Bitcoin...Cryptocurrency

[thegrouse]

sorry late to the convo

what are the tax laws on buying and selling litecoin?

You gotta pay the man. I posted it a few days back.

https://www.irs.gov/pub/irs-drop/n-14-21.pdf

[Jtrage]

Willy - I was looking for the donation link at the end....

Just joking and welcome.

[Skinny]

Bitcoin...Cryptocurrency

Ok, I’m going to go ahead and state that my account here is brand new, although I have been lurking for years. Love the site. This is my first post ever on TBH. I decided to go ahead and take the plunge because of this thread.

I want to preface this by saying I don’t mean this post to be negative in any way. In fact, the opposite. I want to try and help some of you understand what you are, or are contemplating, putting your money towards. I see so many posts stating things like “I buy XRP (ripple) because of the slight chance it could go up to $18,000 like bitcoin years from now” or things like “bitcoin is for long term and all other crypocurrencies are for trading” and so on and so on of blatant cluelessness of the subject. (I will explain.)

I also see why it’s easy to be confused about all of this, because the misinformation is literally everywhere. Forums, reddit, youtube videos, news articles from “reputable” sources like the Wall Street Journal or Forbes… I’ve seen terrible information from them all.

First off, let’s start by what exactly IS Bitcoin or “cryptocurrency?” I put “cryptocurrency” in quotes because that’s actually not technically a correct term to describe most of these tokens. As I’m sure everyone knows, Bitcoin was the very first ever decentralized blockchain token created, and other blockchains followed. Yes, Bitcoin was designed originally to be a “digital currency” as you will or possibly a store of value. But the REAL value from Bitcoin comes from the Blockchain itself. This decentralized public ledger is being evolved into being an extremely useful technology for many many industries. Blockchains such as Ethereum (which runs on the token ETH) is designed to be a protocol to run decentralized apps on top of. (Think, the internet.) The token ETH was never designed to be a currency. It Is NOT a currency, even though it is traded. ETH is the gas that the Ethereum protocol runs on. It’s awarded to “miners” who are the people or entities which solve complex algorithms with computers, and this secures the entire Ethereum network by confirming transactions any time ETH trades hands. As usage of the entire Ethereum system increases, so should ETH. Here’s where it derives its value from. The reason you can purchase it from an exchange is because people speculate that it will increase in the future, and so are looking for a ROI, or miners are selling it for cash.

For another example of a blockchain use case, there is Factom. (the token is FCT). Factom aims to be a public ledger to secure data to a blockchain, making it impossible for people or entities to change records without it being witnessed. This becomes extremely useful to businesses in which important data regularly change hands. Think mortgage documents, land grants, medical records… all which need to have ensured accuracy as they move hands. FCT is the token that makes this blockchain run by awarding it to those that secure this entire network. Again, not a currency, but it is traded as a “crypocurrency” on exchanges. There are hundreds and hundreds of cryptocurrencies, almost all of which are NOT designed to be actual digital currencies. There’s tons that are scams, many that are copy cats, many that are designed for projects that want to solve real world problems, but will ultimately fail and be worthless. So how do you pick the right ones to “invest” in? That’s the incredibly hard part.

You can research Bitcoin itself and look at the energy and time it takes for transactions, how it has a HUGE scaling problem it’s facing, and see that there are much more useful blockchains out there. The amount of energy being burned just running the bitcoin protocol is more than several countries worth of electricity. That is unsustainable, period. Especially if it intends to grow even more. There are much better blockchain protocols out there that are faster, more efficient, and have a much better use. But Bitcoin is what everyone knows.

There is a huge influx of average people, some businesses, and even a few fund managers getting “into cryptos” at the moment. This is why you see prices for all of these coins skyrocketing at the moment. They are not increasing this fast because of their real world use. They are increasing on almost pure hype and speculation by millions of people. (Hence why you can find a thread this big about them on something like a Bow Hunting forum.) But you need to be very careful with what you’re buying. If you feel like pure gambling and throwing a very small amount into something that you have no understanding of, but because everyone else seems to be making loads of money off of it, then by all means that is your choice. But just understand that that is pretty much a sure sign of a bubble. I believe in blockchain technology, and have no doubt that there are projects that will change industries as we know them. Some of these (very small percentage) will become very valuable and others (most) will fail. There will be bubbles that will pop, and corrections will occur, and after a period (maybe years) they will continue going up. (The useful ones that survive.) We know this because it’s already happened several times. Bitcoin went to $1200 in 2013 and bled out down to $200 over a year and a half. Not to mention, this being a newer type of asset the exchanges and regulations are still experiencing growing pains. Wait until you witness an exchange get hacked or an exchange shut down on a day where the price is free falling. (GDAX and coinbase do this EVERY time.) Also, please educate yourself on how to protect your coins. There’s scams everywhere.

Just understand that the returns we’re seeing in ALL of these crypotcurrencies skyrocketing… that is almost purely people just dumping money into them. Which is fine if you want to do some short term trading to turn some bucks… but you better beat your neighbors to the exit. Because there WILL be huge corrections. (I first bought BTC in 2013 before the $100 to $1200 runnup and following crash back down all the way, and I am seeing a lot of the same signs except on a bigger scale.) I also see comments which alert me that many people don’t understand Market Cap at all. The Market Cap (total supply x current price) of bitcoin at the moment is $290 Billion. The Market Cap of Ripple (XRP) is currently $29 Billion. Which means if Ripple became as valuable as Bitcoin is today, each XRP would be $7.59. NOT $17,300. It is impossible for a single XRP to grow to a price like a single Bitcoin. ($17,300.) Why? Because if each XRP was $17,300 then the market cap of Ripple would be $669 TRILLION dollars. (The entire United States gross domestic product is $19 trillion. The entire worlds supply of gold is about $7 trillion.) It's a fallacy to believe you're "getting in early" on a coin because the price is low.

Welcome to the fire! Any and all info, insight, etc, it appreciated as some of us need more learning in all this...like was stated, we...errr...I am playing this “game” with beer money essentially. [emoji12]

If I lose a few hundred bucks, I’ll be ok with that. If I make a few hundred, that’ll be great. I’m not thinking I can get rich doing all this, but if I can turn a little profit, I’ll be happy. It’s fun to dream ain’t it? [emoji1474]


Skinny

[shotgunwilly]

Willy - I was looking for the donation link at the end....

Just joking and welcome.

Haha! No sir, I don't ask for handouts.

Thanks for the welcome.

[Jtrage]

Haha! No sir, I don't ask for handouts.

Thanks for the welcome.

It was joke going back on this thread about how we are not financial advisers and how the youtubers all at the end asked for donations.

[systemnt]

on a down trend again.. time to pick up some more LTC

[garza]

https://www.bleepingcomputer.com/news/cryptocurrency/bitcoin-cash-trading-halted-on-coinbase-as-insider-trading-probe-begins/

[Spearchunker]

tell me more about verge, please

Dont know much, just a luck buy. I do know they're serious about staying anonymous with their traders. Just sold it all too lol.

[garza]

Dont know much, just a luck buy. I do know they're serious about staying anonymous with their traders. Just sold it all too lol.

x2. luck. i saw the chat on a crypto bob live you tube stream last night and everyone was talking about verge. saw it was climbing and took a chance. doubled my investment. in and out.

[systemnt]

https://www.bleepingcomputer.com/new...-probe-begins/

be interesting how the intend to prove it since transactions are anonymous...

[Chew]

This stuff is exhausting. I just don't have time to play.

But my $50 Dash Coin investment turned to $80 in a few days. Very nice.

[Etxbuckman]

on a down trend again.. time to pick up some more LTC

What is it about LTC that has you so bullish on them?

[Daniel75]

Anyone getting this stupid error from GDAX? Trying to buy $536 worth of BCH and it keep giving me this error. What gives?


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[Etxbuckman]

I wonder if the fact that no more than 21 million Bitcoin can be created or mined will have any effect on their price? I mean it's not a tangible asset so being a somewhat limited quantity in and of itself shouldn't affect anything, but perhaps the way in which it's used will?

From what I've read about Bitcoin I almost think the only reason it's "worth" so much now is because it's the OG cryptocurrency. It seems Litecoin can do anything Bitcoin, and faster to boot.

[Etxbuckman]

Anyone getting this stupid error from GDAX? Trying to buy $536 worth of BCH and it keep giving me this error. What gives?


Sent from my iPhone using Tapatalk

Shoot I can't even get that stupid thing to link to my bank account.