Swedish ASIC miner company kncminer.com

[RoadStress]

So the order should be in your hands within the allotted buyer protection period (approx 45 days?).  I would expect the same for their ASICS. They shouldn't be asking for any money unless they can prove their 28nm chip exists and works as expected.

They had mentioned optimisation circa 350gh/s. I would have preferred they remained quiet on that front and under promised then over delivered beyond expectation.

I don't want to see the 28nm chip work as expected. I just want to see it on paper. If they can show us some kind of contract with a fab(or any other proof) then everything is fine by me(considering ORSoC is giving a hand). The increase in hashrate is pretty big(around 40% if my math is ok) and i think they may have done this to look more appealing to customers considering the nonstop increase in difficulty. Did they stated where would they get the money for R&D? From the Mars product? From ORSoC?

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[FlappySocks]

I don't have a business 

If your going into Bitcoin mining, then you have a business! 

[Bitcoinorama]

I don't want to see the 28nm chip work as expected. I just want to see it on paper. If they can show us some kind of contract with a fab(or any other proof) then everything is fine by me(considering ORSoC is giving a hand). The increase in hashrate is pretty big(around 40% if my math is ok) and i think they may have done this to look more appealing to customers considering the nonstop increase in difficulty. Did they stated where would they get the money for R&D? From the Mars product? From ORSoC?

No, I think that has just been assumed, although maybe in their first newsletter they may have mentioned that they were using in Mars to fund Jupiter development, though they have definitely said they make no money from Mars, that it's a proof of intent.

Best, A.

[Bitcoinorama]

I don't have a business 

If your going into Bitcoin mining, then you have a business! 

I'm still confused by all this as Bitcoin is still not officially accepted by government entities.

So to register and gain a VAT number and then provide annual accounts of what exactly?

I could make a business with potentially loads of expense and no gain, or if they do recognise bitcoins eventually pay a huge income tax, potentially thieving any profit. Profit thats volatile and may disappear subsequent to annual admission?!

Surely bitcoin mining is just a hobby until there is some wider acceptance and legislation??

I would love to hear of a clear strategy here Flappy...

[FlappySocks]

It's really simple.

+Bitcoins mined
- cost of hardware
- cost of electricity
- trip to Stockholm

= Profit (+ or -).

if positive profit, pay income tax.
If negative profit, claim against income tax.

Tax man wont care if it's a hobby or not.  If it is a hobby, make sure your income goes to charity.

If you turn a room in your house over to this, then you can claim rent on that room.  Get VAT registered, and claim back any VAT on your PC, mining kit, travel expensis, etc etc.

[Bitcoinorama]

It's really simple.

+Bitcoins mined
- cost of hardware
- cost of electricity
- trip to Stockholm

= Profit (+ or -).

if positive profit, pay income tax.
If negative profit, claim against income tax.

Tax man wont care if it's a hobby or not.  If it is a hobby, make sure your income goes to charity.

If you turn a room in your house over to this, then you can claim rent on that room.  Get VAT registered, and claim back any VAT on your PC, mining kit, travel expensis, etc etc.

This all sounds great but the Bitcoin value fluctuates so wildly currently and at points how do you determine what the accepted associated value is?

I mean say a bitcoin = $200 come April '14 and then immediately after you submit, a crash causes the value to = $50. You've then paid income tax on a higher value and lost significant funds needlessly.

Surely like shares, it would be capital gains and not applicable until you cash out.  Therefore aren't you always in a deficit from a business investment standpoint??

[FlappySocks]

or spend them.

[organofcorti]

or spend them.

Surely the Government doesn't tax blow and hookers do they? If you could get bitcoin hookers, that is.

[RoadStress]

I don't want to see the 28nm chip work as expected. I just want to see it on paper. If they can show us some kind of contract with a fab(or any other proof) then everything is fine by me(considering ORSoC is giving a hand). The increase in hashrate is pretty big(around 40% if my math is ok) and i think they may have done this to look more appealing to customers considering the nonstop increase in difficulty. Did they stated where would they get the money for R&D? From the Mars product? From ORSoC?

No, I think that has just been assumed, although maybe in their first newsletter they may have mentioned that they were using in Mars to fund Jupiter development, though they have definitely said they make no money from Mars, that it's a proof of intent.

Best, A.

I remember that too, but how will they be able to delive a fully functional device in just 4 months if they didn't even start to raise the money for ASIC R&D? What fab will take them on such a short notice?

[johnyj]

They're only taxable when you cash out. You can't tax or declare income in bitcoins.  

It's not even taxable when you cash out, since you did not bought it

If you bought bitcoin and sell it later, then it is a capital gain, it is taxable

If you produce and sell a product, then you make some profit, it is taxable. Since bitcoin is not a product but a currency, it will be treated as a capital gain, but you have never purchased that currency, what should you fill in for the purchased price?

Think this another way: Central banks produce currency everyday and they never pay tax

[Bitcoinorama]

I don't want to see the 28nm chip work as expected. I just want to see it on paper. If they can show us some kind of contract with a fab(or any other proof) then everything is fine by me(considering ORSoC is giving a hand). The increase in hashrate is pretty big(around 40% if my math is ok) and i think they may have done this to look more appealing to customers considering the nonstop increase in difficulty. Did they stated where would they get the money for R&D? From the Mars product? From ORSoC?

No, I think that has just been assumed, although maybe in their first newsletter they may have mentioned that they were using in Mars to fund Jupiter development, though they have definitely said they make no money from Mars, that it's a proof of intent.

Best, A.

I remember that too, but how will they be able to delive a fully functional device in just 4 months if they didn't even start to raise the money for ASIC R&D? What fab will take them on such a short notice?

Roadstress, I presume R&D for the most point has already been done. This is not new territory for ORSoC.

[FlappySocks]

If you produce and sell a product, then you make some profit, it is taxable. Since bitcoin is not a product but a currency, it will be treated as a capital gain, but you have never purchased that currency, what should you fill in for the purchased price?

Thats in interesting way to look at it.  There is a cost to mining though, so in a sense there is a purchase price.  A bit like the cost of making a carrot. You have to pay for the energy, tools and wages to plant the seed.

[Bitcoinorama]

or spend them.

Flappy, are you UK based? because you and I need a private chat about this. In essence I could mine bitcoins as a business and write off my rent (assuming I mine at home as opposed to hosting), hardware (including computer required to connect, broadband and associated office items; printer, phoneline, etc.) and electrical expense without making a profit until which time it is a recognised currency or I sell them?

Johnny J, surely bought or mined, coins are an asset and subject to capital gains once turned into fiat?

What happens if the coins are bartered for something entirely different? Does that product/service then become an asset/expense of the company?

This is very, very interesting, as we provide a huge service to the Bitcoin project processing transactions.

Again, slightly off topic, but it concerns any investment made here. I appreciate all knowledgable responses and this is relevant to everybody.

Actually, anyone UK based PM me, as this is something I want to look into and potentially changes everything about how we approach this as an investment.

[FlappySocks]

Flappy, are you UK based, because you and I need a private chat about this.

Yes in UK. I'll drop you a PM later. Got to go out.  This is getting off topic anyway.

[m3whiteknight]

let get back to the topic.   


Can we have a list of volunteers that will go visit this company in person and see if they are real ?

Who is planning to go

[Bitcoinorama]

let get back to the topic.   


Can we have a list of volunteers that will go visit this company in person and see if they are real ?

Who is planning to go

I'm keen. Even moreso with Flappy's suggestion, hence the deviation slightly off topic, sorry about that!

[RoadStress]

I don't want to see the 28nm chip work as expected. I just want to see it on paper. If they can show us some kind of contract with a fab(or any other proof) then everything is fine by me(considering ORSoC is giving a hand). The increase in hashrate is pretty big(around 40% if my math is ok) and i think they may have done this to look more appealing to customers considering the nonstop increase in difficulty. Did they stated where would they get the money for R&D? From the Mars product? From ORSoC?

No, I think that has just been assumed, although maybe in their first newsletter they may have mentioned that they were using in Mars to fund Jupiter development, though they have definitely said they make no money from Mars, that it's a proof of intent.

Best, A.

I remember that too, but how will they be able to delive a fully functional device in just 4 months if they didn't even start to raise the money for ASIC R&D? What fab will take them on such a short notice?

Roadstress, I presume R&D for the most point has already been done. This is not new territory for ORSoC.

I thought that is the most expensive stuff when doing an ASIC. Why do they need upfront money from Mars and Jupiter then? Why can't they make the devices ready to sell?

[johnyj]

If you produce and sell a product, then you make some profit, it is taxable. Since bitcoin is not a product but a currency, it will be treated as a capital gain, but you have never purchased that currency, what should you fill in for the purchased price?

Thats in interesting way to look at it.  There is a cost to mining though, so in a sense there is a purchase price.  A bit like the cost of making a carrot. You have to pay for the energy, tools and wages to plant the seed.

Anyway, there is no tax charged for making currency. If you look at the central bank's money printing business, they also have a cost like the material and manufacturing cost for paper money and electricity/server cost for digital money etc, but they never pay any tax to government

If you define bitcoin as a commodity, categorized as gold/silver, then you should pay tax when you sell them

[Bitcoinorama]

I don't want to see the 28nm chip work as expected. I just want to see it on paper. If they can show us some kind of contract with a fab(or any other proof) then everything is fine by me(considering ORSoC is giving a hand). The increase in hashrate is pretty big(around 40% if my math is ok) and i think they may have done this to look more appealing to customers considering the nonstop increase in difficulty. Did they stated where would they get the money for R&D? From the Mars product? From ORSoC?

No, I think that has just been assumed, although maybe in their first newsletter they may have mentioned that they were using in Mars to fund Jupiter development, though they have definitely said they make no money from Mars, that it's a proof of intent.

Best, A.

I remember that too, but how will they be able to delive a fully functional device in just 4 months if they didn't even start to raise the money for ASIC R&D? What fab will take them on such a short notice?

Roadstress, I presume R&D for the most point has already been done. This is not new territory for ORSoC.

I thought that is the most expensive stuff when doing an ASIC. Why do they need upfront money from Mars and Jupiter then? Why can't they make the devices ready to sell?

Don't know, ask them. I'm sure everyone is interested in how they respond to this. Although certainly materials and fabrication will be an expense they need to cover.

EDIT: from their website's 'Mars' page:

The Mars product is basically a proof of concept that we can easily mass-produce, and together with the voucher of $2000 combined with early access to the Jupiter product, you will be able to mine with the Mars product while we are developing the Jupiter product.
Developing an ASIC costs allot of money, and it's price structure and technology decision very much depends on the volume. So it is therefore critical to have pre-orders to make the most optimal technology selection. Same applies to some extent also for the Mars product, meaning that we need to know the production volume before the actual production, in order to negotiate components prices etc. which will help us increase the voucher/ Discount from the Jupiter product, it may very well end up cheaper than the competition when this is taken into account.

[Bitcoinorama]

If you produce and sell a product, then you make some profit, it is taxable. Since bitcoin is not a product but a currency, it will be treated as a capital gain, but you have never purchased that currency, what should you fill in for the purchased price?

Thats in interesting way to look at it.  There is a cost to mining though, so in a sense there is a purchase price.  A bit like the cost of making a carrot. You have to pay for the energy, tools and wages to plant the seed.

Anyway, there is no tax charged for making currency. If you look at the central bank's money printing business, they also have a cost like the material and manufacturing cost for paper money and electricity/server cost for digital money etc, but they never pay any tax to government

If you define bitcoin as a commodity, categorized as gold/silver, then you should pay tax when you sell them

Double +1!!!

Genius! That's it!! We follow their model as they are a private entity anyway!! And one Bitcoin stands to disrupt!!

They can't complain, it would be double standards in a supposedly free market.


http://www.kpmg.com/BR/PT/Estudos_Analises/artigosepublicacoes/Documents/Financial-Services/banking-financial-reporting-practices.pdf