basis of each the new unspent outputs?
You can't reset your basis (or holding period) by trading with yourself, so any change outputs would retain their original basis. Moving your own asset around, for example moving a stock between certificate form and book entry form, does not change your basis. The outputs that represent spending would have a new basis (to the recipient), and would be a sale by you. Of course, I am not the IRS. They might see it differently. But the problem is I have 2 inputs each with vastly different basis, and only one output. How do I determine how much of the first input was spent and how much of the second input was spent? Clearly the new output will have to have a new basis that is somehow a combination of the two original inputs. I suppose it would be treated a bit like if I sold two previous separate stock purchases and then immediately made a new single purchase of the stock at the current price? For this example we can say that Address X contains BTC that were purchased at a cost basis of $1/BTC and Address Y contains BTC that were purchased at a cost basis of $999/BTC. (I changed your original cost basis just to make the math a little easier.) We're going to be spending .05 BTC total, but need to know how many BTC have to come from each address so that the gain from Address X is cancelled out by the loss from Address Y. We can use a system of equations that contains two equations, in order to solve for the values of the two unknown variables algebraically, which are: x = amount of BTC to come from Address X y = amount of BTC to come from Address Y We know the following values: CBX = cost basis of Address X, which is $1/BTC CBY = cost basis of Address Y, which is $999/BTC CER = current exchange rate, which is $500/BTC z = amount of BTC being sold or spent We also know that: CBX(x) + CBY(y) = CER(z) and that: x + y = z We fill in the known values and are left with two equations... First equation: 1(x) + 999(y) = 500(.05) Second equation: x + y = .05 We begin to solve by subtracting y from both sides of the second equation and we have: x = .05 - y We now substitute (.05 - y) for (x) in the first equation and we get: 1(.05 - y) + 999(y) = 500(.05) We can now solve for y: .05 - 1y + 999y = 25 .05 + 998y = 25 998y = 24.95 y = .025We can now substitute (.025) for (y) in the second equation and solve for x: x + (.025) = .05 x = .025So, in this example, with an exchange rate of $500/BTC, and .025 BTC being spent/sold from Address X, and .025 BTC being spent/sold from Address Y, the gain realized from Address X would be cancelled out by the loss realized from Address Y. |
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I'm not a lawyer or an accountant either, but that's how I interpret it. Those that buy BTC with fiat and sell BTC for fiat have to report the fiat gains as capital gains and can report the fiat losses as capital losses. Similar to the way gains and losses are reported on shares of stock. Once sold, a gain or loss is realized and you report this to the IRS when filing your income taxes. |
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...maybe we should look at the idea of hardware wallets.
Yeah, I think hardware wallets will be a big step in the right direction. Desktops, laptops, tablets, and smartphones aren't designed to protect private keys. |
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That's just a part of Econ101. It's one of many basic economic principles that very few people here seem to understand.
Yes, it's definitely taught in economics classes, but does it stand up to logic and reason or is it just propaganda? I believe Bitcoin will eventually force the ECON 101 textbooks to be rewritten with less propaganda and more facts. We'll have to wait and see how things shake out. |
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The amount of money in a nation's money supply is crucial to the health of its economy. If there is not enough money in circulation, the economy cannot grow.
This is what we often hear from the privileged few that are allowed to create money, then loan it out and charge interest on those loans. Of course if adding more money to the total money supply were such a good idea then allowing each of us to have our very own printing press to print out as much money as we need and just skip the loan part would be an even better idea. I'm sure we'd have the world's economy firing on all cylinders in no time.  |
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On the condition of mass delusion. Value is in the eye of the beholder. There was time when there were no humans on earth and no one to value gold. There will be a time when gold will no longer be valued. The 5000 years history of gold is a blink of the eye compared to the age of the earth. So it is with bitcoin. It was once worthless and will be so again. Only the mass delusion of some humans gives it value.
Agreed. Only humans have a use for money. Take humans out of the picture and there is no need for money. |
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big thanks to you.
it seems that there will be a slow BTC circulation.
but it looks like BTC can be manipulated by the big ones in this community,too.
what about the confirm time, will there be a significane difference between big amount and samll amount transfer in the long run?
Yes, it will take time for BTC to be adopted by the masses. There are still technological and security barriers that need to be overcome. When Bitcoin is as easy to use as sending or receiving a text message or e-mail then you'll see wider adoption and circulation. No new technology becomes widely adopted overnight. No one in the bitcoin community can manipulate the total supply of bitcoins. Those who constantly expand the supply of fiat money do so arbitrarily and issue that new money in the form of debt. Unlike fiat, the inflation of the bitcoin supply is controlled and predetermined and is not a debt. That's a huge difference and there is nothing anyone can do to change that. Those who find that inelastic supply unacceptable can choose to use a different currency, but they can't choose to change Bitcoin's parameters. If slow confirmation times for small transactions become an issue then someone in the market will come up with a solution. Off-the-blockchain transactions performed by a mutually trusted third party could be one possible solution. Or, using an alternate cryptocurrency like Litecoin for smaller transactions could be another option. You gotta have faith in the free market. |
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we konw that gold price is historycally stable, now we hope bitcoin's price can be more stable in the long for its widly accepted in busisness.
i think we have fath for gold because it is unique on this planet,different from any other metal.
is bitcoin unique forever as crypto tech develop ?
"Almost all the gold ever mined is stored in the form of bullion and jewelry."
is quick circulation good for bitcoin's price or value?
any thoughts? thanks.
It's a question of acceptance. The only thing fiat has going for it is wide acceptance. We each decide what we want to accept in exchange for the goods and services that we provide. Today, most people let the bankers and politicians make that decision for them. The bankers and politicians are very grateful for that, but in the future I think most people are going to prefer a medium of exchange that has a fixed, finite, inelastic total supply that isn't centrally controlled and manipulated by bankers, politicians, or anyone else. Precious metals were the best alternative before Bitcoin came along, but now the market has to choose between not just fiat and precious metals, but cryptocurrencies as well. When it comes to precious metals vs cryptocurrencies they each have their own pros and cons which I think will lead to both of them increasingly being used as money for the foreseeable future. Fiat currencies, on the other hand, offer tremendous advantages to some, but tremendous disadvantages to everyone else, which will make them unsustainable over the long term. |
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I mean cashing a money order at the post office (as opposed to depositing it through a bank, as was mentioned earlier on the thread). I think they ask for ID so theoretically they could come after you to get the cash back if it turned out the money order was no good. Is that possible? I have no idea.
Yes, the post office will confirm that the money order is valid and that you are the intended recipient (the person that the money order is made payable to) by checking your ID before giving you the cash. It's the post office's responsibility to ensure that it's valid before redeeming it. If they fail to do that and find out later that the money order is no good, then that's their loss, not mine, as far as I'm concerned. IANAL, but it seems to me that they would have to sue me in civil court if they felt I was responsible for their dereliction of duty and the resulting financial loss. I'm pretty sure a counterfeit money order would also be a matter for the criminal courts. If they contacted me to inform me that the money order was a counterfeit, then I would be happy to assist them with their investigation and help them find the scammer, but I would not be willing to assume financial responsibility for their mistake. |
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Curious about this. If you go to the post office and get cash is that reversible somehow?
I don't think there is any way to make a fiat payment any more irreversable than a cash transaction. |
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I am thrilled to have the opportunity to apply for a job within what I believe will be one of the most deserving businesses for the next century. Indeed, I found Bitcoin to be a challenging and stimulating technology, which is pretty much what I was looking for to built on a thriving career. So, as Coinbase emerged as one of the leading companies amongst the Bitcoin sphere, it became obvious for me to take a shot at it.
Also, I would change the word "amongst" to "within". |
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I am thrilled to have the opportunity to apply for a job within what I believe will be one of the most deserving businesses for the next century. Indeed, I found Bitcoin to be a challenging and stimulating technology, which is pretty much what I was looking for to built on a thriving career. So, as Coinbase emerged as one of the leading companies amongst the Bitcoin sphere, it became obvious for me to take a shot at it.
Should read "build". Also, are you still a student in graduate school or did you graduate? |
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Good stuff. We have to accept that there are going to be more hacks and heists in the future. It's unavoidable. Like you said in the video, cryptocurrencies are still in the early development and experimental stages. It's going to take time to develop the needed hardware and software as well as refine security practices and procedures. It's unfortunate that there are so many who think more regulation is the solution. The dependable and trustworthy bitcoin businesses will learn from the Mt Gox debacle and become more transparent and more focused than ever on improving their security in order to minimize the magnitude of the damage that results from future incidents. The less competent businesses won't be as vigilant and will choose to try to shift responsibility to the regulators Then they'll use inadequate regulation as a scapegoat when something goes wrong. ("It wasn't our fault, we were complying with the regulations!") Those who are asking for more regulation should be careful what they ask for...they just might get it. |
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lol..boycott the advertisers?
thats going a step too far and would never gain traction.
lets just boycott newsweek.
Their magazine has been out of print for over a year, so I doubt too many people subscribe to their service. I think most people get their news online for "free" and that most of that "free" news is funded with advertising. |
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Done! And i don't even have to do anything.  Boycott Newsweek?
But i sorta do that already anyway.
Wait ... people still read this rag mag?
It's the advertisers that I'm boycotting. I'll change the title of the OP from "Boycott Newsweek" to "Boycott Newsweek's Advertisers". |
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You read Newsweak? Isn't that your parent's or grandparent's magazine?
Not routinely, but I did read the article on Dorian Nakamoto. AFAIK, my parents and grandparents don't read / never read it routinely either. |
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Here is the list of companies that I've personally observed advertising on newsweek.com since this story broke:
Acura
Akamai
APC
AT&T
BottleLessDirect
Capital One
Carnival Cruises
ChoiceHotels.com
Cointerra (Yes, that's correct, Cointerra)
Dell
DirectBuy
The Economist
Full Sail University
GE Capital Retail Bank
Kaplan University
Logianalytics.com
Mazda
McDonald's
Microsoft
Nissan
Rackspace
Scion
Straight Talk Wireless
T-Mobile
Totalrewards.com
Toyota
Tracfone Wireless
UC Davis
Verizon
Volkswagen
Volvo
Also, feel free to let us know in this thread if you see any other companies advertising with them.
Edit: I'll be updating this list occasionally to add more advertisers that I've personally observed.
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Whether Dorian is Satoshi or not, this man's privacy was violated.
Please join me in boycotting the businesses that fund this behavior by advertising with Newsweek. I will refuse to do business with any company that advertises with Newsweek until Newsweek has apologized and compensated Dorian for this disgusting invasion of his privacy and potentially putting him in danger.
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What gen would have been dropped into Allied Controls immersion facility?
Gen1 chips. That's all that AM has produced up to now. Gen2 was skipped. |
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