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Beyond the Bitcoin bubble

nytimes.com

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Re: Beyond the Bitcoin bubble

#21

Post by gamblor956 »

hesdeadjim wrote: post #2

I am personally hoping we can survive the speculation craze and reach a point where we can use the block chain technology in revolutionary (or even evolutionary) ways. Since it’s tax time I can’t help but feel that the true long term danger to block chain technology isn’t draconian government regulation, it’s the IRS. For example I have a transaction earlier this year where I purchased some software for $15 BTC equiv…

Transaction fees back then weren’t as brutal so I will ignore that issue as I believe it is 100% solvable. What was truly brutal is that using standard FIFO accounting practices I owe an additional 30% tax on the “money” I spent. My cost basis for that particular coin amount was 10% of what the current price of BTC was when I made the transaction.

For tax purposes, Bitcoin is not considered a currency, it is considered an asset.[1] When you used it to buy some software, you were treated as exchanging that BTC for the software. Because that BTC had increased in value, you were tax on the gain in the value of the BTC actually used in the software-purchase transaction. This analysis generally applies in all of the Western world.

[1] Even if Bitcoin would be considered a currency for tax purposes, it would be considered a foreign currency (meaning, not the legal tender of your jurisdiction), so the same analysis applies. When transacting in foreign currency, you need to do gain/loss calculations for each transaction. Note that IRS advice for calculating digital currency gains/losses is essentially the advice they give for calculating foreign currency gains and losses, but simplified to layman's terms.

Re: Beyond the Bitcoin bubble

#22

Post by jtbayly »

nacho2sweet wrote: post #20
brndnmtthws wrote: post #14

Is anyone else tired of hearing the word 'bubble' applied to everything? Whether we're talking about tech stocks, chicken futures, tulips, or Bitcoin, it's become a really tired and meaningless term. You can't know if an asset is in a 'bubble' until long after the bubble has burst. Bitcoin is far from having burst, so this article and all those that came before it offer nothing new or insightful. Please, let's move p…

No I am not tired of keeping my uniformed friends scared and their money safe.

Why only your uniformed friends? Are only cops and members of the military worthy of having their money protected?

Also, I thought they were the ones who were supposed to do the scaring...

Re: Beyond the Bitcoin bubble

#23

Post by [deleted] »

brndnmtthws wrote: post #14

Is anyone else tired of hearing the word 'bubble' applied to everything? Whether we're talking about tech stocks, chicken futures, tulips, or Bitcoin, it's become a really tired and meaningless term. You can't know if an asset is in a 'bubble' until long after the bubble has burst. Bitcoin is far from having burst, so this article and all those that came before it offer nothing new or insightful. Please, let's move p…

[deleted]

Re: Beyond the Bitcoin bubble

#24

Post by todd_wanna_code »

nabla9 wrote: post #5

I hope the technology matures beyond 'blockchain' and marketing drops the 'coin' moniker and the gold rush dies down. Cryptographically verified distributed log files should have negligible hype value and be hidden part of the infrastructure. I predict that 10 years from now normal relational databases have infrastructure for shared, authenticated and verified rows and columns and we laugh at the ICO era.

Hmmm. Good point, I too hope ten years down the line we laugh at the ICO era. But the 'coin' part is actually more than a moniker. It has provided a PoC that value can be proved and transferred digitally. I hope governments actually continue research in this space, while effectively regulating this speculative fad.

Re: Beyond the Bitcoin bubble

#25

Post by rm_-rf_slash »

jtbayly wrote: post #22
nacho2sweet wrote: post #20

Earlier quoted context omitted.

No I am not tired of keeping my uniformed friends scared and their money safe.

Why only your uniformed friends? Are only cops and members of the military worthy of having their money protected? Also, I thought they were the ones who were supposed to do the scaring...

I think parent meant to say “uniNformed”

Re: Beyond the Bitcoin bubble

#26

Post by thisisit »

vthallam wrote: post #3

This was a necessary phase. Mass adoption couldn't have been achieved without the exponential price rise of various cryptocurrency tokens. There would not have been media coverage of this proportion, had it not been for the gains. People now talk cryptocurrency, read more about the underlying technology and accept that it will positively affect the industry in the upcoming future. I hope the market stabilizes and som…

> read more about the underlying technology

And how do they do that really? Just to remind you, I see even some of the brightest mind in technology get confused with the explanations on cryptocurrency side. Specially when it comes with a healthy dose of made-up jargon - side chain, off chain, colored coins to name a few.

Re: Beyond the Bitcoin bubble

#27

Post by zerostar07 »

brndnmtthws wrote: post #14

Is anyone else tired of hearing the word 'bubble' applied to everything? Whether we're talking about tech stocks, chicken futures, tulips, or Bitcoin, it's become a really tired and meaningless term. You can't know if an asset is in a 'bubble' until long after the bubble has burst. Bitcoin is far from having burst, so this article and all those that came before it offer nothing new or insightful. Please, let's move p…

Balloon is better. These kinds of "bubbles" don't pop in a day, they deflate slowly

Re: Beyond the Bitcoin bubble

#28

Post by vec »

gizmo385 wrote: post #4
vthallam wrote: post #3

This was a necessary phase. Mass adoption couldn't have been achieved without the exponential price rise of various cryptocurrency tokens. There would not have been media coverage of this proportion, had it not been for the gains. People now talk cryptocurrency, read more about the underlying technology and accept that it will positively affect the industry in the upcoming future. I hope the market stabilizes and som…

> People now talk cryptocurrency, read more about the underlying technology and accept that it will positively affect the industry in the upcoming future. Do they really though? I don't hear anyone outside of people who have actively bought into the cryptocurrency hype saying that it is going to have a positive affect on the industry. I hear a lot of people saying things like "it's a bubble" or that "the rules these…

Right, this.

I think cryptocurrencies are here to stay. I'm not convinced that's actually going to "positively affect the industry in the upcoming future".

I don't think cryptocurrencies are going to remove the need for some big middleman like Visa to sit between individual consumers and their partners. Things like reversible transactions and on-demand small loans are too attractive to the median consumer, so someone's going to be layering them on top of the underlying currency, whatever it may be.

I don't think they're going to have a big impact on the financial sector. They can trade and leverage and loan with cryptos just as easily as they can with fiats, just with a lot of the safety rails like bankruptcy pulled off.

I don't think they're going to impact most governments' ability to levy taxes and to borrow. There are dozens of governments that don't mint their own currencies, and by and large they still maintain taxing authority about as easily as they maintain the rest of their infrastructure and bureaucracy.

I do think it's going to prevent central banks from doing their thing, but I'm not convinced that's a good thing. Central banks have their issues, to be sure, but I'm pretty sure they're better than the huge boom & bust cycles they replaced.

Cryptocurrencies will certainly make the world different in meaningful ways. Different doesn't necessarily mean better.

Re: Beyond the Bitcoin bubble

#29

Post by [deleted] »

hesdeadjim wrote: post #2

I am personally hoping we can survive the speculation craze and reach a point where we can use the block chain technology in revolutionary (or even evolutionary) ways. Since it’s tax time I can’t help but feel that the true long term danger to block chain technology isn’t draconian government regulation, it’s the IRS. For example I have a transaction earlier this year where I purchased some software for $15 BTC equiv…

[deleted]

Re: Beyond the Bitcoin bubble

#30

Post by cryptofyodor »

nacho2sweet wrote: post #20
brndnmtthws wrote: post #14

Is anyone else tired of hearing the word 'bubble' applied to everything? Whether we're talking about tech stocks, chicken futures, tulips, or Bitcoin, it's become a really tired and meaningless term. You can't know if an asset is in a 'bubble' until long after the bubble has burst. Bitcoin is far from having burst, so this article and all those that came before it offer nothing new or insightful. Please, let's move p…

No I am not tired of keeping my uniformed friends scared and their money safe.

Well, I think it's more proper to inform and educate friends and people instead of scarring them. For me what SEC and regulators in majority of other countries are doing is scarring people (with all the warnings) - I'd find education more effective.
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