In my recent involvement with bitcoin miners, their understanding is that its here to stay simply because its implosion would cause too much damage. There is just too much Wall Street, PE and public money in it at this point. It's just a matter of working with Caesar to see how he gets paid.
That Bitcoin is here to stay? That qualifies as delusion, to me I wouldn't trust anyone that made that statement and only backed it up with "too much Wall Street, PE, and public money..". Bitcoin itself hadn't been embedded into nearly enough systems to have such a claim (antithetically, just a while ago I tried to buy something from a major merchant online with Bitcoin and ended up just using credit card because the two largest Bitcoin-as-payment companies (taking either side of the transaction, in this case) don't want to work with each other, it seems. I didn't have any other Bitcoin wallet at-the-ready to make the payment from..).
Your prerogative, although personally I am more inclined to listen to those people than some guy named Bryan who refutes said idea with some personal micro-anecdote about having a bad experience with a few vendors.
Insatiable institutional greed > current technology issues. Sometimes it takes a while before the ultimate players emerge and things get rigged properly.
Calling my recent experience a "micro-anecdote" seems pretty disingenuous.
So how much "Wall Street, PE, and public" money is "in it" at this point? And of these market actors, are all parties making the same bets?
Greed is a powerful motivator, and it seems good for snowballing the acceptance of something like Bitcoin, but I don't see how it means Bitcoin is here to stay.
I can attest that I was sincere when I referred to your experience as a "micro-anecdote". If you believe your experience to be otherwise, its mostly likely a result of differing views of your basic significance in the universe, which is wholly understandable in this context. If your experience was to be found as one that many other Bitcoin users are also having (which I would have to believe is the case), it would no doubt impute an added dimension, at which point I would remove the "micro" affixation.
Now, to clarify. I didn't say Bitcoin is here to stay. Its' what I was told by some people who are investing in it. I honestly have no idea if its going to stay. But when confronted with two disparate views on the topic, I am personally going to lean towards the one that takes into account a powerful, heavily invested minority lurking in the background as opposed to the one based on a less than satisfactory consumer experience.
RE: your name. I'm assuming that you understand that it's use was employed for effect as opposed to an expression of a real feeling or belief towards those who find themselves going through life reflexively turning their heads when hearing it. That being said, in order not to appear disingenuous, your question leads me to admit that I do hold an irrational bias against those with the name, a bias that apparently increases when it is discovered that a person bearing said name utilizes the "y" as opposed to the "i" when spelling it out.
So did anyone report Bitcoin transactions on their taxes this year? I was able to use bitcoin.tax for free, for some reason (used it at end of last year... maybe they set it as free during that time), and it did a mostly good job.
I filed an extension (plus payment) so I'm still debating on how to handle reporting the gains. 8949 box F _seems_ to be the way for me, but do I really have to put every single transaction or can it just be an aggregation? I know IRS has guidance here, but wonder about it in practice... how would they penalize me for not understanding? And do I have to say "Bitcoin sell" or could I say something like "sell of digital assets" or "currency exchange" or simply "sell of capital assets" to avoid government searching/filtering for "bitcoin" or "crypto" etc. but also avoid undue scrutiny.
I did a relatives taxes recently who had bought a low 4 figure amount of bitcoin in Canada, transferred the bitcoin to an exchange in Boston USA and then traded some of the bitcoin for other crypto currencies. He made a profit but it was all luck of course. The problem from a tax perspective is that, based on Canadian tax conventions, crypto currency transactions are considered barter for him. This means that every trade where he had a gain goes to his taxes as a capital gain. Another crap deal is that if he buys stuff with crypto there's a potential for cap gain/loss and also the sales tax aspect. Luckily he didn't do this, thanks goodness. The Boston exchange he used had crappy history on his trades and shitty reporting. They didn't have any report that even kept a running balance in BTC of all his transactions. Looked like the site was slapped together with duct tape and coffee by a couple of over caffeinated code monkeys who could care less about tax accounting, go figure. They denominated all of his trades in BTC (bit coin) but couldn't produce a history of daily bitcoin to USD rates on the exchange for 2017. I was required to convert his transactions into bitcoin (using at lease daily rates) then into USD and finally to CAD. I had to download a history of bitcoin prices in USD from another site and use that as an estimate. Doing his bitcoin transactions took me longer than doing both my and my wife taxes, probably twice as long. I told him he'd need pay to have a different accountant do his taxes next year. I am not doing that crap again, I am not a tax accountant. I told him I'd fill out the forms but he'd need to submit the taxes under his own name and would take full responsibility for the figures. I even plugged the numbers into two different tax software packages to makes sure the end result was the same. If he gets audited it's going to be a grey area that cannot be resolved easily without just accepting some assumptions which tax auditors won't like to do, could be a huge time suck for him.
I'm pretty pleased with https://bitcoin.tax honestly. I would recommend it to anyone that doesn't want to handle it themselves, even though it might cost a bit. I found it pretty fast, accurate, and clear. I assume Intuit or a similar company might eventually acquire it or make their own.
fwiw, I've noticed more places online (especially small shops) than ever accepting Bitcoin and others. I think this (Intercontinental Exchange getting in) is the biggest news I've read in recent months.
A few snippets from the article:
The founding imperative for Bakkt will be to make Bitcoin a sound and secure offering for key constituents that now mostly shun it—the world’s big financial institutions. The goal is to clear the way for major money managers to offer Bitcoin mutual funds, pension funds, and ETFs, as highly regulated, mainstream investments.
...
“Coinbase has twice as many customers as Charles Schwab,” says Loeffler. “Many of the people who have opened accounts on Coinbase are millennials who use it to make small investments in crypto-currencies.”
...
So why aren’t the Vanguards and Blackrocks taking a “serve them and they shall come” approach? For Sprecher and Loeffler, the reason is fundamental—and fixable. “Two things are missing,” says Sprecher. “Trading on an official exchange, and safe storage for digital currencies on an institutional scale.”
Put simply, Sprecher says, the big money managers won’t create digital currency funds unless they can first buy the tokens on a federally regulated exchange, and, second, store the tokens for their investors in accounts rendered super-secure by the safeguards provided overseen by federal regulators.
...
Bakkt would provide the first fully-integrated package combining a major federally-regulated exchange, as well as with the clearing and storage overseen by the exchange. ICE owns six clearing houses that are vertically-integrated with ICE Futures U.S. and its other exchanges. By utilizing a CFTC regulated futures exchange for cryptocurrencies, Bakkt would provide two main layers of security that money managers regard as absolutely essential.
So another run at getting "big money" investing into BTC, this time with it directly using Bitcoin instead of some derivative.
As a compromise, I bought shares in CME which has gone all kinds of sideways during this time.
I think my relative might have gotten taken to the cleaners as well. He ended up trading into a bunch of "alt-coins" which were obliterated at the beginning of 2018. At one point he was amazed that his speculation had gotten so high, he didn't brag but would tell people in amazement how much he made. Haven't heard him talking about it lately so hopefully he sold out before he started losing money. Gotta love the die hard crypto people who are trying to re-rationalize this as yet another crypto winter that will be followed by a crypto spring where all the strong hands will get richer. When I was around 11-13 (1991-1993) there was a huge sport trading card speculative mania not as big as crypto but same idea. It got to the point where people like my Dad were buying entire complete yearly sets of these cards as long term investments. Needless to say our old trading cards were terrible investments at this point because of the massive increase in supply, at the time, of what was and is really an almost worthless piece of cardboard. Crypto is similar, it can be made for almost nothing and during the last mania people were just buying air out of FOMO.
Crypto won't actually succeed at the goal of being an alternative currency until it has managed to reduce the insane amount of volatility, yet this volatility is the reason many got/are getting into crypto in the first place. Seems almost like a catch-22 for crypto to catch on it needs many people using it, however the way it's getting many people into it is the exact reason it isn't able to succeed at it's goal of being an alternative to our current currencies.
The fact that the typical crypto investor is the type of person whose goal in life is to procure the maximum number of likes on Instagram tells you everything you need to know about cryptos.
more volume tends to decrease volatility. humans sometimes voluntarily accept new media of exchange. the counter example could be made: the government of Zimbabwe still stood behind their currency, yet their humans stopped accepting it. government backing is just one factor, if an important one. mostly in that governments can really fuck their currencies up, brute is not convinced they can do anything to bolster their currencies.
What kind of taxes do bitcoin miners pay? How are they taxed? (sorry if it's upthread and I missed it)
I'm surprised more utility companies haven't figured out how to make money by getting in the mining game yet, or more large factories or production facilities that have excess electrical capacity.
I wouldn't trust anyone that made that statement and only backed it up with "too much Wall Street, PE, and public money..". Bitcoin itself hadn't been embedded into nearly enough systems to have such a claim (antithetically, just a while ago I tried to buy something from a major merchant online with Bitcoin and ended up just using credit card because the two largest Bitcoin-as-payment companies (taking either side of the transaction, in this case) don't want to work with each other, it seems. I didn't have any other Bitcoin wallet at-the-ready to make the payment from..).
