Digital Currency

[Tacitus]

Crypto down lately. Kazakhstan is in revolt, and the internet was shut down there. I read that a major percentage of bitcoin mining (financial calculations) goes on in Kazakhstan (after China drove it out).

That made me think about the risk of crypto.

Then again, if the Internet is shutdown in the US, then all bets are off, aren't they. Where does my Fidelity account go, if I can't get to it via the internet? If I go to their nearest physical office, will they be able to let me have my savings if the Internet is down? Maybe?...I'm not so sure. Will I be able to withdraw from my local bank if the Internet goes down? Again, I'm not so sure. Seems like paper cash and precious metals will be the only thing left if the Internet fails. So, I will have those, too, but I can't put all my wealth in paper cash and precious metals.

Also, crypto is just a small piece of my portfolio.

I can't help buying at the major dips. I'm sure my wife is wondering, as she sees me making multiple purchases in the day, following each dip.

 

[Neb]

Crypto down lately. Kazakhstan is in revolt, and the internet was shut down there. I read that a major percentage of bitcoin mining (financial calculations) goes on in Kazakhstan (after China drove it out).

That made me think about the risk of crypto.

Then again, if the Internet is shutdown in the US, then all bets are off, aren't they. Where does my Fidelity account go, if I can't get to it via the internet? If I go to their nearest physical office, will they be able to let me have my savings if the Internet is down? Maybe?...I'm not so sure. Will I be able to withdraw from my local bank if the Internet goes down? Again, I'm not so sure. Seems like paper cash and precious metals will be the only thing left if the Internet fails. So, I will have those, too, but I can't put all my wealth in paper cash and precious metals.

Also, crypto is just a small piece of my portfolio.

I can't help buying at the major dips. I'm sure my wife is wondering, as she sees me making multiple purchases in the day, following each dip.

Agreed.

Inflation is summarized as...

Too much money chasing too few goods.

If the internet goes down many people will not have access to their investments or cash. There would be a lot less money chasing goods. Anyone with physical cash and PMs could be in the driver's seat.

Depend of the event



Ben

 

[bkt]

if the Internet is shutdown in the US, then all bets are off, aren't they.

You got that right. No internet, no credit card transactions, no ATM withdrawals, and it's questionable how in-person bank withdrawals could be handled.

The internet is used for many things and if it were to disappear, most everything would grind to a halt. That would be bad. Plan accordingly.

 

[Tacitus]

I thought this was interesting. Crypto being adopted in Venezuela to escape effects of inflation. Short vid.

 

[angie_nrs]

I thought this was interesting. Crypto being adopted in Venezuela to escape effects of inflation.

When they are short on alternatives, I'm sure crypto looks amazing to them.
I don't have a smart phone and have no intention on getting one. So, crypto wouldn't work for me.
I guess if I'm left with no other viable option, then I'd go with it....but until that happens, no crypto for me.

Unless.....there is a better crypto option out there that comes along that I can believe in. If it does, I might be a player then, but I need to know and to trust whomever is backing it first.

 

[Neb]

Data point

Was talking to the money guy last and he told about a fellow that he was talking with to learn about investing in cryptocurrency. Suspects the crypto guy lost 1/2M in the last couple ot weeks.

Too scary for this old guy.



Ben

 

[Tacitus]

Ugh. It is taking all my self control to not buy in more now.

My wife sees every purchase, as the money leaves our bank account. I buy in small amounts, on each dip. So, she sees multiple "withdrawals" from our account...which leads to questions to me. If I didn't have to spend emotional/marital capital every week to address her concerns, I'd be buying a lot more. Now is the time to buy.

Either the entire cypto-thing is going to go bust, or it will all bounce back this year. I'm willing to lose all the money I've put in, to gamble on the bounce. We'll see what happens.

 

[Supervisor42]

Data point

Was talking to the money guy last and he told about a fellow that he was talking with to learn about investing in cryptocurrency. Suspects the crypto guy lost 1/2M in the last couple ot weeks.

Too scary for this old guy.



Ben

It's a complicated ponzi scheme.
As long as there are plenty of new people showing up and tossing their money into the pot, it will flourish.
When they realize that the only money in the pot came from them, there will be a feeding-frenzy/bloodbath.
Last one out is a rotten-egg!
I am reminded of the great emu-farming fad that went thru down here.
Fertilized eggs sold for $300 each.
Lots of emus were sold for outrageous sums... to people that had heard how much money others were making.
There were emu farms everywhere! Heck, emus were worth $2,000 apiece!
Look! My investment is growing and multiplying!
In a few years, people realized that there was never an actual market for emus.
They had to pay people to take them away when they could no longer afford to feed them.

 

[Tacitus]

It's a complicated ponzi scheme.
As long as there are plenty of new people showing up and tossing their money into the pot, it will flourish. ... I am reminded of the great emu-farming fad....

You misspelled "The Fed."

I get what you are saying. But, somehow, I doubt Elon Musk is going to pull his money (sorry, "dollars") out when it is down like this. When the dollar falls, crypto will (ok, might) rise.

Or...not.

I'm not a true believer. But, I am willing to dabble. Which means I won't get rich, of course, because I'm not all in. I'm just trying to diversify away from the US dollar.

And, wow, crypto is down now. If gold were down like this, I would be backing the truck up.

Then again, gold isn't this volatile.

 

[Supervisor42]

You misspelled "The Fed."

I get what you are saying. But, somehow, I doubt Elon Musk is going to pull his money (sorry, "dollars") out when it is down like this. When the dollar falls, crypto will (ok, might) rise.

Or...not.

I'm not a true believer. But, I am willing to dabble. Which means I won't get rich, of course, because I'm not all in. I'm just trying to diversify away from the US dollar.

And, wow, crypto is down now. If gold were down like this, I would be backing the truck up.

Then again, gold isn't this volatile.

Well, the wife's aunt had dabbled in bitcoin in the early days and sold it when it hit an astronomical $1300 per coin!
Pretty sure she doubled her money.
Yea, I know.

 

[Supervisor42]

Just stumbled across this today...
Finally they have a cryptocurrency for us rednecks.
https://www.foxbusiness.com/lifestyle/brandon-brown-lgbcoin-sponsorship-nascar-ban

Brandon Brown signs '8-figure' LGBcoin sponsorship despite NASCAR ban
NASCAR Xfinity series driver can't advertise on his car.
"LGBcoin says its product "allows owners to digitally voice their support for America and the American dream" but cautions that it has "no intrinsic value."

I'm gonna look into those. May hafta get me a few.
I've watched people invest their hard-earned money in stupider stuff than that, like these things:

 

[BasejJack]

Good question! I have no idea, honestly. I have a few ancient ASIC scypt miners that are good for mining litecoin (which can be converted to other currencies). My understanding is you would want a fairly high-end GPU on a dedicated PC and that GPU will set you back well over $1000. So you will need to determine how much you can make per unit of time and when you can break even, after which time you can start to earn money.

Let me refine my previous statement. If I didn't already have the hardware for mining, I wouldn't go looking today to buy mining hardware, nor would I invest in crypto.

That doesn't mean you can't do it and that it can't be profitable fairly quickly. Just that I'm not a good advisor in this. I welcome others to chime in, though.

There are many software out there I like to store what I mine on Nexthash and invest with Bezel.

 

[Tacitus]

Open question: How do you spend your cryptocurrency?

Or, do you just buy and hold, or convert to cash?

 

[joel]

Does anyone day trade & is it a way to pass time or a money pit of horror ?

 

[Tacitus]

Does anyone day trade & is it a way to pass time or a money pit of horror ?

That has to be a tax nightmare.

I have such a small stake, I won't be taking profits any time soon.

I buy the dips, but I don't sell the rises. When I sell, it will be a major sale.

I have some stable coin for buying things online...but I haven't figured out how to use them yet.

My crypto-wealth is just a hedge/prep right now.

 

[Supervisor42]

That has to be a tax nightmare.
I have such a small stake, I won't be taking profits any time soon.
I buy the dips, but I don't sell the rises. When I sell, it will be a major sale.
I have some stable coin for buying things online...but I haven't figured out how to use them yet.

My crypto-wealth is just a hedge/prep right now.

So, how did you answer this question on last-year's, and this year's tax return?
Hint: If you told the truth, you get in trouble; if you lied, you get in big trouble.

(notice the different wording for 2021)

 

[Tacitus]

If you are a buyer, not a seller, then you can say no. When you sell, or exchange one cryptocurrency for another (which I have not done), then you may have to say yes. "Otherwise acquire" doesn't seem to include buying...at least, according to the IRS website, which hopefully we can trust:

Q5(a). The 2021 Form 1040 asks whether at any time during 2021, I received, sold, exchanged, or otherwise disposed of any financial interest in any virtual currency. During 2021, I purchased virtual currency with real currency and had no other virtual currency transactions during the year. How do I answer the question on the Form 1040? (added March 10, 2022)
A5(a). If your only transactions involving virtual currency during 2021 were purchases of virtual currency with real currency, you are not required to answer “yes” to the Form 1040 question, and should, instead, check the “no” box.

https://www.irs.gov/individuals/int...ed-questions-on-virtual-currency-transactions

 

[joel]

So what is the best brokers for day trading or crypto.
I understand they are not the same.

 

[Tacitus]

So what is the best brokers for day trading or crypto.
I understand they are not the same.

Not sure. I use Coinbase. In hindsight, I would go to Coinbase Pro directly, and skip the base level service.

I think Coinbase Pro has more purchase options. With Coinbase, you have to constantly watch the market; I think Coinbase Pro allows limit orders.

Also, I think Coinbase has a deal with TurboTax. But, the data I downloaded regarding my purchases was not in the most helpful form. I would like to think they will get better, even by next year.

 

[Supervisor42]

If you are a buyer, not a seller, then you can say no. When you sell, or exchange one cryptocurrency for another (which I have not done), then you may have to say yes. "Otherwise acquire" doesn't seem to include buying...at least, according to the IRS website, which hopefully we can trust:

Q5(a). The 2021 Form 1040 asks whether at any time during 2021, I received, sold, exchanged, or otherwise disposed of any financial interest in any virtual currency. During 2021, I purchased virtual currency with real currency and had no other virtual currency transactions during the year. How do I answer the question on the Form 1040? (added March 10, 2022)
A5(a). If your only transactions involving virtual currency during 2021 were purchases of virtual currency with real currency, you are not required to answer “yes” to the Form 1040 question, and should, instead, check the “no” box.

So it's like buying stock. You can buy all you want, no problem.
If the stock goes up in value, no capital-gain problem if you don't sell*.
But I can tell you that the IRS machines are very good at keeping track of it, and I can bet you that they will crack open every crypto-egg and have a look inside of it pretty soon.
Too many people are receiving crypto in place of dollars to dodge income tax.
The tax laws are the only ones where you have to prove you are 'innocent' in a court of law.
Besides, I can get in enough trouble just buying stocks and them *sending those pesky dividends.

 

[Tacitus]

Yeah. I'm certainly not looking to avoid taxes. I'm just looking to diversify my wealth holdings. I may have to hire an accountant when and if I decide to sell. The wife does our taxes now. You have no idea how happy I was to find that Q&A on the IRS website that gave us an easy answer. IRS be damned...I might have had some domestic troubles on my hands if I complicated our taxes by buying crypto.

 

[TeeJ]

So it's like buying stock. You can buy all you want, no problem.
If the stock goes up in value, no capital-gain problem if you don't sell*.
But I can tell you that the IRS machines are very good at keeping track of it, and I can bet you that they will crack open every crypto-egg and have a look inside of it pretty soon.
Too many people are receiving crypto in place of dollars to dodge income tax.
The tax laws are the only ones where you have to prove you are 'innocent' in a court of law.
Besides, I can get in enough trouble just buying stocks and them *sending those pesky dividends.

The whole thing with taxes is you need to know the threshold that any crypto exchange has for reporting to the IRS. (I believe most are $900) If you stay under that level for the year, there's no real worry. And if the exchange is located outside the US, they may not worry about dealing with US taxes... I'd never propose intentionally underreporting tax revenue on a public forum, but I know people who have done so without any IRS entanglement (so far).

I've been very interested in the Stellar network lately, lots of tokens to be had for fractions of a cent right now. You're able to get millions or trillions of them for a dollar or so. If any of them become the next Bitcoin your made in the shade, if they end up being worthless and you skipped your daily coffee for the funds what are you out anyways? The exchange I use for stellar is Lobster.co

 

[TeeJ]

So, how did you answer this question on last-year's, and this year's tax return?
Hint: If you told the truth, you get in trouble; if you lied, you get in big trouble.

(notice the different wording for 2021)

My state tax return has a similar question asking if you have bought anything from out of state where you didn't pay sales tax on the transaction. If you enter "yes" you are supposed to report the purchases and pay the sales tax with your tax filing. I bring it up anytime taxes come up in conversation, and I've never met anyone who answers "yes", even if the crowd is all devoutly religious people. Everyone I've ever met recognizes this as government overreach, and it lets me share my favorite quote "taxation is theft".

 

[Tacitus]

Coinbase's value is down 70%, and they have a hiring freeze, and they are rescinding hiring offers, because crypto is down so much. I was literally thinking about applying for a job there. They have a lot of remote workers, and my company is still in a rather chaotic situation. Now, however, I'm thinking about transferring my remaining holdings from Coinbase to my Ledger hard wallet, because Coinbase is struggling so much. My how things change.

And after all that...I just bought a bit more Ethereum. It may all be going to hell in a handbasket, but I'm not yet up to my limit of play money (money I would otherwise spend on a luxury item like my favorite wine). And now is a great time to get in...that is, if you think cryptocurrencies are here to stay, which is by no means 100% certain. I think it is, but who knows, really???

 

[Tacitus]

Oh my. Have you checked cryptocurrency prices lately?

If you have been sitting on the crypto sidelines, then it is definitely time to do one of several things:

1. Buy some cryptocurrency (or some crypto-tracking financial investments) now!
   
   OR
   
   
2. Laugh loudly at everyone who bought in before now.
   
   OR
   
   
3. Maybe both? Who knows???

I'm definitely holding...and I will hold until zero. I don't get why people sell when there is a crash. If you have to sell, then you were into the market too much in the first place.

 

[Supervisor42]

Oh my. Have you checked cryptocurrency prices lately?
If you have been sitting on the crypto sidelines, then it is definitely time to do one of several things:

1. Buy some cryptocurrency (or some crypto-tracking financial investments) now!
   OR
2. Laugh loudly at everyone who bought in before now.
   OR
3. Maybe both? Who knows???

I'm definitely holding...and I will hold until zero. I don't get why people sell when there is a crash. If you have to sell, then you were into the market too much in the first place.

I was watching today.
BitCoin had a little bit (pun) of a stumble today...
But don't feel bad, everybody else in the markets got a spanking today too.
However,The other thing is, add that to its plunge from $65K last year and it ain't lookin' so good.

A major holding company Celsius had to halt selling.
I'm not a believer, but if they come out with "Tooth-Fairy Coin", I'm gonna be all over it!

 

[TeeJ]

IMHO, I think were going to see a shift away from coins & tokens that are backed by nothing tangible (like math or CPU cycles, etc.) and are going to see the rise of ones backed by physical assets. Wither this is precious metals, commodities, or even companies (like stocks) I think there's going to be a lot more stability and liquidity in them. I think once ISO 20022 is fully implemented, we'll see crypto being used a lot more like money as well.

 

[bkt]

IMHO, I think were going to see a shift away from coins & tokens that are backed by nothing tangible (like math or CPU cycles, etc.) and are going to see the rise of ones backed by physical assets. Wither this is precious metals, commodities, or even companies (like stocks) I think there's going to be a lot more stability and liquidity in them. I think once ISO 20022 is fully implemented, we'll see crypto being used a lot more like money as well.

While I'm not counting crypto out just yet, you are right - eventually, it will be shown that if you can't stand in front of it holding a rifle to defend it, it's not really yours or it doesn't really exist. Blockchain tech is great for many things. As a currency...I have my doubts. And yet, I mine it. Go figure.

 

[Neb]

While I'm not counting crypto out just yet, you are right - eventually, it will be shown that if you can't stand in front of it holding a rifle to defend it, it's not really yours or it doesn't really exist. Blockchain tech is great for many things. As a currency...I have my doubts. And yet, I mine it. Go figure.

Mining involves CPU cycles?

Something for nothing.

I have 2 newer laptops that are idle most of the time. What does it take to mine?

Of course I would sell as soon as possible. Smoke and mirrors don't stick around long.



Ben

 

[Supervisor42]

10-10-21:
Sell sell sell! (is what the Duke guys were saying in the movie Trading Places)
Paper profits based on how much something has gone "up" are not real until you sell.
Nothing worse than seeing something go up 500% and watch it go back down 500%.
*Disclaimer: This is not investment advice. Super has 'play money' invested too.

And this is what some crazy guy was saying when it was at $60K+.
Look inside the black box below:

Edit: Fox Business News was saying that one-trillion dollars had vanished in bitcoin alone.