I was listening to a Conspiracy Theory podcast and normally I listen to it for entertainment only.
Flat Earth is a starter pack for these loons.
However, today there was a guest who talked about bitcoin in a language that I actually understood for the first time.
I am considering putting a little bit a month (small enough that I won’t miss it).
I know @brobbs is a bitcoin proponent, anyone else?
And how would one go about it?
Coinbase is a successful and legitimate trading platform.
Get yourself a digital wallet and transfer your crypto every so often. Do not leave it in the control of an exchange. I currently use Edge.
If and when you ever sell, pay your taxes and disclose everything. Coinbase (as well as any other public access exchange) is subject to KYC & AML, like any bank. Uncle Sam knows everything.
Don’t be intimidated by the current six-figure price. It could jump massively, or drop massively, quickly or slowly, temporarily or permanently. Nobody knows.
Like CH used to say, use spare money. Don’t bet the farm or decrease your retirement/investment plan.
Reasonable enough?
Parrot, the IRS considers crypto to be property and not a collectible, so the gains/losses are considered capital gains/losses for tax purposes.
But not until sold correct?
next question
The way I understood the guy on the podcast, and correct me if I am wrong.
The “mining” is not creating more bitcoin, since there is a finite amount, it is creating equations to further secure it?
or exchanged for services.
Interesting.
So, if I paid for my meal at my local sushi restaurant (the only place I can think of that openly takes bitcoin as payment), how would they figure tax on that?
That’s the current law. I don’t know if you will receive a 1099, but you still have the tax liability.
Edit:
For your question, it is related to the value vs. cost of the coin use. If you use 1% of the coin for the meal. The gain/loss is the tax basis of the 1% you own, time owned and value used at the restaurant. The calculation of the tax basis is going to be complicated.
The mining is effectively unlocking the next coin. There is suppose to be a finite amount of 21 million coins. The mining utilizes high powered computers that consume a massive about of electricity. The closer they get to unlocking the 21 millionth coin, the harder the computers have to work to solve it. The key to successful mining is cheap electricity. The last coin is not anticipated to be mined until 2100’s.
The miners are effectively the “bankers”. They hold the ledger that verifies you have the funds. In order for you to sell your coins, you have to pay the bankers to verify the transaction. Think about this like a ATM fee. Fees can vary based on how fast you want your transaction posted. Don’t get this confused with the Bitcoin ATMs. These things have HUGE fees disguised in the conversion amounts. Coinbase is probably one of the safest out there other than having your own personal hardware wallet. Think about a hardware wallet as one that is not connected to your exchange and might take you some time to convert it back to fiat. It might be the safest as long as you never loose it. There are MILLIONS if not BILLIONS worth of bitcoin that are lost forever on hardware wallets.
Full disclosure here. I don’t have any crypto. I have friends that do and my company has a bitcoin mining department. I have been to our mining farms and it is quite impressive. Walls of computers and fans that are running 24/7. The power bill is staggering for all the computers to run.
There is HIGH risk with the crypto market. I wouldn’t bet the farm on it.
If you use an exchange like coinbase, I believe they track your basis and you would have a taxable gain or loss when you buy sushi. If you are DIY, you need to track your basis of every fraction of coin when you buy and when you sell. Its really about like trading a stock for your sushi. You bought it at X and sold it at Y. That difference is a taxable gain or loss.
Where might we find this amount of bitcoin? I can find gold at Fort Knox, but where would I go if I wanted to put my bitcoin in a safe deposit box?
The blockchain.
Your safe deposit box is your personal keys to your wallet that will access the blockchain ledger.
If you want to hold things in your hand, stick with metals. Or you can hold government debt on paper (commonly called cash) and watch it lose its value on a daily basis.
Well…I’m old and I’m gonna sit this out for the rest of my days. Just have trouble finding the “value” of an “investment” somewhere on the hard drive of an HP laptop.
I know…it’s not on my hard drive…it’s secured in the network. But if a cyberattck takes out the network…how do I get my ‘money’? If we don’t have gas - I can walk to the bank to get in my safe deposit box. but if the network is taken out - what happens to my investment?
I can’t explain it, like I said in my OP, this was the first time I heard someone talk about it in a way that I could understand.
The “network” exists across innumerable computers worldwide. It is not dependent on one or even a dozen or even a hundred servers.
A cyberattack that takes out the blockchain means end of days kind of circumstances.
Just like an interwar Germany, neither cash nor gold would do you any good there. You’d be hunting your own food, collecting water from whatever streams you could access, and picking berries.
And since I have been consistent in saying don’t use money you can’t afford to lose, I don’t have any sympathy for this closedminded Luddite attitude of yours.
People have been saying Bitcoin was worthless since the beginning. In 20 years, the value has climbed from fractions of a penny to over $100K, while the dollar is simultaneously pissing its value away every single day. Even the stock market’s current valuation is based on that debasement of currency.
Oh but sure, any day now it’ll collapse. 
This is the biggest challenge with Bitcoin. People just don’t understand it.
Rewind the clock 150 years, and people didn’t understand how an “industrial” economy was going to replace the family-based agrarian economy that employed the overwhelming majority of citizens.
Bitcoin’s second-biggest problem right now is that it is not functioning as a widespread and instantaneous medium of exchange (though it is reliable). The adoption is simply not there, and a big limitation is that mass adoption would hike up the transaction fees.
It is VERY possible that a superior invention would come out and decimate the value. They tried that with “Bitcoin Cash,” where the requisite processing power was raised for instantaneous transactions.
But it didn’t catch on, and the core Bitcoin lives on.
That is why I am serious about only using spare money. There is no guarantee.
But the way that governments purposefully and intentionally decimate their own currencies’ value means I am riding this thing out forever.
If I’m wrong, oh well. If I were putting all my eggs in this basket, then I’d rightly deserve any such crash.
That is kind of what this guy was saying.
BTW, his name is Tony Arterburn
Agreed.
You actually sound a lot like this guy.