Topic: [ANN][NOTE]DNotes - Celebrating DNotes 3rd Birthday - Forum Now Open - page 53. (Read 814545 times)

Perhaps a 20 year grace period to to give the industry a chance to take off will be a good thing.

Agreed, doesn't make a lot of sense. I don't know how they do it for gold mining, but I'm glad you mentioned that as it could be a reference point for further investigation as I'm sure the gold mining process is very similar.

That is too bad, they could provide a fairly simple answer and always revise the rules as needed. Simplicity and clarity are needed.

It really doesn't make sense to tax it that way and I'm sure it will be challenged by someone. Mining bitcoin, in my opinion, should be classified as business income, with the $ value you received on sales constituting income. You are then eligible to deduct all your expenses to arrive at taxable income. You are producing a 'product', just as you are if you were a gold miner, and assigning a value as each oz of gold comes to the surface is ridiculous.

There are so many rules that makes this subject to interpretation. In Canada (not sure about US), there is a 30 day rule when buying and selling the same security to prevent people from selling to declare a loss and then buying back in within 30 days. The way the asset rule is now, they are essentially saying mining is buying, which makes it almost impossible to keep track of things with the 30 day rule. Tally things up at year end and be done with it! 

There is also a capital gains rule about certain 'repetitive' buy and sell activity (which I believe mining will fall into) being classified as business income (higher tax rate).

This was just a couple of tax rules off the top of my head. There are probably hundreds of different case scenarios, showcasing the need for accountant education in crypto!

Morning, D.! I will refrain from opining; it's not my field. However, I will say that governments are responsible to reasonably quickly, and openly and transparently, publish Whatever Guidelines They Do Choose.

The Australian Government has disgraced itself in this, producing unclear -- and therefore 'anti' -- guidelines, and doing so at glacial speeds, and doing so with an ear cocked to the incumbents. It took the Tax Office nearly a year to answer a single question!

Mark

Great find Chase! I enjoy watching and reading Tony Robbins material. This is a good primer for anyone interested in digital currency.

The taxation as an asset created at the time it was mined is a bit more tricky. The process and classifications for tax purposes needs to be better defined for miners. I feel it shouldn't be taxed until it is spent or otherwise converted, and at that time the value is derived, for tax purposes. Making it an asset, determining the value at the time it is mined, then declaring a profit or loss at the time it is converted or spent makes it almost impossible to keep track of and leaves far too many questions unanswered.

What does everything think the ideal taxation rules should be (for miners, but feel free to share your thoughts on other scenarios)? (could make a good DCEBrief article)

Tony Robbins, one of the most famous motivational speakers in America, has a blog that helps people with financial literacy. This is one of his latest posts. There is still the criminal mention, but I honestly believe that will subside when people are properly educated.


WHAT YOU NEED TO KNOW ABOUT BITCOIN

A SIMPLE GUIDE TO THE NEW CURRENCY THAT EVERYONE IS TALKING ABOUT

Trying to explain bitcoin is like trying to explain the Internet to someone in the 80s, as Vox so aptly put it; or even the 90s if you remember the video of the then-younger Today show hosts trying to comprehend the Internet. The reason it’s so difficult to explain (and understand) is because like the Internet before it, bitcoin is a brand new concept.

WHAT IS BITCOIN?

At its most basic component, bitcoin is a crypto-currency. Meaning, it is a digital system of (non-physical) ‘tokens’ which have an ascribed value and are used for trading goods or services, much like cash or credit.

Like other currencies and commodities, the value of bitcoin fluctuates wildly based on supply and demand and its perceived value. At the time of this writing the value of a bitcoin is $414.22 US. However, these coins can be broken down into smaller units, the smallest being one hundred millionth of a bitcoin – called a Satoshi, after the anonymous founder of bitcoin.

The digital system of bitcoin was founded upon matematical proof. The mathematical rules of bitcoin stipulate that there can only ever be 21 million bitcoins. So unlike other currencies, no more can be printed. Despite the finite number, not all 21 million have been ‘mined’ yet, so more are being discovered every day.

HOW DOES IT WORK? AND WHAT IS ‘MINING?’

Instead of using middleman – say, a bank – to hold the records of all transactions, the records (known as a ledger) are held publically by a network of computers across the world. Every time a transaction occurs the ledger is updated across the network.

The network is composed of computers that solve open source mathematical cryptographic problems in order to add ‘blocks’ to the network, known as the blockchain. It’s a little like solving a riddle in a computer game that then reveals a part of the game that was previously inaccessible. In return for solving those problems, the computer’s owner receives bitcoins. The mathematical algorithm adjusts in level of difficulty so that bitcoins are not released into the world too quickly. This process is known as mining.

Anyone with a computer that is sophisticated enough to solve the algorithm can become a miner. The exact number of miners changes all the time, but experts estimate as many as one hundred thousand currently operate.

Because the digital system runs on a peer-to-peer basis, everyone is the network holds their own copy of the ledger. It gets rather complicated from here, but essentially that network timestamps the transactions and creates a unique math problem for every transaction that occurs. Then every computer in the network must solve the problem and check the answer for accuracy. For a more technical video explanation, see here.

However, you don’t have to be a miner to use bitcoin. You can use bitcoin through a sort of online wallet, or account.

WHAT SEPARATES BITCOIN FROM CURRENCIES THAT HAVE GONE BEFORE IT?

Bitcoin is decentralized. No single bank, government, company or individual owns the network or has control over it. This means that your accounts can never be frozen, a government cannot devalue the currency, it can be used in every country, and, more ominously, because of the anonymous nature of bitcoin, the technically savvy can avoid taxation and use bitcoin as payment for any kind of illegal good or service.

(Note: In the U.S. bitcoin is currently taxed as a capital asset. Miners who produce bitcoin must declare the fair market value of their digital currency on the day it was mined as income, as do contractors who are paid in bitcoin.)

WHY HAS IT BEEN IN THE NEWS SO MUCH?

Bitcoin has the potential capability of changing how the world handles finances, but there are still problems with it.

Many people only know of bitcoin’s reputation by its association as a favorite payment method of criminals and the widely publicized New Silk Road, due to its anonymity. But as the former head of the New Silk Road discovered, discovery and prosecution are still possible.

There have also been reports, some very recent, that claim bitcoin has failed or will fail. The network has thus far weathered all storms, but some of its investors have not been so fortunate. When the largest bitcoin exchange of the time – Mt. Gox – suddenly shut down in February of 2014, investors collectively lost $460 million worth of bitcoin.

If bitcoin adoption continues to grow, the financial structure as we know it will be altered — but no one still really knows how.

http://humanelevation.tonyrobbins.com/blog/money/what-you-need-to-know-about-bitcoin

Excellent TeeGee! Can't wait to see what you have written on the DNotes story for the book and look forward to our meeting tonight.

Digital Currency Weekly Recap 2-21-2016

Lisk to Partner with ShapeShift for ICO.
Brain Wallet Security Deficiencies Confirmed by Researchers.
No Timetable for China’s Launch of its Own Cryptocurrency.
ECB Contemplates Elimination of 500-Euro Note.
Kraken: Mt Gox Liquidation Enjoying ‘Significant Progress’.

http://dcebrief.com/digital-currency-weekly-recap-2-21-2016/

who knows
like you I have a passion for technology that looks at the world with different eyes ...
(No matter how cold the winter is, after there is always spring)

Excellent to see some cooperation here,

Perhaps there can be some headlines about how Mike Hearn was wrong huh!

Just wrote another 2 thousand or so words of draft content, 4am, sleep time!

look forward to our Skype later - just over 8 hours.

This is good news and should give the industry some stability.


Bitcoin Miners Back Proposed Timeline for 2017 Hard Fork

Stan Higgins | Published on February 20, 2016 at 22:58 GMT

A group of bitcoin miners constituting close to 80% of the network hashrate, as well representatives from exchanges, service providers and contributors to the Bitcoin Core development project, have proposed a development timeline for scaling the bitcoin network.

The statement’s release comes after a more than 18 hour-long meeting in Hong Kong that drew participants from China's bitcoin mining community and members of the Bitcoin Core team.

Some of the letter's signatories were party to a previous statement that voiced opposition to any "contentious hard fork" to the bitcoin network.

According the proposed timeline, Bitcoin Core contributors Matt Corallo, Luke Dashjr, Cory Fields, Johnson Lau and Peter Todd will produce and recommend code for a hard fork to the bitcoin network that would feature a block size increase. The code for this proposal is expected to be made available by July.

Read more:

http://www.coindesk.com/bitcoin-miners-back-proposed-timeline-for-2017-network-hard-fork/

Awesome. You must be a long-term investor.

Here is another good quote:

"The ability to consistently execute large scale strategic plans flawlessly is the hallmark of a best in class business. Make that a worthy goal of your company."

Alan Yong
Feb. 20, 2016

Here is a pretty good link explaining a bit more: https://www.quora.com/How-is-Hyperledger-different-than-Ripple . It doesn't appear to require a currency to run the ledger, just uses a "consensus process". It is a very interesting project that we are following to determine if there will be opportunities for DNotes. I've signed up for the mailing list: http://lists.hyperledger.org/mailman/listinfo

Hyper ledger looks promising as a decentralized ledger, or i guess a centralized one of you wanted. Similar to a blockchain but requires no currency? I will be interested to learn more about how it works.

Great article. I just wish they didn't elude to bitcoin being potentially untraceable for use with criminal activity.

for me it is a pleasure
exactly Dyna what I meant to say ..

 

Another update to help spread out the buy orders, including over the course of an individual hour. A little bit more proactive error handling added as well. You may download here. This will likely be the final Alpha release, doing some testing over the next couple days, and a little cleaning up. After that we can look at some of the other options.

Good article. Thanks for posting.