Explain Bitcoin Please

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JBoone

Social climber
NC
Feb 4, 2019 - 08:51pm PT
Random tax fact.

Crypto miners, even individuals, are subject to ordinary tax rates plus self employment tax to boot (on mined bitcoin).
Jon Beck

Trad climber
Oceanside
Feb 4, 2019 - 10:38pm PT
Crypto miners, even individuals, are subject to ordinary tax rates plus self employment tax to boot (on mined bitcoin).

maybe or maybe not, the statement is an over simplification, when in fact it is far more nuanced.

If mining is a hobby then no self employment tax.

Does a landlord have to pay self employment tax on rental income?
Only if the rental is a business, begs the question when does it become a business?

Does a gambler have to pay self employment taxes on net winnings?
Only if you are a professional gambler, whatever that is

Any smart miner is going to mine the bitcoin as a separate entity such as a corporation and eventually cash out as capital gains scam at a lower rate.
Rudder

Trad climber
Costa Mesa, CA
Feb 5, 2019 - 03:37am PT
Another take on Bitcoin:

I believe that anyone that has held Bitcoin since it's inception in 2009, for at least 3 years, has multi X'd their money. Even now, if you had bought it 2 years ago and held until today you would have tripled your money.
Reilly

Mountain climber
The Other Monrovia- CA
Feb 5, 2019 - 07:38am PT
That says nothing unless you are one of the lucky few. I would wager good money that
most people have lost money. And if you put more than a few percent of yer net worth into
it you were gambling, not investing. Well, it doesn’t matter how much you put in, it was
still gambling.
Banks

Trad climber
Santa Monica, CA
Feb 5, 2019 - 11:33am PT
That says nothing unless you are one of the lucky few. I would wager good money that
most people have lost money. And if you put more than a few percent of yer net worth into
it you were gambling, not investing. Well, it doesn’t matter how much you put in, it was
still gambling.

Most types of investing are gambling to one degree or another. Saying that buying Bitcoin is just gambling and bad, while much of what goes on in Wall Street is "investing" and good, is disingenuous at best.

There are more than the lucky few. There has been(and still is) plenty of opportunity to make money in Bitcoin. The Bull/Bear cycles have made it quite simple, you just need to not be a moron. This scenario has played out several times in my years in Bitcoin:

Bear Market
Me- You should consider buying some Bitcoin
Friend- No way, its a scam.

Top of Bull Market
Friend- I'm thinking of buying some Bitcoin, can you help me?
Me- Don't be stupid. Not now. Wait.
Friend buys Bitcoin anyway.

Bear market
Me- Now would be a good time to buy some Bitcoin.
Friend- No way. Its a scam. I got wrecked last time.

New ATH for Bitcoin
Friend- I'm thinking of buying some Bitcoin.
Me- Face palm.
Friend- FU. You just got lucky.
Me- Yep, its just luck.

A greedy sucker is born every minute - zero sympathy.

Why do you invest in anything? To make money of course. Why do people invest in Bitcoin? Many do because they believe in the philosophy and technology behind it and of course because they hope to make money.

Why is your pursuit of gains ok yet the person who chose to invest Bitcoin a greedy sucker?
Reilly

Mountain climber
The Other Monrovia- CA
Feb 5, 2019 - 12:05pm PT
Why is your pursuit of gains ok yet the person who chose to invest Bitcoin a greedy sucker?

Who said anything remotely close to that? A sacrosanct law of ‘investing’ is that you NEVER put more than 5% of your ante in any one thang, unless you’re comfortable with losing it. I aver that a lot of those into Bitcoin are in for over 5%. If you don’t know about the 5% Rule then you’re not an investor.
Banks

Trad climber
Santa Monica, CA
Feb 5, 2019 - 12:39pm PT
Who said anything remotely close to that?

You did. You responded to stevep post about investors possibly losing their funds from a Canadian Bitcoin exchange. You said you had no sympathy for them and called them greedy suckers. You have no idea how much of their portfolios they allocated to investing in Bitcoin. Your constant attempts to portray Bitcoin investors as greedy gamblers is akin to your average touron thinking climbers are just adrenaline junkies.
stevep

Boulder climber
Salt Lake, UT
Feb 5, 2019 - 01:06pm PT
Well, I'd say there's some difference between investing in the stock of a company that actually produces things. You can look at the company's performance, composition and the market that they are in.
That type of analysis is much harder or impossible for cryptocurrencies. Level of risk and volatility is much higher.
Banks

Trad climber
Santa Monica, CA
Feb 5, 2019 - 01:32pm PT
Bitcoin was born in part as a response to the banking crises in 2008. Many people who invest in Bitcoin are tired of central bank shenanigans and the devaluing of fiat currencies. There is value in having a borderless,permissionless, decentralized, censorship resistant form of currency. What is that value? I don't know, only time will tell,but I am willing to put my money where my mouth is.
Ed Hartouni

Trad climber
Livermore, CA
Feb 15, 2019 - 10:13am PT
JPMorgan Chase Moves to Be First Big U.S. Bank With Its Own Cryptocurrency

'In 2017, Jamie Dimon, JPMorgan Chase’s chief executive, declared Bitcoin a “fraud” and said that any employee caught trading it would be fired for being “stupid.”

On Thursday, JPMorgan became the first major United States bank to introduce its own digital token for real-world use, the latest step in Wall Street’s evolving approach to the blockchain technology that underpins cryptocurrencies like Bitcoin and Ether.

Despite questioning Bitcoin’s legitimacy, Mr. Dimon has said he recognizes blockchain’s potential in the future of the global financial system. And JPMorgan has already released a blockchain platform, Quorum, that several institutions are using to keep track of financial data...'
Reilly

Mountain climber
The Other Monrovia- CA
Feb 15, 2019 - 10:53am PT
Your constant attempts to portray Bitcoin investors as greedy gamblers is akin to your average touron thinking climbers are just adrenaline junkies.

Yer inability to see the truth in both those portrayals shows there’s no hope for you. Sorry.
Yes, banks suck, but at least you can usually get yer money out of them.
Banks

Trad climber
Santa Monica, CA
Feb 15, 2019 - 12:11pm PT
Yer inability to see the truth in both those portrayals shows there’s no hope for you. Sorry.
Yes, banks suck, but at least you can usually get yer money out of them.

Yes, there are people in Bitcoin just hoping to get rich quick just like there are climbers who are adrenaline junkies. But there is a whole lot more going on with Bitcoin just like there is a whole lot more to climbing than just what the public thinks. Perhaps it is your inability to see past the click bait headlines that is holding you back from seeing the bigger picture.

Banks

Trad climber
Santa Monica, CA
Feb 15, 2019 - 12:22pm PT
JPMorgan Chase Moves to Be First Big U.S. Bank With Its Own Cryptocurrency

'In 2017, Jamie Dimon, JPMorgan Chase’s chief executive, declared Bitcoin a “fraud” and said that any employee caught trading it would be fired for being “stupid.”

On Thursday, JPMorgan became the first major United States bank to introduce its own digital token for real-world use, the latest step in Wall Street’s evolving approach to the blockchain technology that underpins cryptocurrencies like Bitcoin and Ether.

Despite questioning Bitcoin’s legitimacy, Mr. Dimon has said he recognizes blockchain’s potential in the future of the global financial system. And JPMorgan has already released a blockchain platform, Quorum, that several institutions are using to keep track of financial data...'

Yes, pretty funny but not unexpected. I had mentioned last year that all the negative talk from bankers about Bitcoin and crypto was just a smoke screen while they were feverishly working behind the scenes to get in on the action.

Of course, JPMorgan Coin has nothing to do with Bitcoin and other cryptocurrencies. Bitcoin is permissionless, trustless, decentralized and borderless. JPMorgan Coin is permissioned, trusting, centralized and bordered.
Reilly

Mountain climber
The Other Monrovia- CA
Feb 15, 2019 - 12:52pm PT
it is your inability to see past the click bait headlines that is holding you back from seeing the bigger picture.

Dood! Grab a paper bag and breathe into it! Nice and easy. Yer taking this way too seriously! Besides, what you are also missing is that I’m trying to help you. Really!

The “big picture”? That nitcoin is gonna save us from the evil banks?
Banks are just a fact of life - deal with it.

The “big picture” that zitcoin is a rational investment? What else am I missing? Do tell.
If it is so clear to you then you should be easily able to explain it to a crankloon.
Start with why I need (or should want) Bitchcoin. Remember, make it simple.
EdwardT

Trad climber
Retired
Feb 15, 2019 - 01:27pm PT
Yes, there are people in Bitcoin just hoping to get rich quick just like there are climbers who are adrenaline junkies. But there is a whole lot more going on with Bitcoin just like there is a whole lot more to climbing than just what the public thinks.

I have no idea about what's going on with bitcoin, other than it's steadily dropped in value over the last 14 months.

Bitcoin futures began trading on 12/17/17. It traded right up to $20,000 on that date. Today, it's trading at $3555.
stevep

Boulder climber
Salt Lake, UT
Feb 15, 2019 - 01:39pm PT
Chase is using a blockchain technology to back a method for doing very large international monetary transfers faster and in a more on-demand way than is possible with SWIFT.
This is not a cryptocurrency and is neither a consumer tool or an investment vehicle.
Banks

Trad climber
Santa Monica, CA
Feb 15, 2019 - 02:50pm PT
EdwardT- Nice cherry picking just like in the climate change thread. Bitcoin started 10 years ago at a fraction of a penny. It continues to make higher highs and higher lows during it's cycles. It's doing just fine.

SteveP- I agree. Calling it a crypto is a joke, but they sure are marketing it that way. Replacing Swift is long overdue. XRP was hoping to do that, but now is dead man walking(which is a good thing), with Chase entering the field.

Reilly- I get that you like to troll, but when you post lazy, incorrect articles or say a bunch of nonsense, I'm going to respond because there are people who read threads for information. You may think it's a bunch of crap, but others may not. Heck, even the doubters may learn a thing or two.

You say "banks suck, deal with it". Well, other people don't want to just deal with it. We believe there is better concept of what we call money and how the banking system works. Every generation from now on will grow up in a digital world and look back on current money and banking like we look back at trading beads and shells.

Why Bitcoin? Because I don't need anybody's permission for how, where, when and why I use it. I don't need to trust someone else to hold it for me. It is censorship resistant and can't be confiscated. It is borderless, I can take it anywhere. You may not care about any of these things, but plenty of do.
NutAgain!

Trad climber
South Pasadena, CA
Feb 21, 2019 - 01:43pm PT
https://www.technologyreview.com/s/612974/once-hailed-as-unhackable-blockchains-are-now-getting-hacked/


Look carefully at the 51% hacks, and what that means for who is going to best be able to game the system.

This concept would seem to indicate that the largest cryptocurrencies are going to be the most protected from these attacks and thus more safe place to park money. It would indicate some market pressures for different exchanges to consolidate for the protection of scale.

But look how the U.S. military outspends the world to effectively deal with the same thing- to be able to maintain control. Don't you think someone is out there trying to do the same thing with even the biggest cryptocurrencies? If you combine brute force compute with espionage to control other bitcoin miners, seems like someone with a lot more money than moral inhibitions and a decent vision can make a huge multiple return on their investment.


Even if currencies try to roll back to an earlier time point before a hack, there are going to be winners and losers and not all participants will want to roll back, and it will trigger a fork like the Etherium vs. Etherium Classic. This process itself renders all participants more vulnerable to future attacks because it takes less compute power to dominate the two smaller distributed databases that remain.
formerclimber

Boulder climber
CA
Feb 21, 2019 - 02:24pm PT
Why Bitcoin? Because I don't need anybody's permission for how, where, when and why I use it. I don't need to trust someone else to hold it for me. It is censorship resistant and can't be confiscated. It is borderless, I can take it anywhere. You may not care about any of these things, but plenty of do.

Is this so? Exchanges and places that sell coins in general have restrictions on who can trade/buy there and want to ID the person even heavier than banks do for new accounts now. Many won't deal with Americans at all.
Coins can be confiscated for sure...in a sense that court can order to pay USD, and then it's your problem if you want to cash out your coins or get the money somewhere else: they'll get it. Taxes on multiple currencies trading are going to be a nightmare, since recently, by the way. Governments ain't fools to let the shadow economy get too big and let tax revenue escape... If cryptocurrencies stay, they'll be regulated and tracked as much as regular currencies, eventually.
Banks

Trad climber
Santa Monica, CA
Feb 21, 2019 - 03:56pm PT
Is this so? Exchanges and places that sell coins in general have restrictions on who can trade/buy there and want to ID the person even heavier than banks do for new accounts now. Many won't deal with Americans at all.
Coins can be confiscated for sure...in a sense that court can order to pay USD, and then it's your problem if you want to cash out your coins or get the money somewhere else: they'll get it. Taxes on multiple currencies trading are going to be a nightmare, since recently, by the way. Governments ain't fools to let the shadow economy get too big and let tax revenue escape... If cryptocurrencies stay, they'll be regulated and tracked as much as regular currencies, eventually.

Coinbase alone has over 25 million accounts, so plenty of Americans are willing to deal with the hassle to own some Bitcoin. That being said, there are plenty of ways to buy, sell, trade Bitcoin without ever having to dox yourself.

Nice try on "confiscating" Bitcoin.

Of course the government wants their piece, and they will get some by blending it into the fabric of Wall St. But Bitcoin has no CEO, no corporate HQ, no nation or board of directors. You might be able to regulate it somewhat in between your own borders, but good luck with the rest of the world.
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