Bitcoin

Have you invested?

I haven't done any research, only reading headlines and thinking.  From a past post I know NEPA has invested some into Bitcoin, curious as to where/how you invest in the currency.

If you think an "investment" in Bitcoin is a good idea after looking at this chart, I have some swampland in Florida that you might be interested in:



If I owned Bitcoin right now, I'd be looking to sell and take profits ASAP.

I'd invest some money in a Bitcoin contra-fund (and I'm sure someone will create one soon).

A good friend of mine invested.  He's got his capital out, so it's just house money now.  He said he thought there is a bubble, but said he'd reinvest after that bubble burst.

I don't know if his is Bitcoin or some other mined currency.

If you buy it don't lose it.  

tjf1967 wrote

If you buy it don't lose it.

What do you mean by don't lose it?

It's interesting, I've been familiar with it from the beginning when I was scouring the internet for those fun mind expanding compounds.  Harvey remembers those days... some of my best posts came around in the wee hours of the morning on SkiAdk...

Anyhow I never got involved in the currency.  Once Silk Road went under I figured that the currency would go away quietly... Look at it now and it's still in its infancy.

I see myself investing in it in the near future, whether its bitcoin or a handful of the others.  Certainly not going ALL IN, but it's intriguing.  Look at how much the internet has changed the world in just 2 decades.

A TON of unknowns and risk, but damn it'll be interesting to see where this goes.

https://www.google.com/amp/s/www.digitaltrends.com/computing/30-billion-lost-bitcoin/amp/#ampshare=https://www.digitaltrends.com/computing/30-billion-lost-bitcoin/

This is could be a highly risky venture.    It really depends on your perception of what "risk" really is.  I invested money for use on the Black Market... this gives you an idea of my risk tolerance.  There is no physical nature to this currency... it can disappear into thin air very quickly.  It's that way by design.  That should tell you something.

 

There was a time in late 2013 where I thought I flushed 5 grand down the toilet into a big Bitcoin septic tank... My entire account was inaccessible for about 4 weeks.  The exchange that I invested with was telling me that there was no issue, and I needed to be patient.  Apparently, they had contracted an infection that corrupted most of their data, and were having trouble accessing their offline backups.  I was persistent and persistence paid off.  I'm a Jew, so when it comes to money, well you know what they say....

 

Now, I feel very lucky (to have just said Yes... Thanks Drugs!!).  

I held a position that I was using to purchase party favors (a.k.a. drugs) via Silk Road and subsequent DarkWeb incarnations.  In early 2013, I invested 5K.  I got in at an average in the 20's.

I closed out the position via Coinbase (IMO:the most reputable exchange)  in late September of this year.  It appears that i left the Casino a bit early.  I exchanged 183 units for $4127 and change, each.  

IMO: Your too late to the game... this is a classic bubble

 

So you grossed 750k...Very nice..Now we know how you retired early..Mazel tov

JasonWx wrote

So you grossed 750k...Very nice..Now we know how you retired early..Mazel tov

Mucho Mazel Tov

One of a very small handful of "lucky" investments that made early retirement possible.  

So is it going to be taxed as a capital gain or is it going to be  looked at like a currency appreciation?

tjf1967 wrote

So is it going to be taxed as a capital gain or is it going to be  looked at like a currency appreciation?

Capital gains... in the eyes of the tax code, for some odd reason it's not looked at like hard currency.

Something weird about that.  What if you used it to but a house, like paying cash for it, then turned around and sold the property.  Would you have washed the gain away?   So if you get some bit coin and use it as currency you have a whole bunch of moving parts.  When you were actively using it to purchase things were you listing out cost basis for each of the transactions on your returns?

tjf1967 wrote

Something weird about that.  What if you used it to but a house, like paying cash for it, then turned around and sold the property.  Would you have washed the gain away?   So if you get some bit coin and use it as currency you have a whole bunch of moving parts.  When you were actively using it to purchase things were you listing out cost basis for each of the transactions on your returns?

I just heard an NPR story on this yesterday. It sounded like it was not that easy to spend Bitcoin (like, I'm not sure you could just "buy a house" with it).

Oddly, Starbucks accepts Bitcoin. I guess you could buy a lot of coffee and resell it.

Saw this earlier, might be of interest
https://www.google.com/amp/s/www.bloomberg.com/amp/news/articles/2017-12-05/mystery-shrouds-tether-and-its-links-to-biggest-bitcoin-exchange

Okay, I still don't seem to be getting the concept of Bitcoin. What the hell is this?

<Used to be a link here talking about massive energy use involved in mining Bitcoin>

EDIT: Withdrawn: https://blockchaind.net/debunking-bitcoins-electricity-problem/

MC2 5678F589 wrote

tjf1967 wrote

Something weird about that.  What if you used it to but a house, like paying cash for it, then turned around and sold the property.  Would you have washed the gain away?   So if you get some bit coin and use it as currency you have a whole bunch of moving parts.  When you were actively using it to purchase things were you listing out cost basis for each of the transactions on your returns?

I just heard an NPR story on this yesterday. It sounded like it was not that easy to spend Bitcoin (like, I'm not sure you could just "buy a house" with it).

Oddly, Starbucks accepts Bitcoin. I guess you could buy a lot of coffee and resell it.

I'll have to see exactly how it is documented.  It's going to be a learning experience.  The exchanges do not produce 1099's so I'm not sure how the information on the Schedule D will be validated in the event of an audit.  I have a list of "spends," but I think the only transactions that are truly material for taxes are the open of the account with the original cost basis (I transferred my holdings to Coinbase after the Mt Gox issue in 2013), and the disposition in September of this year.

MC is correct... as far as I understand, it's not that easy to execute large transactions outside of the virtual world.  Due to the fact that most real estate assets  are held in part by banks it seems unlikely that it will ever be possible... maybe if it was FSBO.

nepa wrote

MC2 5678F589 wrote

tjf1967 wrote

Something weird about that.  What if you used it to but a house, like paying cash for it, then turned around and sold the property.  Would you have washed the gain away?   So if you get some bit coin and use it as currency you have a whole bunch of moving parts.  When you were actively using it to purchase things were you listing out cost basis for each of the transactions on your returns?

I just heard an NPR story on this yesterday. It sounded like it was not that easy to spend Bitcoin (like, I'm not sure you could just "buy a house" with it).

Oddly, Starbucks accepts Bitcoin. I guess you could buy a lot of coffee and resell it.

I'll have to see exactly how it is documented.  It's going to be a learning experience.  The exchanges do not produce 1099's so I'm not sure how the information on the Schedule D will be validated in the event of an audit.  I have a list of "spends," but I think the only transactions that are truly material for taxes are the open of the account with the original cost basis (I transferred my holdings to Coinbase after the Mt Gox issue in 2013), and the disposition in September of this year.

MC is correct... as far as I understand, it's not that easy to execute large transactions outside of the virtual world.  Due to the fact that most real estate assets  are held in part by banks it seems unlikely that it will ever be possible... maybe if it was FSBO.

Good point, I did read the story about there being RE transaction via bitcoin.  

At this point in time I think it's pretty clear that no bank in America would take bitcoin to payoff a mortgage balance... The only feasible way that I could see is that the Seller owned the home outright, accepted X amount of bitcoin and just signed the Deed over for $1.

Also, the title company would likely only accept American Dollars to run their title search to be sure it was free & clear

The NPR story I heard told the story of a cafe in some financial district that accepted Bitcoin starting a few years ago, but their policy was to instantly convert any Bitcoin they had to dollars, just like any foreign currency they got. The host said that if the cafe had only held on to the Bitcoin, they could have been millionaires  many times over, but the cafe owner didn't seem to upset about it.

I wish I had his zen attitude, but I wish I had all the Bitcoin he cashed in more.

Here's the reverse of what we were talking about: https://www.cnbc.com/amp/2017/12/11/people-are-taking-out-mortgages-to-buy-bitcoin-says-joseph-borg.html