Author Topic: Crypto Currency for Preppers.  (Read 129 times)

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Offline Raptor

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Crypto Currency for Preppers.
« on: June 07, 2021, 01:09:01 PM »
The purpose of this thread is to discuss cryptocurrency ("CC") experiences.
No investment or legal advice will be permitted here but experiences and opinions are welcome.

With the coming huge shift in inflation caused by deficit spending not just in the US but worldwide I decided to explore cryptocurrencies as an alternate value proposition. Much as I bought gold in the fall 2008 and spring of 2009 when commodities prices dipped I was looking for a similar commodity for 2021. I am convinced that CC are here to stay. That is not to say they will "go to the moon" and replace everything else. That said while I say they are not going anywhere, the question in my mind is not if they will have value, but rather how much will they be valued. That discussion alone could fill books and I am not going to discuss that aspect of CC.

I have resisted the urge to invest in cryptocurrencies up until 4th Quarter 2020. Even then I engaged in the necessary due diligence with some reluctance. I am by no means a luddite and one of my businesses is the "information retrieval" business. That said I viewed the whole cryptocurrency system as fraught with a lot more risks than just the market volatility of these tokens. The physical security risks are quite concerning.

That said I set up test accounts with Uphold, Gemini and Coinbase Pro and started testing these systems for usability, fees and security as well as ease of use and flexibility. That and I wanted 2 independent storage and markets in case one was negatively impacted.

During the time frame I purchased identical USD amounts of XRP, BTC ETH and BAT. The world is focused on Bitcoin but there are many other "alt coins" that have other uses and actually make BTC prices look stable.

It was during that time frame that I was amazed at the price fluctuations; they all crashed during the diligence period seeming every other day but at the end of the 30 day trial period all were up a lot. This what I referred to tongue in cheek as their tendency to crash up. The volatility alone is a reason to avoid calling this anything but a speculative investment; gambling is a better name for it. The volatility is driven by reasons that are opaque and certainly there is market manipulation going on through the system. However, heard mentality is a huge issue also.

Anyway after a period of time testing these systems and buying selling transferring cash to and from a stand alone USD bank account I settled on Coin Base Pro and Gemini as the main trading and holding platforms.

I did this because they passed all of my security requirements. That said security is one thing that needs to be thought out.
Holding Crypto.
There are many Youtube videos on various gear and options but basically you can have two kinds two wallets (hot & cold) and each has unique risks. Do your diligence and decide what works for you. Op Sec demands that I not disclose my choice. This is an important decision not to be taken lightly.

The other key choice is the physical equipment you use to trade. These platforms are geared for your smartphone. I strongly suggest that you resist that ease and stick to a laptop or desk top unit. Smartphones are just too easy to compromise.

Lets talk about the differences between the two platforms Coinbase Pro and Gemini.
Gemini:
This platform has several things that I like:
1. It does not require a 3rd party identifier token like Google Authenticator to use. It sends a 7 digit code to a cell phone of your choice to access, trade, or transfer funds. Since I do not use a smartphone for trading and have the burner for 3 rd party id texts this works best for me.

2. If you chose to hold the CC on their platform they will allow you to set up a separate hot wallet which pays interest for many CC. The interest is paid in that CC and all pay well over 3%. Be sure you are comfortable with the security offered by Gemini.

3. I connect the Gemini account to a USD bank account that is a stand alone separate bank account. I wire transfer funds to that account and as I buy CC I make a transfer into trading account via Gemini. They take 3 to 5 days to transfer the actual cash but do give me credit for the deposit instantly for trading purposes. They are slow to get my cash which allows in effect use the float for my trading.

4. The platform allows me to put in limit buy and sells as well as routine purchases so that I can dollar cost average into a position either over time of based upon market dips. Remember LOTS of volatility means that placing market orders is a crap shoot.

5. There fees are not as high as Coinbase or Uphold. They are not cheap but they are cheaper.

What I do not like:
1. A limited number of "alt coins" are traded or held there.

2. They limit daily ACHs to $25,000 even on a verified account.

3. They are slow to take USD from my account and the transfer back is equally slow.

Coinbase Pro (not to be confused with Coinbase) platform:
This platform has several things that I like:
1. A slightly wider section of "alt-coins"
2. A higher daily ACH limit of $50,000 in and out.
3. I can place buy & sell limit orders as well as routine purchases.

What I do not like:
1. The fees here are very high.
2. Cash transfers in hit my USD account very quickly but the ACH out still take 3 to 5 days.
3. Google Authenticator app is a requirement...( "F" Google! They do not need to know what I do with CC)
4. The trading page is the reverse of Gemini so it can be confusing to me.

I will add more in a later installment.

Again to be clear I am not advocating CC or any company mentioned here just describing my experiences. Feel free to chime in as desired.
« Last Edit: June 08, 2021, 05:28:42 PM by Raptor »
I will never claim to to have all the answers. Depending upon the subject; I am also aware that I may not have all the questions much less the answers.

As a result I am always willing to listen to others and work with them to arrive at the right answers to the applicable questions.

Offline Raptor

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Re: Crypto Currency for Preppers.
« Reply #1 on: June 07, 2021, 01:09:30 PM »
Is Cryptocurrency something a prepper may need?

We have many discussions of SHTF and what a PAW would look like. There are as many definitions and opinions about a a PAW landscape as there are preppers.

I am going to use some stereotypical images.

The hollywood Walking Dead and Mad Max Paw:[/u]
The obvious answer to the usefulness of CC in this situation is that the only thing with value would be clean water, canned goods, RX and ammo. So no.

A PAW without electrical power (i.e. a post US Civil War civilization):
The obvious answer to the usefulness of CC in this situation is that paper money, PMs and physical assets would be useful but CC would not.

A PAW in which a USD currency collapse has occurred and like Post ww-1 Germany hyperinflation is the norm in the US:[/u]
In this situation FOREX, PM's physcial assets and CC would potentially be very useful. This is actually where CC could come into its prime spot due to the ease and speed of acquisition. In this scenario, land/property FOREX & PM all would require time and effort to attain. Physical FOREX may be very difficult to obtain and PM may likewise be difficult to buy. All of these require some form of translation into the local currency for acquiring goods. You have 1oz of gold but if you need a Big Mac how do you give MCD just the $5 they need? CC allows you sell CC in an amount sufficient to pay the $5 and send the USD to a debit/credit card to pay for the transaction.

The key question becomes then would CC also retain its value or would it be decimated like the USD. In 2008 we saw the financial crisis lead to a liquidity crisis which in turn decimated the commodity prices of PM. The deflation of value could occur to CC in a similar manner. Granted the prices of PMs recovered but short term we saw chaos. We saw this again in 2020 with the price WTI Crude in April and May when WTI went negative. CC are subject to market whims. Ironically in 2008 the USD was the only wealth store that held its value...everything else declined due to the deflation of asset values.

The above are not the only scenarios. I am sure there are many variations and permutations of the even the above that may or may not make CC useless or useful.

SWOT of CC for preppers:

Pros:
1 Once set up and verified CC provide a quick and easy (perhaps too easy) alternate form of currency.
2 The value is set by the market.
3 The value can be downloaded onto Cold wallets via a USB storage system or left on line for on line access.
4 You can store literally million$ on a simple USB stick aiding in concealment and transport of the CC.

Cons:
1 Key weakness is the requirement of functioning exchanges which need telecomm & power.
2 Physical security either on line or in the form of the cold wallet is a constant concern.
3 The value is set by the market and the market changes its mind...a lot ... constantly... 24/7/365. There is no value stability.
4 Taxes on transactions can be complex. (that is the subject of a later update)


Feel free to chime in to agree or disagree. All input is welcome.
« Last Edit: June 08, 2021, 05:32:11 PM by Raptor »
I will never claim to to have all the answers. Depending upon the subject; I am also aware that I may not have all the questions much less the answers.

As a result I am always willing to listen to others and work with them to arrive at the right answers to the applicable questions.

Offline Raptor

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Re: Crypto Currency for Preppers.
« Reply #2 on: June 07, 2021, 01:09:54 PM »
Does any CC have any "real" value.
That is a question that everyone asks about CC. Hell it is the reason I delayed so long in investigating it.
I assumed it was another CB radio craze or Tamagotchi when it first materialized.
I watched as the price varied for no reason other than demand.
I read about people losing 100's of BTC when a hard disk went bad.
I watched people sell physical chips that stored BTC in effort to make them tangible...which negated one of the key advantages of CC.

What good is something that does not exist in a physical sense? ... Something that fluctuates in value to such an extent that if you give or take them in trade, the item may be worth 10% more or less the instant you accept it.

These are all questions that you should ask yourself before doing anything with CC.

My answers to myself were simple:
The USD I hold in my hand was created out of thin air and is worth intrinsically only the value of the paper upon which it is printed...and the Fed is printing a bunch more.

The 1 oz gold coin has even less intrinsic value than the USD unless you have an industrial need for it. It is pretty and shiny.

A 1 ct high grade diamond is pretty but what can you do with it beyond scratch glass...again it is pretty and shiny.

I hold buy and sell stocks and bonds as store of wealth at prices dictated by a market (or so it is assumed) and I view these assets on a computer screen. In theory I could request paper shares but many companies now refuse to issue these paper shares. My ownership exists only as data in a chain of title.

I have very little cash on hand other than BOB cash. All of my currency is in a bank(s) that I access through my PC.

So I asked myself is BTC and ETH any less real than those things I now consider real. I decided that CC like PM's have a value set by 3rd parties for reasons that may or may not be market manipulative. If I accept the fact that 1oz of gold is worth ~ $1793 (at time I wrote this) then why can't a BTC be worth $52000? The best judge of value is the price a willing buyer pays a willing seller for an item.

So to me CC has a value (like PMs) the only question is not if it has a value but what is the value at the time of purchase and the moment of sale.

I paid $.98 a lb for Roma tomatoes 30 days ago last weekend I paid $1.19 for the same lb. I paid the extra cost because I wanted them. The logic for BTC value is the same.
« Last Edit: June 08, 2021, 05:33:04 PM by Raptor »
I will never claim to to have all the answers. Depending upon the subject; I am also aware that I may not have all the questions much less the answers.

As a result I am always willing to listen to others and work with them to arrive at the right answers to the applicable questions.

Offline Raptor

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Re: Crypto Currency for Preppers.
« Reply #3 on: June 07, 2021, 01:10:35 PM »
One thing that no one has mentioned yet are NFTs. (Non Fungible Tokens)

I think many missed the significance of this "new" and rising trend.

The CC proponents talk about the ease with which CC will be used in the future for everything real estate transfers and other such large transactions. This IMO this is many decades away for a wide variety of reasons that are too involved to list.

That said the NFTs give us a glimpse of one unforeseen use of CC (I know someone will chime in and claim they knew it... :clownshoes:) It is in the NFT world. Many works of art and literature are digital. Many sports contracts now include NFT rights to videos of players making monumental plays. An NFT can be a video of say a touchdown, a hole in one or other sports events. It can be a file of any type, PDF, MPEG, JPEG, etc.

It is this market alone that will provide value at some level to CC since the creation of an NFT requires use of CC to certify the black chain.

An NFT also has the unique ability to collect a % of any future sales and uses of an NFT.

An NFT is difficult for some to grasp but to put it simply if you look at an artist like Picasso. He would make an original work. Then make limited editions of the same work followed by second, third even 4th editions. The original is worth orders of magnitude more than the 4th edition. How do you know that a Picasso is the original? An expert(s) will inspect and verify it. The NFT uses the same basic process but with much greater accuracy by the unique and documented block chain the NFT contains.

The rise of NFTs and they are taking off will assure that CC will retain some level of value. BTW every NFT has the cost of the CC built into the price.

How does this benefit the prepper? Right now it does not. It is however an aspect of the CC that you should research before diving in too deep in CC. The CC that most of the recent large value NFTs have used is Etherium. That said most CC can be used for an NFT.
https://www.theverge.com/22310188/nft-explainer-what-is-blockchain-crypto-art-faq
https://ethereum.org/en/nft/
« Last Edit: June 08, 2021, 05:33:18 PM by Raptor »
I will never claim to to have all the answers. Depending upon the subject; I am also aware that I may not have all the questions much less the answers.

As a result I am always willing to listen to others and work with them to arrive at the right answers to the applicable questions.

Offline Raptor

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Re: Crypto Currency for Preppers.
« Reply #4 on: June 07, 2021, 01:11:32 PM »
Crypto and Taxes.

This is the one real Achiles heel of CC right now. The tax treatment is awkward and punitive. It is likely to get even more punitive if and when the tax code is changed.

First point: This post is not legal or tax advice; always consult with your tax advisor...people have very different tax situations.
Second point: Tax laws change all the time and it is likely to change radically in the future....so see point 1 above.

In 2020 for the first time ever; every taxpayer filing a 1040 will be required to answer a yes or no question about their use of CC.
https://www.irs.gov/pub/irs-pdf/f1040.pdf
Remember you are answering that question under the penalty of perjury, be truthful.
This treatment of CC alone should be a foretaste of changes that the .gov has in store for the tax treatment of CC.


The present law treats CC in a manner similar to stocks, bonds and securities.
https://www.irs.gov/businesses/small-businesses-self-employed/virtual-currencies
Link to IRS FAQ on CC issues.
https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions

In other words any purchase, transfer and or sales must be tracked and any gain (& loss) that results from any sale, transfer, use or exchange must be reported as either a short term or long term capital gain. Any receipt of CC must be reported and if it is payment for services that CC value at the time of the transfer is treated as taxable wages.

You would typically report these gains and losses on a Schedule D each year that go along with a 1040 or 1040SR.

Thus you must keep detailed records of purchases, sales, exchanges into other forms CC and payments made with CC. Each one of these will require a line item on the Schedule D. So if you buy a $5USD trinket with CC you need to report the basis (purchase price) of the CC used. The value of the CC at the time of the purchase (note that value can vary widely daily) and any difference is a capital gain or loss. Then you must determine whether that gain/loss is a long term or short term gain or loss.
https://www.investopedia.com/articles/personal-finance/101515/comparing-longterm-vs-shortterm-capital-gain-tax-rates.asp

Understand that these rates will likely change (for the worse) but basically ST are taxed at ordinary income rates and LT are taxed at lower rates. That said it is possible to have a silly high tax bill from using CC as a means to purchase things or exchange into another CC.

What is required then event is a massive bookkeeping effort with platforms that unlike brokerage houses are not geared to help you track these transactions. With a brokerage house, I can print out both realized and unrealized gains & losses on a daily basis and have all of the information I need to file a Schedule D. Neither Gemini nor Coinbase Pro at this time have a similar function. I have to download all transactions into Excel sort them and manually compute my gains/losses. It is not hard for me but it a real PITA to me because I know this can be automated and I do not have to do this for other investing activities.

So as an example lets say you made big $$$ in CC and have a 10x gain in 2021 and use it to buy a shiny object. That object cost $1,000. You made 10X on your CC so your basis for that shiny object is lets say $100. You have incurred a short term (held less than a year) capital gain of $900 in this example.(1000 Shiny object - $100 in CC) = $900 gain. If your federal & state marginal income tax rate is say 35% (easy to do if you live indoors in CA or NY) then that $1,000 item will result in a tax bill of $315. So your shiny object in addition to sales tax and income tax would cost you $1,315.

So in addition to PITA reporting requirements (do not even think about not reporting these transactions) you potentially have a very tax inefficient process if you use CC for any retail transactions.

Now lets talk about the current tax position. Right now the IRS treats CC as a security/bond/FOREX transaction. This can change and there is precedent for treating it differently for capital gains purposes...and not for the benefit of the holder of the CC.
Several classes of items are taxed currently at 28% capital gain rates since they are "collectibles".
https://www.thetaxadviser.com/issues/2019/nov/taxation-collectibles.html

Several items within that classification do not allow the deduction (or even netting with gains like gambling losses) of any kind of loss. The gains are of course fully taxable but any losses you are SOL as far deducting them.

It would be simple and actually within the power of the power of the IRS to classify all CC as collectibles and tax them accordingly.

The Key Take Away for Preppers:
If you invest and purchase/sell CC keep very good records and prepared to file properly all required tax disclosures and pay the requisite taxes. factor these higher costs into any CC activity.
« Last Edit: June 08, 2021, 05:33:37 PM by Raptor »
I will never claim to to have all the answers. Depending upon the subject; I am also aware that I may not have all the questions much less the answers.

As a result I am always willing to listen to others and work with them to arrive at the right answers to the applicable questions.

Offline Lambykins

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Re: Crypto Currency for Preppers.
« Reply #5 on: June 07, 2021, 07:01:01 PM »
Okay...lets go back to NFTs...which honestly, I really don't understand that well.
Some articles and videos I have read/watched, have said that some NFTs are being traded much in the same way as stocks, bonds, crypto currency.
And that NFTs can be traded for OTHER NFTs without involvement of cash/CC or any other *tangible* asset.
(such as; I'll trade you 3 Michael Jordan dunks for 2 Brett Favre touchdowns or whatever)
Since NFTs really don't have a tangible value in a case like that, how would the IRS manage to tax that?
Or does the IRS wait until somebody in  NFT trading decides to cash out?

Also, I thought the main attraction in CC was that it created monies that could not be tracked by the IRS, Inland Revenue (UK) or any other government entity.
I honestly have a problem understanding how a government entity can tax something that doesn't really *exist* except in the ether of the digital world.
"But what I do have are a very particular set of skills, skills I have acquired over a very long career, skills that make me a nightmare for people like you." Taken

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Offline boskone

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Re: Crypto Currency for Preppers.
« Reply #6 on: June 07, 2021, 07:40:03 PM »
Okay...lets go back to NFTs...which honestly, I really don't understand that well.
Some articles and videos I have read/watched, have said that some NFTs are being traded much in the same way as stocks, bonds, crypto currency.
And that NFTs can be traded for OTHER NFTs without involvement of cash/CC or any other *tangible* asset.
(such as; I'll trade you 3 Michael Jordan dunks for 2 Brett Favre touchdowns or whatever)
Since NFTs really don't have a tangible value in a case like that, how would the IRS manage to tax that?
Or does the IRS wait until somebody in  NFT trading decides to cash out?
NFTs are basically just tokens of ownership for digital assets.  Aside from the weird "owning something with no physical presence" thing, they act just like any other asset: you pay your money, claim the value, and the government decides how much money they want to leave you.

Quote
Also, I thought the main attraction in CC was that it created monies that could not be tracked by the IRS, Inland Revenue (UK) or any other government entity.
I honestly have a problem understanding how a government entity can tax something that doesn't really *exist* except in the ether of the digital world.
Well, the US dollar doesn't actually exist either; it's basically just people broadly agreeing it's worth something, not by something tangible like gold or silver.  It's called a "fiat currency" (unrelated to the car brand), and there are advantages and disadvantages, just different ones than a specie-backed currency.

So a cryptocurrency is basically a non-governmental fiat currency, and it's worth something because people have decided it's worth something.  Now that even governments agree it's worth something, it's treated as an asset; a bar of gold, a plot of land, a bitcoin, you get taxed regardless.

(The specific values of taxation are different, because...well, the US tax system is completely loony.)

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Re: Crypto Currency for Preppers.
« Reply #7 on: June 08, 2021, 07:27:26 AM »
Also, I thought the main attraction in CC was that it created monies that could not be tracked by the IRS, Inland Revenue (UK) or any other government entity.
I honestly have a problem understanding how a government entity can tax something that doesn't really *exist* except in the ether of the digital world.
Well, the US dollar doesn't actually exist either; it's basically just people broadly agreeing it's worth something, not by something tangible like gold or silver.  It's called a "fiat currency" (unrelated to the car brand), and there are advantages and disadvantages, just different ones than a specie-backed currency.

So a cryptocurrency is basically a non-governmental fiat currency, and it's worth something because people have decided it's worth something.  Now that even governments agree it's worth something, it's treated as an asset; a bar of gold, a plot of land, a bitcoin, you get taxed regardless.

(The specific values of taxation are different, because...well, the US tax system is completely loony.)
Totally agree that the tax system is nuts.
I understand the fiat currency system/reality.
Here's where things confuse me as far as cryptocurrency goes; they were initially created (as far as I understand) to keep the government (whichever one you live under) out of your financial business.
They were touted as the perfect way to wheel and deal in some of the underground economies that exist in the digital world, and then, as they were more generally accepted, as a way to keep your finances private and secure from governmental entities.
Say you live in the US and you manage to buy Bitcoin from a private entity based in Panama.
Everything is done in the digital world.
Maybe your bitcoin allows you to invest in a digital company  based in Prague.
Now, your financial endeavors are spread in three countries, everything is digital.
My question:
If nobody involved tells them, how does the IRS know you hold these assets?
Not advocating anything illegal, just genuinely curious how the hell what was touted as an anonymous private financial system can be tracked by the IRS and other gov't. entities.
"But what I do have are a very particular set of skills, skills I have acquired over a very long career, skills that make me a nightmare for people like you." Taken

"There is no such thing as a fair fight. Fight dirty EVERY time. Dirty fighters win, fair fighters lose. Every fight is a fight for your life. Fight to win. Fight dirty." My dad

"Am I dangerous? Ask any of my surviving exes..." Me

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Re: Crypto Currency for Preppers.
« Reply #8 on: June 08, 2021, 08:06:43 AM »

If nobody involved tells them, how does the IRS know you hold these assets?

I'm from a different continent & juristiction and I'm definitely not a lawyer, but as I see it, the IRS is unlikely to ever know. However, by putting that line in your tax return, if you don't declare it you've broken the law and if the IRS *do* find out you could end up in trouble.

CC seem to be treated as barter in the UK. If you swap a cow for a bag of beans, chances are HMRC will never find out but if they do find out and take an interest, you'd better hope you've declared any capital gain on your tax return.

https://accountingweekly.com/bartering-and-tax/
"A bartering transaction may also involve payment by other means, for example payment by vouchers, or the use of a cryptocurrency like Bitcoin, or even airline air-miles. Bartering is an arrangement that two parties often come to naturally because of wants and needs."

And of course, CC do leave a paper trail (of sorts) so the IRS are more likely to find out about your CC than they are your bag of beans.

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Re: Crypto Currency for Preppers.
« Reply #9 on: June 08, 2021, 08:49:57 AM »

If nobody involved tells them, how does the IRS know you hold these assets?

I'm from a different continent & juristiction and I'm definitely not a lawyer, but as I see it, the IRS is unlikely to ever know. However, by putting that line in your tax return, if you don't declare it you've broken the law and if the IRS *do* find out you could end up in trouble.

CC seem to be treated as barter in the UK. If you swap a cow for a bag of beans, chances are HMRC will never find out but if they do find out and take an interest, you'd better hope you've declared any capital gain on your tax return.

https://accountingweekly.com/bartering-and-tax/
"A bartering transaction may also involve payment by other means, for example payment by vouchers, or the use of a cryptocurrency like Bitcoin, or even airline air-miles. Bartering is an arrangement that two parties often come to naturally because of wants and needs."

And of course, CC do leave a paper trail (of sorts) so the IRS are more likely to find out about your CC than they are your bag of beans.
Actually, that made things a little clearer for me, although I will probably remain a bit confused  on all things stocks/bonds/CC/NFT/whatever.
"But what I do have are a very particular set of skills, skills I have acquired over a very long career, skills that make me a nightmare for people like you." Taken

"There is no such thing as a fair fight. Fight dirty EVERY time. Dirty fighters win, fair fighters lose. Every fight is a fight for your life. Fight to win. Fight dirty." My dad

"Am I dangerous? Ask any of my surviving exes..." Me

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Re: Crypto Currency for Preppers.
« Reply #10 on: June 08, 2021, 04:22:55 PM »
The claim that CC is anonymous at least for most CC is very much incorrect.

BTC and ETH for instance use a blockchain process that tracks the CC from its creation and original owner all the way to the last holder of record in the blockchain. In fact that is the reason for part of its value. It cannot be forged or replicated. The blockchain actually prevents false CC from being used.

This blockchain of title is very much public and anyone can with tools see where their BTC/ETH (or even minute portion thereof) originated and whose hands it flowed through. It does not work if that was not the basic premise.

This link explains the tech:
https://www.investopedia.com/tech/what-cryptocurrency-public-ledger/

This is one of many sites that the public blockchain ledger can be id'ed.
https://www.blockchain.com/explorer


This public ledger is the core for NFTs. It provides a public record of the NFT's creation that (so far at least) cannot be replicated.

If you look at an NFT as signed piece of art with a letter of authenticity from an expert, the blockchain is that letter of authenticity.

 
If nobody involved tells them, how does the IRS know you hold these assets?
Not advocating anything illegal, just genuinely curious how the hell what was touted as an anonymous private financial system can be tracked by the IRS and other gov't. entities.

Right now they are working on that issue right now. In the meantime it is a self reporting issue and if you fail to self report you can expect a lot of unpleasantness from the IRS (not sure about the Inland Revenue). As noted the blockchain records every transaction. It is the taxman's dream tool for catching anyone with illegal or under reported transactions.

Now Coinbase and Gemini do send out 1099 annually for any US citizen with transactions over $600. You can expect this reporting to be expanded.
 https://www.reuters.com/business/wealth-manager-ruffer-exited-11-bitcoin-bet-amid-worries-over-risk-2021-06-08/

This from Bitcoin itself.
https://bitcoin.org/en/protect-your-privacy


 
« Last Edit: June 08, 2021, 04:32:27 PM by Raptor »
I will never claim to to have all the answers. Depending upon the subject; I am also aware that I may not have all the questions much less the answers.

As a result I am always willing to listen to others and work with them to arrive at the right answers to the applicable questions.

Offline Raptor

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Re: Crypto Currency for Preppers.
« Reply #11 on: June 09, 2021, 10:21:07 AM »
El Salvador becomes the first country to approve BTC for legal tender purposes. You can use BTC for everything including payment of taxes.

https://www.wsj.com/articles/el-salvador-becomes-first-country-to-approve-bitcoin-as-legal-tender-11623234476
Quote
El Salvador’s legislative body passed a law early Wednesday that will make the nation the first in the world to deem bitcoin legal tender.

The designation allows bitcoin, the world’s largest cryptocurrency by market value, to be used to pay taxes. Businesses would also be obligated to accept bitcoin for payment, though those without the ability to process those payments would be exempt, according to the bill. Converting bitcoin into other currencies will no longer be subject to capital-gains tax.

To allow the automatic convertibility of bitcoin to U.S. dollars, El Salvador’s government said it would set up a trust at the Development Bank of El Salvador. The Latin American country, one of the region’s poorest, has struggled over the years to manage its finances and has used the U.S. dollar as its official currency since 2001.

Obviously El Salvador has a troubled economy and poor banking infrastructure. The flexibility of BTC exchanges are vast improvement for many of the people. That said BTC still has significant inherent problems and this will not impact them.

So why point this out?
Because this example will allow us to watch a scenario in BTC is incorporated  into a country's economy. This IMO one CC strength in which a poor economy with little infrastructure can (may?) benefit form greater flexibility offered by CC.

Again I am not promoting CC and/or offering only my opinion.

Caveat Emptor.

I will never claim to to have all the answers. Depending upon the subject; I am also aware that I may not have all the questions much less the answers.

As a result I am always willing to listen to others and work with them to arrive at the right answers to the applicable questions.

Offline Lambykins

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Re: Crypto Currency for Preppers.
« Reply #12 on: June 09, 2021, 06:06:45 PM »
"But what I do have are a very particular set of skills, skills I have acquired over a very long career, skills that make me a nightmare for people like you." Taken

"There is no such thing as a fair fight. Fight dirty EVERY time. Dirty fighters win, fair fighters lose. Every fight is a fight for your life. Fight to win. Fight dirty." My dad

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Re: Crypto Currency for Preppers.
« Reply #13 on: June 21, 2021, 12:39:35 PM »
A good article on the benefits of CC in countries with poor fiscal policies and countries that rely on the USD sent home from expats:

https://finance.yahoo.com/news/understanding-latin-america-rising-interest-150000174.html


Quote
However, the Salvadoran president’s main motive is to improve the economic well-being and financial inclusion in a country where 70% of the people have no access to banking or borrowing facilities.

Around 20% of El Salvador’s GDP comes from money sent home by migrants. This causes additional difficulties with international transfer fees and inefficiencies in the system. It can sometimes take several days to send such funds.

I will never claim to to have all the answers. Depending upon the subject; I am also aware that I may not have all the questions much less the answers.

As a result I am always willing to listen to others and work with them to arrive at the right answers to the applicable questions.

 

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