rpietila Wall Observer - the Quality TA Thread ;)

[aminorex]

Sorry so many posts, but I think you guys are highly underestimating the effect of Murphy's Law as new layers of complexity are added.

The masses are not highly motivated to sort through that.

What seems no brainer simple to you, is unfathomably complex (or just not worth figuring out) to them.

Just downloading the Bitcoin client is too complex. That is why they join if they get an email from Coinbase to click a link.

I agree with you entirely and completely.  I almost never recommend for anyone to use bitcoin, unless they have a compelling use, simply because it is too hard to use.  I do recommend for everyone to buy some bitcoin, because they will want to use it one day, and by then it will be much more difficult to buy.

Until ease of use is established, it is only high value-add applications which justify using bitcoin.  Not only must the use justify the burden of learning to use it, the risk of badly learned security practices, and the cost in time and fees of establishing a channel of supply and exploiting it, but it must also justify the opportunity cost of expending bitcoin, to the degree that the use results in less exposure to the appreciation trend than would otherwise occur.


 

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[aminorex]

This is an interesting point.  In the long run, this IRS opinion that miners need to report income when they mine, is frankly absurd, and will definitely be reversed in a tax court, if they don't revise it before then.

How do you figure? The network is paying them for their services of mining. Seems correct to me and it is the ruling I expected and predicted since long-time ago.

I can freely produce a work with a market value, and the act of production does not result in a taxable event, in every precedent case.  Selling the work produces a taxable event.  A network cannot pay you anymore than a gold mine can pay you.  You book a profit when you sell the gold you mined.  Your paint box does not pay you when you paint a picture.  When you sell the picture, a taxable event occurs.

 

[aminorex]

Just make an anonymous coin and the problem is solved for now.

It does not remove the tax liability, all else being equal.  It may reduce the probability of compliance.  Whether that is a good thing is hotly contested.  Your position seems clear, at least.

[AnonyMint]

After a bottom it goes up. We've seen this like.. 7 times now in Bitcoin's history. 99.95% don't own bitcoins. Hundreds of millions have now heard about them, mostly negative. It takes 12-24 months for them to buy. The first 1% of them is the next 500% of Bitcoin adoption, the ones who lift the price to $5,000 before leaves fall from the trees. If 5 million people invest $1,000 per person, they can buy 10 million bitcoins. That absorbs all the lonely Chinese and stolen coins, like many times before. There is nothing new in Bitcoin. Everything has happened before. It is a fractal. Before I even bought, it was explained to me.

99.95% of that which is not currently Bitcoin's target market.

The only way Bitcoin is adopted by the masses is if it becomes a government fiat. Period.

Refute?

I believe you are too preoccupied with USD. The feedback loop of (lower USD price -> less users -> even lower price) has never before held true with Bitcoin, and I have no reason to believe it would now.

What about 2011?

[AnonyMint]

Just make an anonymous coin and the problem is solved for now.

It does not remove the tax liability, all else being equal.  It may reduce the probability of compliance.  Whether that is a good thing is hotly contested.  Your position seems clear, at least.

I ran some polls. Perhaps 25 - 40% of Bitcoin users are ready to give their middle finger to the government if they feel confident in doing so. Others see working with the government as the only viable future.

I don't see how Bitcoin can go mainstream without the government removing the tax issue. I don't think technology can solve it for the masses.

So I already assume that either Bitcoin will become a government fiat, or it will peak when it reaches saturation in the current speculator demographic (we are not near that).

The wildcard is some application of Bitcoin that compels the masses to use it, perhaps some social networking application. But what if that application requires some feature Bitcoin doesn't have. Or it might be offchain.

P.S. I will be actively trying to make that happen and trying to make Bitcoin fail. But I probably can't do that. I hate Bitcoin in some sense because it already has 50% of mining at one pool and controlled by ASICs and I see it as a trap for my fellow libertarians. But I also see Bitcoin as a fulcrum to leverage, so I like it too.

I never felt more strongly in my whole life about being determined to use my skills to defeat a competitor.

[AnonyMint]

This is an interesting point.  In the long run, this IRS opinion that miners need to report income when they mine, is frankly absurd, and will definitely be reversed in a tax court, if they don't revise it before then.

How do you figure? The network is paying them for their services of mining. Seems correct to me and it is the ruling I expected and predicted since long-time ago.

I can freely produce a work with a market value, and the act of production does not result in a taxable event, in every precedent case.  Selling the work produces a taxable event.

Mining isn't producing a unique work. It is providing a repetitive service that is scripted by the network. The litmus test is that the network is the manager, not the miner. The network sets the difficulty, the protocol, etc..

A network cannot pay you anymore than a gold mine can pay you.  You book a profit when you sell the gold you mined.  Your paint box does not pay you when you paint a picture.  When you sell the picture, a taxable event occurs.

Gold miner you are your boss. You make all the management decisions.

[RAJSALLIN]

Just make an anonymous coin and the problem is solved for now.

It does not remove the tax liability, all else being equal.  It may reduce the probability of compliance.  Whether that is a good thing is hotly contested.  Your position seems clear, at least.

I ran some polls. Perhaps 25 - 40% of Bitcoin users are ready to give their middle finger to the government if they feel confident in doing so. Others see working with the government as the only viable future.

I don't see how Bitcoin can go mainstream without the government removing the tax issue. I don't think technology can solve it for the masses.

So I already assume that either Bitcoin will become a government fiat, or it will peak when it reaches saturation in the current speculator demographic (we are not near that).

The wildcard is some application of Bitcoin that compels the masses to use it, perhaps some social networking application. But what if that application requires some feature Bitcoin doesn't have. Or it might be offchain.

P.S. I will be actively trying to make that happen and trying to make Bitcoin fail. But I probably can't do that. I hate Bitcoin in some sense because it already has 50% of mining at one pool and controlled by ASICs and I see it as a trap for my fellow libertarians. But I also see Bitcoin as a fulcrum to leverage, so I like it too.

I never felt more strongly in my whole life about being determined to use my skills to defeat a competitor.

Even if you are correct the US isn't the only country in the world.

[rpietila]

I believe you are too preoccupied with USD. The feedback loop of (lower USD price -> less users -> even lower price) has never before held true with Bitcoin, and I have no reason to believe it would now.

What about 2011?

In between 7-11/2011, the number of non-dust addresses grew by 30%.

Even if we assume that there is such a negative feedback loop, 2011 was a proof that it was reversed and did not self-immolate.

So far we have one vicious bear market that was reversed, and 5 years of gains. My theory is that Bitcoin has a self-reinforcing positive loop which will eventually consume fiat totally, and all the bear markets are temporary. If you say otherwise, the burden of proof is on you because such an assertion is not supported by neither history nor reason.

[jmw74]

Yes I am disputing it because it was state law versus the Constitution. And it was a change from the long standing hands off policy on all mail order that crossed state lines. Nobody took it seriously because they know the state is impotent and there was no tracking of everything back then. Certainly the states don't have the ability to track what is happening on the internet.

Also sales taxes are not personal income taxes. They are ad valorem. The only people that get prosecuted over sales taxes are the merchants, not the consumer.

And besides that was a long time ago and the USA has morphed significantly of recent.

You just got through explaining how people are idiots and don't understand anything.  Now you're saying they understand the finer points of constitutional law and taxes and penalties for not reporting.

When someone says, make sure you file your Schedule D, they will say shit I don't need no Bitcoin.

Bitcoin is not 1/100 as compelling as a currency as getting their goodies from Amazon. Your strawman you see.

That is as a currency. Now as a speculation for investment, those who are up for that won't be deterred by capital gains. They want capital gains. I was talking about the impact on the masses of this tax ruling and the effect it will have on sentiment being negative for while until something turns attention back to the "to the moon" theme that is Bitcoin entire reason to exist.

Well how compelling is it?  You seem to be boxing yourself in - it's compelling enough that having to pay CG tax will hurt its adoption, but not compelling enough for people to either track their purchases or ignore the IRS?

Instead of ad hominem useless comment how about actually telling me why you are qualified?

I actually made software for the mainsteam (1 million of them twice) and supported them over the phone and email.

If you want to put me on ignore, just do it. What is this fucking political BS every time you disagree with my right to express my thoughts?

The software issue is you don't understand how even what seems simple to you, is not simple for the masses. That is why I asked what kind of experience you have in the industry.

The software "issue" is just you trying to argue from authority and hoping no one else sees through it.

When I have to report capital gains, do you think I record all that stuff myself?  No.  I go to turbotax.com, type in the name of my brokerage and credentials and it imports it all for me.  Software.  There's nothing fundamentally different about bitcoin that it can't be reported the same way.

Average people (who generally have a pretty simple tax return) either do something like that, or they just fudge it.  In the appropriate 1040 box, they'll just make up some bullshit number that's close enough.  Millions of people do that every year, nobody goes to jail because it's small potatoes.  The IRS might have an agenda to destroy bitcoin, but they do not give a crap about a few bucks on low income tax returns.

[BitChick]

So Risto,  What are your feelings at the moment?  I assume now is a great time to buy.  When do you think the next rally will take place and what is your estimation on when we will reach the next ATH?  What do you think the next ATH will be?

I was thinking that I was surprised, yet again, that you were right about how the price was too high and that we would correct down to $400 or so. Yet here we are.  When do we just shut up and stop questioning you? 

[rjp55]

I give credit to Risto for taking all the abuse from people that he does and doing so in a mature manner. He works hard on his TA and shares it for free with the crum bums on this board and all they do is challenge him. Imo he's one of the 5-10 people on this board who are actually worth reading.

[Ultros]

I give credit to Risto for taking all the abuse from people that he does and doing so in a mature manner. He works hard on his TA and shares it for free with the crum bums on this board and all they do is challenge him. Imo he's one of the 5-10 people on this board who are actually worth reading.

Agreed.

[rpietila]

So Risto,  What are your feelings at the moment?  I assume now is a great time to buy.  When do you think the next rally will take place and what is your estimation on when we will reach the next ATH?  What do you think the next ATH will be?

I was thinking that I was surprised, yet again, that you were right about how the price was too high and that we would correct down to $400 or so. Yet here we are.  When do we just shut up and stop questioning you? 

- I think it is much more probable (70%) that 400 will hold vs. not. Even if it goes lower, it does not change anything except that price is better for buyers and worse for sellers. There is still exactly the same number of bitcoins in the market and the viability of the technology is exactly the same.
- Yes, it is a great time to buy. If you are thinking of buying bitcoins, you should do it now. Even if you were not thinking, the price is good.
- The tribulation is likely over in a week, at most the sub-500 prices persist until past April 15 (tax sales). In the end of the month we are definitely over 500, probably about at 600.
- We are now at -0.3 log-units in the long term trendline. This situation will persist until the next uptrend launches. Note that the trendline ascends 23% per month and it drags the price up with it.
- After about 2-3 months, we are near 1000 and there is a hurdle to get over it. It succeeds and the rally is ignited, catapulting us to a new ATH of 3000-7000 in July-August. From taking the old ATH of 1163 to making the new, it is only 20-40 days.

Always happy to help

[MatTheCat]

I give credit to Risto for taking all the abuse from people that he does and doing so in a mature manner. He works hard on his TA and shares it for free with the crum bums on this board and all they do is challenge him. Imo he's one of the 5-10 people on this board who are actually worth reading.

Risto's posts are amongst those that I generally read through well. Most of the rest on here (unless post is short and happens to catch my eye), I don't bother even reading cos I know exactly the drivel to expect and don't want to waste mental energy trying to make sense of it. Worst of all are the drivel merchants who aggrandise their drivel with fancy jargon and complex concepts. There has been one in particular who has been at large (aminorex) recently in this thread that has resulted in the past few pages here being a total skim read for me....unless I see a poster with a reliable track record of good posts.

[David Rabahy]

My non-retirement Bitcoins were acquired on the following dates;

April 25, 2013
April 26, 2013
May 2, 2013
May 7, 2013
May 17, 2013
May 23, 2013
June 4, 2013
June 6, 2013
June 14, 2013
July 1, 2013
July 2, 2013
July 24, 2013
August 13, 2013

At prices ranging from $85/BTC to 144.49/BTC.

Each of those same dates in 2014 is when the corresponding Bitcoins reach the ripe old age of 12 months and become eligible to be treated as long term capital gains.  My plan is to sell enough of these to finish getting my original stake back (to satisfy my family and friends and keep them from nagging me).

At the same time my plan is acquire additional Bitcoins into my Roth IRA retirement account.

So, I want the Bitcoin exchange rate to be as high as possible on each of the dates given above in 2014 in order to reduce the number of Bitcoins I need to sell but at the same time I want the lowest possible exchange rates on the days in-between so that I can acquire the maximum number of Bitcoins.  Who can arrange this for me?  

[tarmi]

So Risto,  What are your feelings at the moment?  I assume now is a great time to buy.  When do you think the next rally will take place and what is your estimation on when we will reach the next ATH?  What do you think the next ATH will be?

I was thinking that I was surprised, yet again, that you were right about how the price was too high and that we would correct down to $400 or so. Yet here we are.  When do we just shut up and stop questioning you? 

There is still exactly the same number of bitcoins in the market...

not true.

[BitChick]

So Risto,  What are your feelings at the moment?  I assume now is a great time to buy.  When do you think the next rally will take place and what is your estimation on when we will reach the next ATH?  What do you think the next ATH will be?

I was thinking that I was surprised, yet again, that you were right about how the price was too high and that we would correct down to $400 or so. Yet here we are.  When do we just shut up and stop questioning you? 

- I think it is much more probable (70%) that 400 will hold vs. not. Even if it goes lower, it does not change anything except that price is better for buyers and worse for sellers. There is still exactly the same number of bitcoins in the market and the viability of the technology is exactly the same.
- Yes, it is a great time to buy. If you are thinking of buying bitcoins, you should do it now. Even if you were not thinking, the price is good.
- The tribulation is likely over in a week, at most the sub-500 prices persist until past April 15 (tax sales). In the end of the month we are definitely over 500, probably about at 600.
- We are now at -0.3 log-units in the long term trendline. This situation will persist until the next uptrend launches. Note that the trendline ascends 23% per month and it drags the price up with it.
- After about 2-3 months, we are near 1000 and there is a hurdle to get over it. It succeeds and the rally is ignited, catapulting us to a new ATH of 3000-7000 in July-August. From taking the old ATH of 1163 to making the new, it is only 20-40 days.

Always happy to help

Already bought a small amount.    Unfortunately we are not that liquid in our fiat right now with all of our "disposable" income tied up in BTC already.

It is funny how when we are in the rallies, or close to the ATH how easy it is to get blinded to reality.  Every time we experience the crazy increases in price I think to myself, "What if it just keeps going!?"  I never expect the price to drop, and I can't even imagine it going down to less than half of what the price is.  I am not sure if it is the optimist in me or I just enjoy seeing the value of BTC going up that I am in total denial of reality. BitChicksHusband is trying to prepare me to systematically sell during the next rally.  We can buy back a small percentage if (or should I say when) the price corrects.  It really is the smarter way to take advantage of the ups and downs.  For now we have just been holding through them but there are things that I really need the funds for pretty soon here.  (braces for one kid, a mission trip to India, etc. . . )  Thankfully July and August is not that far away!  It should be fun!  

[podyx]

When do we just shut up and stop questioning you? 

this is what I have done

I've come to conclusions that risto is the one who makes most sense on this forum with a couple of perma bulls after him

[BitChick]

So Risto,  What are your feelings at the moment?  I assume now is a great time to buy.  When do you think the next rally will take place and what is your estimation on when we will reach the next ATH?  What do you think the next ATH will be?

I was thinking that I was surprised, yet again, that you were right about how the price was too high and that we would correct down to $400 or so. Yet here we are.  When do we just shut up and stop questioning you?  

- I think it is much more probable (70%) that 400 will hold vs. not. Even if it goes lower, it does not change anything except that price is better for buyers and worse for sellers. There is still exactly the same number of bitcoins in the market and the viability of the technology is exactly the same.
- Yes, it is a great time to buy. If you are thinking of buying bitcoins, you should do it now. Even if you were not thinking, the price is good.
- The tribulation is likely over in a week, at most the sub-500 prices persist until past April 15 (tax sales). In the end of the month we are definitely over 500, probably about at 600.
- We are now at -0.3 log-units in the long term trendline. This situation will persist until the next uptrend launches. Note that the trendline ascends 23% per month and it drags the price up with it.
- After about 2-3 months, we are near 1000 and there is a hurdle to get over it. It succeeds and the rally is ignited, catapulting us to a new ATH of 3000-7000 in July-August. From taking the old ATH of 1163 to making the new, it is only 20-40 days.

Always happy to help

And these are based on what?

-400 will not hold, it's going to be a long slide bear behavior til below 100$
-buying or selling are irrellevant...
-2-3 months will be around 100-200$
-we will never see four figers again...

I sold all. Game over.

Dude.  Risto just bought a castle in Estonia. I think that in itself should lend some credit to him being "good" at this.  Not to mention he has been right over and over and over again in his predictions.  

Why are you so sure 400 will not hold?  What is your reasoning based on?  Please tell!

Do yourself a huge favor and at least buy some back!  You don't have to listen to me, but so far the only real regrets I have is not following Risto's advice more often.  I own much thanks to him for not getting too emotional during the dips!  I have not sold out of panic because he seems to remain calm in "all weather."  In fact, if we can learn how to manage the ups and downs we can be thankful for them and use them to our advantage.

[RAJSALLIN]

Clarification on the tax issue from a US tax attorney.

http://www.reddit.com/r/Bitcoin/comments/21una0/i_am_a_tax_attorney_here_is_the_truth_about_1099s/

Thought it could be valuable since some of the posters here seem to have it slightly wrong.