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Bitcoin crash coming (2 Viewers)

Thanks for the brief analysis @DrStrange

I understand there are finite Bicoins available, if you trust the person or people that write the code, do what does that mean to the people late in the game in the next decade assuming there are no more Bitcoins to be mined ?

Also the argument that bitcoin can be broken into smaller denominations by just moving the decimal point (currently 8 times ) so there will always be room for growth, is a little like saying we shouldn't worry , if we can't print anymore dollars, we can always go back to using 1/2 penny's :confused:
 
MatB said:
Thanks for the brief analysis @DrStrange

I understand there are finite Bicoins available, if you trust the person or people that write the code, do what does that mean to the people late in the game in the next decade assuming there are no more Bitcoins to be mined ?

Also the argument that bitcoin can be broken into smaller denominations by just moving the decimal point (currently 8 times ) so there will always be room for growth, is a little like saying we shouldn't worry , if we can't print anymore dollars, we can always go back to using 1/2 penny's :confused:
Click to expand...
From my understanding, once all have been mined the bit coins miners will have to live off of transaction fess. I'll see if I can pull up the article that I read somewhere concerning what happens when all have been mined
 
MatB said:
Thanks for the brief analysis @DrStrange

I understand there are finite Bicoins available, if you trust the person or people that write the code, do what does that mean to the people late in the game in the next decade assuming there are no more Bitcoins to be mined ?

Also the argument that bitcoin can be broken into smaller denominations by just moving the decimal point (currently 8 times ) so there will always be room for growth, is a little like saying we shouldn't worry , if we can't print anymore dollars, we can always go back to using 1/2 penny's :confused:
Click to expand...
David O said:
From my understanding, once all have been mined the bit coins miners will have to live off of transaction fess. I'll see if I can pull up the article that I read somewhere concerning what happens when all have been mined
Click to expand...


Here is where I read that what-happens-bitcoin-after-all-21-million-are-mined
 
Also I'm just reading now, that there are approximately 176,000 unconfirmed transactions that are a couple of days old.

So basically you sell your bitcoin at $17,000
But the transaction doesn't go through for a couple of days and when it does you only have $14,000 ?
 
MatB said:
Also I'm just reading now, that there are approximately 176,000 unconfirmed transactions that are a couple of days old.

So basically you sell your bitcoin at $17,000
But the transaction doesn't go through for a couple of days and when it does you only have $14,000 ?
Click to expand...
So how much you going to put into Bitcoin?
 
MatB said:
Also I'm just reading now, that there are approximately 176,000 unconfirmed transactions that are a couple of days old.
Click to expand...
Something like that. The exchanges apparently don't have the capacity to process all the transactions on demand, so they get queued up in FIFO order.

The queue is large enough that it causes me to suspect the exchanges of creating that situation intentionally. Now that the futures market is open, delaying transactions could be highly profitable to someone if they can see the queued-up transactions.
 
If," ["the management consultant"] said tersely, “we could for a moment move on to the subject of fiscal policy. . .”
“Fiscal policy!" whooped Ford Prefect. “Fiscal policy!"
The management consultant gave him a look that only a lungfish could have copied.
“Fiscal policy. . .” he repeated, “that is what I said.”
“How can you have money,” demanded Ford, “if none of you actually produces anything? It doesn't grow on trees you know.”
“If you would allow me to continue.. .”
Ford nodded dejectedly.
“Thank you. Since we decided a few weeks ago to adopt the leaf as legal tender, we have, of course, all become immensely rich.”
Ford stared in disbelief at the crowd who were murmuring appreciatively at this and greedily fingering the wads of leaves with which their track suits were stuffed.
“But we have also,” continued the management consultant, “run into a small inflation problem on account of the high level of leaf availability, which means that, I gather, the current going rate has something like three deciduous forests buying one ship’s peanut."
Murmurs of alarm came from the crowd. The management consultant waved them down.
“So in order to obviate this problem,” he continued, “and effectively revalue the leaf, we are about to embark on a massive defoliation campaign, and. . .er, burn down all the forests. I think you'll all agree that's a sensible move under the circumstances."
The crowd seemed a little uncertain about this for a second or two until someone pointed out how much this would increase the value of the leaves in their pockets whereupon they let out whoops of delight and gave the management consultant a standing ovation. The accountants among them looked forward to a profitable autumn aloft and it got an appreciative round from the crowd.
 
I have been long enough in the financial markets to see similar bubbles: dot.com in 2000 when everyone and their mother were buying stocks at crazy valuations, just because they are somewhat related to internet. Credit crisis in 2008 when risk associated with corporate debts (before complete spill-over to all other assets) was way too low and banks were lending like crazy left right and center without proper risk assessment.

And now the same story unfolds. Everyday brings us (or used to bring us) its share of "good" news that keeps the fire burning but at the end of the day it will all collapse. It is so obvious! the only buyers today and newbie wannabe speculators. Who in his right ming will want to buy bitcoin or other crypto when it will stop appreciating? people are only buying (or were buying) because of potential upside.

the END is near
 
MatB said:
Thanks for the brief analysis @DrStrange

I understand there are finite Bicoins available, if you trust the person or people that write the code, do what does that mean to the people late in the game in the next decade assuming there are no more Bitcoins to be mined ?
Click to expand...

You don't need to trust the person(s) who wrote the code. Computer code doesn't lie. The bitcoin protocol has to be right up there as one of the most scrutinized pieces of code in history. As it stands today there is a fixed supply of 21,000,000 bitcoins. What people need to be aware of is that although improbable, it is still POSSIBLE for the bitcoin supply to increase in the future. A majority consensus of stakeholders would be needed among other things.

Ultimately what you do need to trust in is the politics of bitcoin. We all know what happens when big money and especially concentrated wealth meets politics. In my opinion, the political aspects of bitcoin will ultimately be its Achilles heel. Bitcoin vs Bitcoin Cash, block size limit controversies etc.
 
Señor Tony said:
You don't need to trust the person(s) who wrote the code. Computer code doesn't lie. The bitcoin protocol has to be right up there as one of the most scrutinized pieces of code in history. As it stands today there is a fixed supply of 21,000,000 bitcoins. What people need to be aware of is that although improbable, it is still POSSIBLE for the bitcoin supply to increase in the future. A majority consensus of stakeholders would be needed among other things.

Ultimately what you do need to trust in is the politics of bitcoin. We all know what happens when big money and especially concentrated wealth meets politics. In my opinion, the political aspects of bitcoin will ultimately be its Achilles heel. Bitcoin vs Bitcoin Cash, block size limit controversies etc.
Click to expand...


This is the part i'm having some trouble with also.

The idea of bitcoin is a non centralized currency, where no one government or bank has control. But bitcoin can have its code re written if a majority of stake holders agree to it. So who writes that code? who sits down at a computer and decides what that code is? obviously some code was written by a suspiciously secret person a decade or so ago. Does it not concern anyone who holds bitcoin that at the end of the day all you are holding is code that can be re written?
 
MatB said:
This is the part i'm having some trouble with also.

The idea of bitcoin is a non centralized currency, where no one government or bank has control. But bitcoin can have its code re written if a majority of stake holders agree to it. So who writes that code? who sits down at a computer and decides what that code is?
Click to expand...

Lots of people much more intelligent and articulate than myself have written about this. Start here for some basics https://www.coindesk.com/short-guide-bitcoin-forks-explained/

MatB said:
obviously some code was written by a suspiciously secret person a decade or so ago. Does it not concern anyone who holds bitcoin that at the end of the day all you are holding is code that can be re written?
Click to expand...

Someone logs into their bank app on their portable device or web browser. They enter their password/pin/fingerprint/face and are greeted with their savings account balance: Flexi Ultra Saver Account Balance $103,403.23. But what does this number actually represent?

Does this number represent $103,403.23 worth of physical currency in my banks ultra secure safe downtown? No.

Does this number represent $103,403.23 worth of gold stored in my banks ultra secure safe downtown? Absolutely not.

Does this number represent $103,403.23 worth of assets held by the bank that they can sell quickly and then give me the money? No way Jose.

Welcome to the world Fractional Reserve Banking.

Your current bank account balance is just numbers on a screen, code. If I go down to my bank today and tried to take out $103,403.23 I would most likely be told "We are very sorry Sir but we do not have this money at our bank. Please return in 2-3 working days to retrieve your deposit". Now think what happens when 100 people go down to their local bank to close all their accounts and get their money out..... what about 400 people... 500?... 10,000?? Ask the people of Argentina what can happen to your bank account deposits when SHTF.

Bitcoin/crypos are highly speculative and highly risky. Would I recommend to family/friends to put 5, 10 or 15% of their net worth/investments into bitcoin at this point in a price cycle? Heck no. Am I personally comfortable with 1% of my net worth in crypos? Absolutely. When my speculative investments (gambles) fail and I lose 1% of my net worth will I still be able feed my family, retire early (hopefully) and keep a roof over our heads? Yes. When/If/As these highly speculative investments grow to become >10% of my net worth, will I re-balance these risky investments back to 1% range, yes!

I haven't used bitcoin as a currency since this latest cycle of increasing prices started. It just doesn't function as a useful currency for me anymore. I can't guarantee that my payment will arrive in an acceptable time frame and I can't do it as cheaply as I used to be able to.
 
DrStrange said:
1. One thing that makes money valuable is that it is backed by the central government. You are compelled to pay many things in US Dollars (in the USA). The government pays its bills in US Dollars. I can not pay my property taxes in gold bars, Euros or Bitcoins - I must pay in US Dollars. My tax refund, social security payments and similar transactions are all paid in US Dollars by the government. The US government mandates that debts can be paid in dollars and that merchants are required to accept payment in US Dollars . By fiat this creates a community who agrees that dollars are worth something. There is no such entity that mandates the use and acceptance of bitcoins....

-=- DrStrange
Click to expand...
Fun fact:
It's actually a long perpetuated myth that there's some sort of Federal law that US businesses are required to accept US money, they never had to, & still don't.
If you actually wanted, you can open a retail shop, & only accept broken VCR's, empty beer bottles, and Peruvian coins as payment, it perfectly legal & your choice, as is putting up a sign saying " No bills over $20, no pennies, or whatever ...
The statement on currency saying "Legal Tender for all debts public and private" refers to an actual debt only ( pre-existing condition) .. When a person walks into a retail shop & starts to browse, there is no pre existing debt between the shop owner & customer ...
However, if you tried to pay your credit bill 90 days later, & the holder of the debt refused US Currency, a judge could actually absolve you of the debt, since you tendered legal currency and it was refused .......
.
From the US BEP Laws & regulations Webpage:
https://www.moneyfactory.gov/resources/lawsandregulations.html

Legal Tender: A Definition
Section 31 U.S.C. 5103. Legal Tender
"United States coins and currency (including Federal Reserve notes and circulating notes of Federal Reserve Banks and national banks) are legal tender for all debts, public charges, taxes, and dues. Foreign gold or silver coins are not legal tender for debts.
However, there is no federal statute which mandates that private businesses must accept cash as a form of payment. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. "
 
Last edited:
Blaster said:
Fun fact:
It's actually a long perpetuated myth that US businesses are required to accept US money, they never had to, & still don't.
If you actually wanted, you can open a retail shop, & only accept broken VCR's, empty beer bottles, and Peruvian coins as payment, it perfectly legal & your choice, as is putting up a sign saying " No bills over $20, no pennies, or whatever ...
The statement on currency saying "Legal Tender for all debts public and private" refers to an actual debt only ( pre-existing condition) .. When a person walks into a retail shop & starts to browse, there is no pre existing debt between the shop owner & customer ...
However, if you tried to pay your credit bill 90 days later, & the holder of the debt refused US Currency, a judge could actually absolve you of the debt, since you tendered legal currency and it was refused .......
.
From the US BEP Laws & regulations Webpage:
https://www.moneyfactory.gov/resources/lawsandregulations.html

Legal Tender: A Definition
Section 31 U.S.C. 5103. Legal Tender
"United States coins and currency (including Federal Reserve notes and circulating notes of Federal Reserve Banks and national banks) are legal tender for all debts, public charges, taxes, and dues. Foreign gold or silver coins are not legal tender for debts.
However, there is no federal statute which mandates that private businesses must accept cash as a form of payment. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. "
Click to expand...


Timely article

https://www.msn.com/en-us/money/mar...ut-they-don’t-care/ar-BBHm7p0?ocid=spartanntp
 
bitcoin.jpg
 
lnlver said:
View attachment 143687
Click to expand...

Her bigger problem may be that she might not be able to ACCESS those Bitcoins. Just like the millions of lost Bitcoins so far, many are likely to be left to surviving members of the family without proper instructions on how to find them, access them, etc.
 
MatB said:
This is the part i'm having some trouble with also.

The idea of bitcoin is a non centralized currency, where no one government or bank has control. But bitcoin can have its code re written if a majority of stake holders agree to it. So who writes that code? who sits down at a computer and decides what that code is? obviously some code was written by a suspiciously secret person a decade or so ago. Does it not concern anyone who holds bitcoin that at the end of the day all you are holding is code that can be re written?
Click to expand...

Great point. But does it not concern us that our elected officials can re-write existing laws and add $1 trillion, $10 trillion or $20 trillion to our country's debt? And by doing so, continuously devaluing our currency, our purchasing power and even in a few decades, potentially our economic and political standing in the world? This is not to condone the issue you raised with the Bitcoin code and community, but it is a reality almost all countries, from third world to the developed nations, deal with all the time.

I personally don't believe/agree there will always be a finite number of Bitcoins. The creation of Bitcoin Cash out of 'thin air' is a clear example of adding to the supply of Bitcoin and yet maintaining the allure of the original crypto currency with its supposed limited supply. Yes, mathematically Bitcoin's supply may be limited to 21 million, but as we have seen with the forks so far, it is possible (and very likely probable) to see more supplies (of various names) in the future.
 
MatB said:
So who writes that code? who sits down at a computer and decides what that code is? obviously some code was written by a suspiciously secret person a decade or so ago. Does it not concern anyone who holds bitcoin that at the end of the day all you are holding is code that can be re written?
Click to expand...

This is the fundamental problem I have with the whole thing. Anonymity = no accountability
 
I've started my adventure. Finally got my bank account and credit cards setup on Coinbase and initiated my limit of $750 via credit card for instant transfer and then another $250 via bank transfer that will take until the 24th.

Moved the $750 from Coinbase to Gdax and then to Binance and just waiting for it to show up. I'll give this a go with 1K and see what happens :)
 
Anthony Martino said:
I've started my adventure. Finally got my bank account and credit cards setup on Coinbase and initiated my limit of $750 via credit card for instant transfer and then another $250 via bank transfer that will take until the 24th.

Moved the $750 from Coinbase to Gdax and then to Binance and just waiting for it to show up. I'll give this a go with 1K and see what happens :)
Click to expand...

Can you just transfer money from Coinbase to Gdax and then Binance or you are transferring coins?
 
Just as a public reminder to sellers of crypto securities who are US citizens / green card holders ( even if you live outside the USA) . . . .

Every time you move from one crypto security to another or to cash you have an unique taxable event.

1) You are required to report every sale of a crypto security on schedule D of your federal tax return, match it to a purchase and report the gain or loss. If you are trading a couple of times a week, then you'll have a hundred +/- transactions on that year's tax return. Gains/losses are capital gains/losses.

2) Miners are strongly encouraged to seek competent tax advice as to when to report income and how to characterize it. Treating this as a do-it-yourself project could lead to severe consequences.

3) The wash sale rules often will trip up speculators when they find some of their losses can't be used to offset gains. (been there, done that, have the scars to remind me) https://www.investopedia.com/terms/w/washsalerule.asp

4) The chance of getting caught for non-compliance is higher than most people think. Treasury is already looking at crypto securities as high risk areas for money laundering, other financial crimes and as a part of other on-going criminal activity. This is not to say you are a criminal for owning crypto securities just that such assets are prone to getting a higher level of scrutiny. There is often no statute of limitation for failure to report income, the price for non compliance discovered many years after the fact will be astonishingly high.

5) The wheels of justice are slow. Sales you make in January 2018 aren't reportable until April 2019 or later. The tax authorities might not take official notice for a couple more years - say 2021 / 2022. You might think you got off scott-free about your untaxed gains only to get called to account years later.

6) Keeping good records is in your best interests.

7) The mere fact you traded in crypto securities might become proof of willful noncompliance. The secretive nature of the asset and its infrastructure and the negligence of the trading exchanges to report transactions to US taxing authorities could take civil tax problems and make them into criminal tax problems.

8) Is a "bit-coin wallet" a "foreign" bank account? To the best of my knowledge, this question has not be tested or resolved. People who hold accounts in foreign lands must report them each year when they file their regular tax returns. The short hand for this report is "FBAR" - report of Foreign Bank And Financial accounts. The consequences of non-compliance are DRACONIAN. Do not screw this up. Get professional advice. No kidding, get professional advice. Oh - one more happy thought - even if you got professional advice but it turns out the advice was in error, you still might get pounded by the full force of the law.

https://www.irs.gov/businesses/smal...t-of-foreign-bank-and-financial-accounts-fbar

Failure to follow US tax law regarding crypto securities is a mistake, don't blow this off.

There is no crying in tax court -=- DrStrange
 
DrStrange said:
1) You are required to report every sale of a crypto security on schedule D of your federal tax return, match it to a purchase and report the gain or loss. If you are trading a couple of times a week, then you'll have a hundred +/- transactions on that year's tax return. Gains/losses are capital gains/losses.
Click to expand...

This part confuses me...

So I need to pay capital gains on a crypto to crypto transaction even though I have not removed any of it from the market, therefore have zero income from it?

I'm pretty sure you only ever have to pay capital gains taxes if you remove funds from the market, IE, took income from it. Without taking income from it, how would I pay the capital gains?

As long as the money stays in the market you don't have to pay capital gains, correct?
 
Yes Sir, every crypto security trade is generally taxable. At least that is the rule in the USA. Perhaps Canadian rules are different.

A stock market investor reports the gains and losses on securities being traded even though the owner never removes value from the account. Every investor would love not to be taxed until they drew down their investments for consumption. That is not the way it works outside of a personal retirement account.

The taxing authorities do not much care where you get funds from to pay your owed taxes (obvious exceptions noted). There is rarely a year where I don't have to pull money out of investment accounts to pay taxes on investment income. If you make serious money trading crypto securities, you will pay taxes from investment accounts too.

Real Estate investors and holders of some other tangible assets have a special rule for swapping "like kind" investments, but even then they have to report each transaction while deferring some/all of the tax liability. I would not encourage anyone to assert crypto securities fall under the "like kind" rules without expert advice. Though that would be better than complete non-reporting and risking enhanced civil and criminal penalties.

Bottom line takeaway - - - - get professional advice. Exotic or basic investments are generally going to be subject to the same tax rules.

Sorry to be popping anyone's bubble -=- DrStrange
 
This seems to be a common trend in the crypto market year in and out. Right now we're coming up on the Chinese New Year so like those in the West took money out for our holiday season, the same is happening there, resulting in a price drop in the market.

That opens it up as the best time of year to invest because this is when prices are at their lowest in the crypto market, before tax season hits and people spend more money and the crypto skyrockets again

market.jpg



I just put in 1K to play around, but given the timing I've got another 8K on its way into the market so I can capitalize now. If Bitcoin can drop to between 5-8K I could pickup a whole bitcoin and I believe this year it's going to hit somewhere between 40-60K
 

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