Author Topic: Cryptocurrency -- Is anyone on-board?  (Read 54272 times)

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Offline hwj-d

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #225 on: December 17, 2017, 05:36:39 pm »
In a high trust monocultural society such as Japan this is less of an issue. There is still the concept of shame of government dependence, there is a level of trust that the rich will keep the differences civilized and have the best interests for the nation at heart.

It's only when morality, trust and shame get ground to dust that this becomes truly an issue. Multiculturalism has killed the spectre of fascism, but we have enough democracy to vote ourselves communist if we really want to. If the bread and circuses decrease a little too quick because of another economic crisis we might do so, propaganda can only control the population if they boil the frog slowly enough.
...cough...

Believe me, there is only one law out there, and that means "PROFIT"
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Online Marco

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #226 on: December 17, 2017, 05:43:29 pm »
Low growth rates and an oversized financial industry accustomed to bail outs encourage risk taking, the Fed is powerless to change that.

Lets say the target rate was 5% and US government went into more debt because of higher financing cost, with the Fed just happily buying whatever the private market wouldn't because they deemed the debt "unsustainable". This would drive inflation and still make the financial industry chase higher risk investments to beat inflation.
« Last Edit: December 17, 2017, 05:50:49 pm by Marco »
 

Offline WastelandTek

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Online Marco

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #228 on: December 17, 2017, 06:14:10 pm »
There is no magical point of internal government debt where it becomes unsustainable. Any interest government pays to it's own central bank just comes right back, it doesn't have any cost for government. It's just numbers in a computer, we're not running out of numbers any time soon.
 

Offline Mr. Scram

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #229 on: December 17, 2017, 06:18:33 pm »
There is no magical point of internal government debt where it becomes unsustainable. Any interest government pays to it's own central bank just comes right back, it doesn't have any cost for government. It's just numbers in a computer, we're not running out of numbers any time soon.
The central bank isn't always part of the government.
 

Online Marco

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #230 on: December 17, 2017, 06:24:59 pm »
The Fed is a penstroke away from nationalization and only takes a tiny commission in the big scheme of things. Pretty much all interest the government pays the Fed just flows back to government, they are not allowed to just pocket all profits.

Only the ECB is independent of national governments in a meaningful way, but that's not really a central bank. The Euro is a weird incompetently put together monstrosity.
« Last Edit: December 17, 2017, 06:26:33 pm by Marco »
 

Offline mtdoc

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #231 on: December 17, 2017, 11:24:15 pm »
There is no magical point of internal government debt where it becomes unsustainable. Any interest government pays to it's own central bank just comes right back, it doesn't have any cost for government. It's just numbers in a computer, we're not running out of numbers any time soon.

Government debt is owed to bond holders. Only a relatively small percentage of US debt is owned by the Fed. The US central bank (AKA the Fed) is a private organization owned by banks (but with a facade of government oversight). It is extremely naive to think that could be easily changed.

History has shown that once government debt exceeds 100%of GDP, things do not end well  ( see Reinhart and Rogoff’s This Time Is Different: Eight Centuries of Financial Folly )

It’s only the US dollar’s privileged position as the world’s reserve currency that allows the US to sustain such large debt with little apparent consequence. This is not a guaranteed permanent arrangement.
 

Online Marco

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #232 on: December 18, 2017, 01:43:08 pm »
The US and the dollar are a bit special, but if the appetite for debt at insignificant interest rates disappears the Fed can take over without catastrophic things happening. The US has a massive trade deficit, but it has an even more massive internal economy ... even if forced into trade balance it can manage just fine.

Show me a country in history with a relatively healthy current account deficit which just used its government debt in its own fiat currency as roundabout taxation which collapsed its economy because of it ... you can't, because that has not happened in the 8 centuries before. History has no parallel for the stuff happening now. Not with the Euro, not with domestic fiat based government debt, not with international trade agreements. We're unhinged from history.

New Zealand's structural current account deficit in combination with international foreign investment agreements is more of an economic danger than Japan's debt.

PS. as for nationalizing the Fed being difficult, the US government already confiscated all their gold with the stroke of a pen. The Fed whined a whole lot about it, didn't help them. They aren't constitutionally protected ... even the supreme court won't help them, unless it's being corrupt as hell.
« Last Edit: December 18, 2017, 05:48:01 pm by Marco »
 

Offline Decoman

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #233 on: December 18, 2017, 05:29:38 pm »
I don't understand why Trump is in the public talking about how wrong China is, by having USA in this great debt.. to China, as it that was somehow unfair, I mean USA would be free to create debt with everybody else anyway. I am also assuming that this talk of there being an unimaginably large debt to foreign countries like China, is all state debt and not consumer debt (but maybe I am wrong thinking this). Being a European my general interest in such things is very limited, as I have better things to do than keeping track of some other country's debt.
« Last Edit: December 18, 2017, 05:32:37 pm by Decoman »
 

Online Marco

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #234 on: December 18, 2017, 06:04:07 pm »
Debt in your own fiat for a sovereign nation is nothing more than paper, the problem with mercantilism for the US is the loss of industrial base and autarky. The US doesn't really need the world to maintain a high standard of living. So if there is value in autarky (and there is, though it's not PC to say so) the US should be protective of its internal industry.
 

Offline hwj-d

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #235 on: December 18, 2017, 06:29:39 pm »
Don't worry, everything will be fine... |O

https://youtu.be/8U5ty2DcyxY

« Last Edit: December 18, 2017, 06:36:57 pm by hwj-d »
 

Online Bicurico

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #236 on: December 18, 2017, 07:24:33 pm »
I have a question.

Imagine I would have bought 1000 Euro worth of bitcoin a few years ago and they at now worth 170.000 Euro.

If I would sell them, how would I justify to the bank aka taxes where this money comes from? How would I be taxed?

Imagine I would buy a house and pay with those bitcoin. How would I justify where the money has come from, I my salary is not enough to buy a house?

How does that work? How can I prove it was an "investment" in bitcoin?

Regards,
Vitor

Offline WastelandTek

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #237 on: December 18, 2017, 07:25:55 pm »
Vitor

capital gains, or whatever they call it in your jurisdiction

But perhaps the better question is why is it any business of the bank, or the State for that matter, where your resources have come from?  Why should you have to "justify" the fact that you invested well?
« Last Edit: December 18, 2017, 07:28:13 pm by WastelandTek »
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Online Bicurico

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #238 on: December 18, 2017, 07:30:09 pm »
Hi,

I understand that, but how do I actually prove the providence of this captial gains, if all has been done online through non accredited entities?

Sorry, if this is a dumb question . I never bought or sold bitcoin.

If I make captial gains through shares, the bank takes care of everything.

If I buy and sell foreign money and make a profit, I have at least bank documents stating what I bought and sold.

How does it work with bitcoin?

And is it taxed like shares or other captital gains like interest rates (i.e. much less than profit from labour)?

EDIT (to reflect update of post above this one): because everyone should pay taxes of any income?

Regards,
Vitor

Offline Mr. Scram

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #239 on: December 18, 2017, 07:38:04 pm »
It largely depends on the local tax rules. It took a while for tax agencies to catch on, but most have specific rules how they view and deal with Bitcoin.

To answer your question, you may have to prove you invested in the past in Bitcoin. They can then calculate the expected gains based on how the market did. If there's a large discrepancy, you might be looked at long and hard to make sure it's not whitewashing or criminally gained money. In most cases, you will have to prove the money is legit. It's one of the cases where the burden of proof is on you.
 

Online Bicurico

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #240 on: December 18, 2017, 07:51:29 pm »
The reason I ask:

I live in Portugal and due to the recent financial crises where Portugal had to receive EU "aid" from TROIKA, citizens are heavily scrutinized.

Everything (almost everything) you purchase will (should) be invoiced with your tax number. This is to prevent a parallel economy where resellers and service providers don't declare a significant amount of their the transactions. In order to erradicate this practice, everyone should be asking for a receipt with the fiscal number. To endorse this and educate the people, the finance department has some sort of lottery, where a randomly selected invoice will give the fiscal number holder a price (previously a car, now 50.000 Euro).

As a consequence, if you spend more money than you declare on your tax form, you will certainly be investigated. Any money that lands on your bank account over 500 Euro has to be justified. There is so much control over your money, it is actually scary! If you want for instance give a friend 1000 Euro, you need to declare this and pay taxes (I am not arguing how easy it is to circumvent this)! Also, it is forbidden to pay any transaction over 500 Euro (I think it is 500 Euro - the limit may be 1000 or 2000 Euro) in cash!

Your house, cars, etc. - everything is known to the finance department and if you own more than you can justify, you are in deep problems (unless you belong to the political class).

So this is why I asked, how people dealing with bitcoin have been handling the enormous increase in value. Of course you could just keep the bitcoin. You could spend it (not that easy, as only few items or services can be paid directly in bitcoin). So how do you take advantage of the value that bitcoin produced?

While this is not clear to me, I simply won't risk anything with bitcoin. And right now it seems pretty shady to me (from the viewpoint of the finance department).

Regards,
Vitor

Offline sleemanj

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #241 on: December 18, 2017, 08:14:09 pm »
But perhaps the better question is why is it any business of the bank, or the State for that matter, where your resources have come from?

Because large amounts of money (or expensive assets) suddenly turning up in the hands of somebody is often indicative of some criminal activity. 

The state, acting on behalf of the people in ensuring that criminal activity is detected does have a reasonable justification for asking about the source of large amounts of funds that suddenly turn up.

Of course, this does assume that the state is honest and sincere, unlike those cases in places like Texas with police departments conducting civil forfeiture and that sort of rubbish.
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Offline hendorog

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #242 on: December 18, 2017, 08:14:18 pm »
I would keep a paper record of the transactions and the wallet addresses. And a record of the transfer of your real money in, and the transfer of real money back out into your bank account.
I don't have any direct knowledge, but I expect the more information you can supply the better.

Since Bitcoin is a public ledger they can then go and look up your transaction and prove you are telling the truth.
Whether they have the technical chops to do this without a huge drama is another matter of course...



 

Offline Mr. Scram

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #243 on: December 18, 2017, 08:20:08 pm »
The reason I ask:

I live in Portugal and due to the recent financial crises where Portugal had to receive EU "aid" from TROIKA, citizens are heavily scrutinized.

Everything (almost everything) you purchase will (should) be invoiced with your tax number. This is to prevent a parallel economy where resellers and service providers don't declare a significant amount of their the transactions. In order to erradicate this practice, everyone should be asking for a receipt with the fiscal number. To endorse this and educate the people, the finance department has some sort of lottery, where a randomly selected invoice will give the fiscal number holder a price (previously a car, now 50.000 Euro).

As a consequence, if you spend more money than you declare on your tax form, you will certainly be investigated. Any money that lands on your bank account over 500 Euro has to be justified. There is so much control over your money, it is actually scary! If you want for instance give a friend 1000 Euro, you need to declare this and pay taxes (I am not arguing how easy it is to circumvent this)! Also, it is forbidden to pay any transaction over 500 Euro (I think it is 500 Euro - the limit may be 1000 or 2000 Euro) in cash!

Your house, cars, etc. - everything is known to the finance department and if you own more than you can justify, you are in deep problems (unless you belong to the political class).

So this is why I asked, how people dealing with bitcoin have been handling the enormous increase in value. Of course you could just keep the bitcoin. You could spend it (not that easy, as only few items or services can be paid directly in bitcoin). So how do you take advantage of the value that bitcoin produced?

While this is not clear to me, I simply won't risk anything with bitcoin. And right now it seems pretty shady to me (from the viewpoint of the finance department).

Regards,
Vitor
The solution is easy. Just keep proper records and declare the correct amounts.
 

Offline nctnico

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #244 on: December 18, 2017, 08:49:49 pm »
But perhaps the better question is why is it any business of the bank, or the State for that matter, where your resources have come from?
Because it is a criminal offense for the banks to support terrorism, money laundring, tax evasion and criminal activities in general. Without these measures it would be easy for (for example) North Korea to get their nuclear weapons & missiles program funded, for IS to organise terrorist attacks on foreign soil, etc, etc, etc. Do you want to live in such a world?
There are small lies, big lies and then there is what is on the screen of your oscilloscope.
 

Offline Mr. Scram

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #245 on: December 18, 2017, 09:30:04 pm »
Another major factor, which might be practically a bigger one, is that the state wants a cut. If you don't properly declare your assets and income, they can't take their cut.
 

Offline hwj-d

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #246 on: December 18, 2017, 10:47:09 pm »
And, please, this cut and control is about the little man's money. The big ones in general have other possibilities that means company investments, almost tax-and control free, the sale of companies to foreign investors, and the particular "lax" behavior of the authorities against large parts of the real estate market, e.g. in germany, which is not only known for insiders for money laundering.
« Last Edit: December 18, 2017, 10:52:14 pm by hwj-d »
 

Offline nctnico

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #247 on: December 18, 2017, 11:36:08 pm »
I'd love to hear from those who have had a more experience than I do with Crypto, what lessons have you learnt so far?
1) Buy and HOLD.
2) Don't panic and sell on the dips, just use it as an opportunity to buy more.
The problem with that is that you never know when it is going to peak. I have waited for 4 years to sell the cryptocurrency I mined.
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Offline james_s

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #248 on: December 19, 2017, 12:11:33 am »
The problem with that is that you never know when it is going to peak. I have waited for 4 years to sell the cryptocurrency I mined.

That's the case with any speculative investment, it's nothing other than gambling, which is fine as long as one understands what they're getting into. The value is rising based on speculation, no real value being put into the system. For you to make money requires others to lose money, somebody has to be left holding the bag. The money *has* to come from somewhere.
 

Offline rrinker

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Re: Cryptocurrency -- Is anyone on-board?
« Reply #249 on: December 19, 2017, 12:12:52 am »
 Of course now that it's hit some highs - I figured I could use the $300+ dollars that ONE Litecoin I have is worth. Actually, i ended up with a bit over 1 LTC when I also converted all the Dogecoins I mined into LTC. However, one big giant  :palm: :palm: :palm: :palm: :palm:  It's been 4 years since I did anything with mining and - I forget my LTC wallet passphrase!  :palm: :palm: :palm: So far guessing has not worked - and I have a limited set with slight variations that I use everywhere, too.

 


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