How To Accept Bitcoin On Your Website • Hacker News Board

Re: How To Accept Bitcoin On Your Website

#71

Post by zargon » Thu, Dec 06, 2012, 6:01 PM UTC

yebyen wrote: post #70

tedunangst wrote: post #62

Earlier quoted context omitted.

You owe tax on income regardless of the form. If your employer gives you stock, you owe tax based on the stock's value the day you get it. Capital gains (or losses) mostly only applies when you sell the stock, and only to the difference in value. Same deal for bitcoins. Hell, if you're caller #9 and you just won the two week cruise, you're getting a fat tax bill and cruises aren't cash either.

Ahm... but if you paid cash for the bitcoins, you don't owe any tax on it, right... until they appreciate in value, then it's capital gains? And then, only if you actually cashed out, right? If you leave them as bitcoins and the value drops below what you paid, now you've got a loss and maybe deduction instead... It would make sense that you should pay taxes on mining income (if they can find you).

If you paid cash for the cash you received in the mail, it wouldn't be income either, would it? (though it makes little sense.)

Most people earning income in bitcoin probably aren't doing it by mining, especially after ASIC arrives. Just to point out that mining is only one of many ways to earn bitcoin income.

Re: How To Accept Bitcoin On Your Website

#72

Post by yebyen » Thu, Dec 06, 2012, 6:45 PM UTC

zargon wrote: post #71

yebyen wrote: post #70

Earlier quoted context omitted.

Ahm... but if you paid cash for the bitcoins, you don't owe any tax on it, right... until they appreciate in value, then it's capital gains? And then, only if you actually cashed out, right? If you leave them as bitcoins and the value drops below what you paid, now you've got a loss and maybe deduction instead... It would make sense that you should pay taxes on mining income (if they can find you).

If you paid cash for the cash you received in the mail, it wouldn't be income either, would it? (though it makes little sense.) Most people earning income in bitcoin probably aren't doing it by mining, especially after ASIC arrives. Just to point out that mining is only one of many ways to earn bitcoin income.

Right, there's also arbitrage trading on markets which have fluctuating market rates, plus regular buying and selling over longer periods of times, transaction fees (both from mining and from trading), and simply accepting Bitcoin as payment for services.

I am not so sure that ASIC will kill the small-time mining scene, the low-end ASIC miners are cheaper and less power hungry than video cards (though you can't play games on them), it will just mean that if you want to mine bitcoins, you'll have to get one (or more), and you can't rely on your video card anymore. So a lot of people will be pushed out.

Re: How To Accept Bitcoin On Your Website

#73

Post by fruchtose » Fri, Dec 07, 2012, 5:35 AM UTC

Compared to other Bitcoin exchanges, I have high hopes that you guys are more confident. Taking a page out of Stripe's book is the right move, because you look less like previous Bitcoin sites and more like a startup. If Coinbase suffered a security breach I would be very disappointed.

Re: How To Accept Bitcoin On Your Website

#74

Post by dllthomas » Mon, Dec 10, 2012, 7:32 PM UTC

xyzzy123 wrote: post #60

dllthomas wrote: post #55

Earlier quoted context omitted.

Too late to edit, but I realize the problem is more likely to come up in the face of sudden and significant deflation, which isn't something we see in other currencies terribly often.

Surprisingly wide swings in fiat currency value can happen over the course of a month or two though. I imagine the volatility of BTC might cause problems for things like pre-orders. I once placed a large order with a US company; unfortunately the order couldn't be filled for about two months. I really wish they had billed me up front, because by the time they did bill me, the order cost 30% more in NZD.

While that's not quite the situation in question (you took my money and now I want a refund is stickier than "I want to pay you now rather than later" - in your case, you could always just cancel your order...), it's still relevant in that things could well have been reversed and (the bit I overlooked in my second comment) a rapid inflation in one currency looks a lot like a rapid deflation in others if you hold the inflating currency.

Re: How To Accept Bitcoin On Your Website

#75

Post by mcherm » Mon, Dec 10, 2012, 9:19 PM UTC

yebyen wrote: post #51

mcherm wrote: post #50

Earlier quoted context omitted.

Evidence shows that the track record of hosted bitcoin accounts is a bit disappointing. But the evidence seems to show that the track record of bitcoin accounts kept by individuals is significantly worse. For instance, http://arstechnica.com/tech-policy/2012/10/78-percent-of-bit... and I think I am safe in concluding that a significant portion of those "non-circulating" bitcoins are actually lost. So my financial adv…

7 million bitcoins are "lost" because they haven't circulated in the last 3 months? Maybe you have found evidence of an elaborate ponzi scheme that we are all played by, but I don't buy your conclusion, and it's not the conclusion of the linked article. If only 90,000 bitcoins held by/moved through a small group is driving most of a total of 423,000,000 bitcoins transacted, then I'd say the rest of the owners of the…

> It's shameful to hear Hacker News readers saying they don't trust their own data to stay safe.

Look, I am a reasonably skilled programmer, and I work for a bank. I know a great deal about keeping data safe and keeping it backed up well. I have written simple cryptography algorithms for addressing these sorts of issues (like secret sharing). And I know enough to realize that these are HARD problems, and leaving them to professionals works better than thinking you are smarter than the rest of the world.

As an example, it sounds like you store your bitcoins in a safe in your house. Nice system... I'm going to assume that your safe is fireproof, and that you were careful about not storing the data elsewhere. Now here's a question: if you die, will your heirs know how to retrieve the value, or will it be lost forever? Those are the sorts of hard problems that an institution can probably handle better than you can.