Cryptographic currencies are an ongoing source of comedy gold rather than actual gold. Values wildly fluctuate. After being repeatedly asked about crypto currencies, I investigated in more detail. I was aware of leading currencies, such as BitCoin, Ethereum, Monero, ZCash and, after a ridiculous conversation at my local makerspace, pornographic currencies, such as WankCoin, TitCoin, TittyCoin, AssCoin and ArseCoin. Of these, TitCoin is the most viable. Why? Young women, colloquially known as cam-whores, install applications and get paid TitCoin in exchange for showing their breasts or more explicit acts. Surely TitCoins are worthless? No, cam-whores exchange TitCoin for BitCoin which can be used to obtains drugs, designer clothing or high value gadgets via illicit channels and/or major retailers.
That explains why people sell TitCoin but who buys it? The ownership of many cryptographic currencies are skewed towards early adoptors. Most famously, a pizza was exchanged for 10000 BitCoin. In Dec 2017, the same currency had a market value exceeding US$200 million. Indeed, the mysterious Satoshi Nakomoto, who released a working BitCoin implementation in Jan 2009, should be listed as one of the world's richest people. Such people want to diversify out of major cryptographic currencies into minor alternatives - even ones such as DogeCoin which started as a variant of a LOLCat joke and now has a market capitalization exceeding US$50 million. People who quite obviously haven't done any due diligence are also buying a broad spread of currencies.
Many people speculate about the identity of Satoshi Nakomoto. Some speculate that he is a Brit with yellow fever who works late. Others speculate that he is a time traveller from the future and this is more plausible than some theories. I thought there was an unlikely possibility that he was one of the regular customers from my time working in an Internet café. During this period, said customer described to me a "picket fence" data-structure where each block signs the last and a grid of computers sign each other's blocks. Said customer appears to alive, well and living a perpetual holiday on a tropical island. Reading the original paper from Satoshi Nakomoto neither confirmed nor refuted my suspicion but it does much to resolve hand-waving descriptions from journalists who don't understand anything or people who willfully mis-understand because they have something to sell.
Remember all of the fun we had with file sharing? BitTorrent and its many derivatives are able to transport large quantities of data with fidelity due to integrity checks provided by tiger trees or Merkle trees where each branch has two children. This binary tree allows a BitTorrent peer to rapidly discard blocks of data with checksum failures. BitCoin and its many derivatives gain integrity from a Merkle chain where each branch (usually) has one (persistent) child. If multiple blocks have a valid checksum, there is a strict preference for the block which advances the most transactions.
At this point, I had enough understanding to look for weaknesses, such as deliberately processing small blocks of data to get ahead of parties with more resources. This doesn't work. I also considered weaknesses in the cryptography. BitCoin's Merkle chain uses two rounds of SHA256. This was considered bad practice when released and I was specifically told this by the picket fence guy. However, after Edward Snowden confirmed that SHA was deliberately weakened by the NSA, it appears that BitCoin may have been structured with inside knowledge (or the fore-knowledge of a time traveler). The integrity of the first "genesis" block is also predicated on no inside knowledge and no tricksiness with hashes. For all evaluated schemes, the block hashing and public key wallets are vulnerable to quantum attack. Schemes with zero-knowledge proofs offer no additional protection.
People have been preoccupied by the details of various financial schemes and I am reminded of the Douglas Adams quotation "This planet has - or rather had - a problem, which was this: most of the people living on it were unhappy for pretty much of the time. Many solutions were suggested for this problem, but most of these were largely concerned with the movement of small green pieces of paper, which was odd because on the whole it wasn't the small green pieces of paper that were unhappy." Despite this, I thought that the major attack surface was the cryptography - until I looked at the code. I forgot that BitCoin had forked repeatedly but the original paper has a reference to what is now "BitCoin Classic". Code for this is run from a GitHub repository which runs on a continuous development cycle with no tagged branches or releases - or any more professionalism than the toy projects which I post on SoylentNews. After downloading a 7MB PKZip and looking at the contents, my initial response was "Oh, holy crap! I'd rather run systemd!" It requires the Boost C++ financial library. Unfortunately, that's the good part. By volume, the majority of the code is C++ templates to implement a custom peer-to-peer protocol. That would be the magic part of Magic Internet Money and it appears to have less due diligence than the average SSL library. The protocol may have multiple buffer overflows. I considered this and I concluded that a worthwhile attack would be to re-write wallet addresses so that nodes in a network profit the attacker rather than their owner. I mentioned this at my local makerspace and I was told this couldn't be possible. Within two weeks, SoylentNews reported an ASIC mining implementation which was vulnerable to this attack. With limits, it is also possible to get a node to mine the attacker's choice of currency.
Even if a reference implementation is clean and compiled with a clean, bug-free compiler, derivative implementations may be tweaked for throughput and have any type of critical bug. There is also the matter of Turing complete scripting for cryptographic currencies. Some people consider this a feature because it allows "smart contract" state machines. However, implementation has been quite lacking. Ethereum gets most of the attention in this matter. For example, a bad method invocation cost speculators US$36 million. However, BitCoin implementations also have some of this functionality. Specifically, BitCoin contains a virtual machine with two stacks. Ordinarily, I strong advocate the use of virtual machines with two (or more) stacks but not without back-checks, on flaky x86 servers, which are readily hacked, via a protocol implemented outside of the virtual machine, known to have critical bugs.
Cryptographic currencies have other problems. Key management remains a cryptographic problem and it is fairly guaranteed that keys from the top 10 wallet management applications are snooped and stored by various governments. As an example, the US Government had no difficulty when recovering funds from the SilkRoad trading system. There is also the matter of Byzantine General Problem. Although it is demonstrably solved when the number of nodes is relatively constant, it does not cover the case a net split. So, when China, Iran, Turkey or the Fourth Reich Of North America disconnects from the Internet, buy TitCoin, spend it lavishly and enjoy yourself. When the connection is restored and the block chains reconcile, the Magic Internet Money may find its way back to you. At this point, go and invest in something which is only moderately insane, like pork belly futures.
The current state of digital money shows promise but it also shows that so much more can be achieved. The perfect currency is:
- Widely accepted.
- Cannot be stolen.
- Cannot be traced.
- Cannot be unilaterally diluted.
Historically, the full set of attributes was considered to be an absurd contradiction. In a mythical world where bugs get fixed before features get written, we can have a digital currency which has all of this and more. However, there are some baseline attributes which have been implicit in physical artifacts and now need to stated explicitly. In the manner that database consistency has four criteria and object oriented programming has four criteria, digital currency also requires four criteria:
- Currency requires scarcity. The ideal digital currency is fully instantiated from the start. Any scheme which is unbounded (Ethereum) or deferred (BitCoin) dilutes in an attempt to lure speculators. Multiple scams have been executed with undifferentiated BitCoin code.
- Currency must not be Turing complete. To quote Doge: Much bad.
- Currency must work outside of a server environment where mains electricity and global network routing are not guaranteed. At present, digital currencies are a proxy for energy consumption. In the long-term, a system is required which has an unrestricted light-radius; suitable for Earth, Mars and beyond.
- Currency must mitigate against cryptography failures.
Under current power structures, a full or partial solution is a very bad idea. The type of person who is most able to understand and develop digital money is more likely than average to fall afoul of such a system. This year, you may profit from digital currency. Next year, you may not be able to feed yourself or shelter yourself without a government approved, government authorized mark. Digital money isn't going to disappear but liberty is at risk if we don't develop a system which meets the four criteria of traditional money and the four criteria of digital money.
Related Stories
Something odd is going on in finance this week. One unit of BitCoin briefly exceeded the value of a troy ounce of gold before it fell back. However, this occurred during Ethereum rallying to its current peak above US$100. Perhaps this is like comparing apples, oranges, and dog-biscuits but — as of this week — we now have a situation where Ethereum is well above the US$1 credibility threshold of most alternative digital currencies and, to a simpleton, BitCoin was more valuable than gold.
What changed? Nothing obvious. Banks have teams of shirking resume builders working on trendy projects and they've been working on digital currencies for years. Likewise, tranches of investments funds have been going into technology for decades. However, after puffing and bursting a housing bubble and educational bubble, is this the next place to jub other people's money? Is it Charles Stross' Accelerando coming to life? I don't know but I'll be very concerned if there is a financial wobble within the next month.
(External hyperlinks via Vinay Gupta, an Ethereum contributor, Ethereum evangelist and all-around great guy who helps the homeless.)
[Ed Note: Asking what is Ethereum? Me too. Additional information on the above topic can be found at the IB Times]
Satori—the malware family that wrangles routers, security cameras, and other Internet-connected devices into potent botnets—is crashing the cryptocurrency party with a new variant that surreptitiously infects computers dedicated to the mining of digital coins.
A version of Satori that appeared on January 8 exploits one or more weaknesses in the Claymore Miner, researchers from China-based Netlab 360 said in a report published Wednesday. After gaining control of the coin-mining software, the malware replaces the wallet address the computer owner uses to collect newly minted currency with an address controlled by the attacker. From then on, the attacker receives all coins generated, and owners are none the wiser unless they take time to manually inspect their software configuration.
Records show that the attacker-controlled wallet has already cashed out slightly more than 1 Etherium coin. The coin was valued at as much as $1,300 when the transaction was made. At the time this post was being prepared, the records also showed that the attacker had a current balance of slightly more than 1 Etherium coin and was actively mining more, with a calculation power of about 2,100 million hashes per second.
Story at ArsTechnica
On Fri 20 Apr 2018, SoylentNews published four criteria for analog currency and four criteria for digital currency.
On Mon 18 May 2018, Bank of England Staff Working Paper Number 725 by Michael Kumhof [former Stanford University economics professor] and Clare Noone [former Reserve Bank of Australia staffer] published four criteria for a Central Bank Digital Currency [CBDC]:
The core principles are: (i) CBDC pays an adjustable interest rate. (ii) CBDC and reserves are distinct, and not convertible into each other. (iii) No guaranteed, on-demand convertibility of bank deposits into CBDC at commercial banks (and therefore by implication at the central bank). (iv) The central bank issues CBDC only against eligible securities (principally government securities).
I'm not sure these count as four distinct criteria or that they are strong enough to be useful.
As reported in the Evening Standard, the Bank of International Settlements published an annual report with four criteria to continue economic growth. However, it was rather overshadowed by a statement in the appendix (reported here, here, here, here, here and elsewhere) where cryptographic currency was described as a "combination of a bubble, a Ponzi scheme and an environmental disaster".
I agree and so does a Canadian electricity company.
(Score: -1, Flamebait) by Anonymous Coward on Friday April 20 2018, @10:14AM (2 children)
Could author please do one on normal fiat currency first then maybe advance to crypto after? As it is he does not understand the first so has little chance of getting its bastard child.
(Score: 1, Insightful) by Anonymous Coward on Friday April 20 2018, @12:29PM (1 child)
TL;DR is basically my summary of the first two paragraphs. Didn't bother to read the rest.
First paragraph is spend half on porn-related coins... why? Second paragraph goes into the financials, starting with the first pizza bought with BTC (I was there that day), which was that value worth that day. Sure, you could take any amount and "times price now" and get a value that has little meaning these days. Same goes for the market cap, the big fluctuations tell you that value has little meaning.
(Score: 2) by realDonaldTrump on Friday April 20 2018, @01:54PM
The first paragraph is so interesting. I thought ButtCoin was a joke. Maybe it's not a joke. What about PussyCoin?
(Score: 5, Insightful) by MostCynical on Friday April 20 2018, @10:31AM (4 children)
"Mars and beyond"??
If anyone believes fiat currency is going to work "out there", they haven't done much reading about the history of any global frontiers.. Trade and barter, then sometimes company scrip, then, when there is sufficient law ebforcement, tradable paper bills, underwritten by a government, swappable because of agreements between governments.
The key word being *eventually*. Expecting crypto currencies to solve problems that global governments still can't mange is a bit like complaining your new car can't get aeroplane traffic control - it just isn't meant to.
"I guess once you start doubting, there's no end to it." -Batou, Ghost in the Shell: Stand Alone Complex
(Score: 2) by zocalo on Friday April 20 2018, @11:46AM (3 children)
UNIX? They're not even circumcised! Savages!
(Score: 4, Funny) by JNCF on Friday April 20 2018, @01:44PM (2 children)
Simple: EarthCoin, MarsCoin, and SolCoin. SolCoin has difficult mining and correspondingly huge block times, so that what planet you're on doesn't really matter. EarthCoin and MarsCoin are both planet-scale blockchains, with block times that are more amenable to buying lunch.
Note that this scheme can scale up and down -- SouthKoreaCoin, AndromedaCoin, etc.
Bonus points for implementing a single coin that can travel between blockchains of different scale without exchanging currencies. This seems a bit more tricky, but doable. Chains would need more confirmations to send coins to a chain with larger block times, and miners would still get a cut.
(Score: 1, Funny) by Anonymous Coward on Friday April 20 2018, @01:53PM (1 child)
Is the usecase for AndromedaCoin to be the currency when the andomeda galaxy is colonized? And people are already trading it today?
(Score: 2) by JNCF on Friday April 20 2018, @01:58PM
A theoretical proposal for the distant and unlikely future, love. I know of no actual AndromedaCoin, though I wouldn't be surprised if somebody has already made it as a joke. If we spread to Andromeda, we'll probably be quite a different than we are today.
(Score: 1, Informative) by Anonymous Coward on Friday April 20 2018, @11:06AM
I prefer this one:
https://thesaker.is/runaway-train-towards-full-digitization-of-money-and-labor/ [thesaker.is]
(Score: 4, Interesting) by Anonymous Coward on Friday April 20 2018, @12:47PM (1 child)
I don't see the problem with the deferred system. After all, it has worked well for gold over the millennia. It's not as if we dug out all the gold, and only then started to use it for money.
(Score: 2) by AthanasiusKircher on Saturday April 21 2018, @03:51AM
The point is that it can lure speculators, which it did in the case of gold. Or have you never heard of the various "gold rushes" that happened over the centuries? And the subsequent havoc that influx of gold caused in changing value? (I've read somewhere that a single egg in gold rush San Francisco would cost the equivalent of nearly $100 in today's currency due to inflation during the gold rush.)
Somehow gold fans seem to think that gold is magically immune to the wild swings of value and other problems that beset various currencies over the centuries. It was not and is not. Just like anything else, gold is only worth as much as someone else is willing to give you for it. Which can vary significantly depending on the time and circumstances.
(Score: 5, Insightful) by AndyTheAbsurd on Friday April 20 2018, @01:42PM (10 children)
Properties 2 and 3 above are in contradiction. If a currency cannot be stolen, you must be able to verify who the correct owner is by having a history of ownership transfers, back to some party that you trust. If a currency cannot be traced, you cannot have a history of ownership transfers, you must instead trust that whoever currently holds the currency is the proper owner.
Some people believe that BitCoin, etc. cannot be traced because the only necessary identifier is your wallet address. This is not true, the wallet address just serves as a pseudonym for you - if you attempt to actually use the wallet while Big Brother is watching, eventually those transactions can be traced to you. It may take time but it can be achieved.
Please note my username before responding. You may have been trolled.
(Score: 3, Interesting) by bradley13 on Friday April 20 2018, @02:42PM (5 children)
Well, yes, the properties he names are somewhat self-contradictory. However, he did say that they are ideals of a "perfect" currency. Which I take to mean: something to strive for. One can make a currency difficult to steal, and difficult to trace. Something like Monero leans in this direction.
The main thing we are missing is the "widely accepted". Wide acceptance would also have the effect of stabilizing the value. Also, "proof of work" needs to be replaced. It is wasteful, and there are better alternatives.
Everyone is somebody else's weirdo.
(Score: 2, Interesting) by Anonymous Coward on Friday April 20 2018, @03:01PM (1 child)
With the amount of energy spent on running/blocking javascript I doubt that will make much difference. Look at the typical webpage today and it will be less than 1% actual content by kB. People don't seem to actually care about waste. If anything proof of work will spur development of cheaper energy sources and using a deflationary currency will decrease the amount of wasteful spending people do (since they will save rather than buy crap).
(Score: 1, Interesting) by Anonymous Coward on Friday April 20 2018, @03:37PM
Has anyone ever calculated how much energy is wasted due to the ubiquitous DRM?
(Score: 3, Interesting) by JoeMerchant on Friday April 20 2018, @03:21PM
I couldn't agree more, but... I believe that "proof of work" is part of the psychology that has led to widespread adoption/acceptance of bitcoin as having value. If people could do the "proof of work" step without investing real-world money, all the players would be less inclined to HODL their coin and more inclined to sell for lower values.
🌻🌻 [google.com]
(Score: 4, Interesting) by Thexalon on Friday April 20 2018, @06:18PM (1 child)
There are reasons why it doesn't have wide acceptance though:
1. Most importantly, nobody really has any reason to bother. Potential customers holding Bitcoin also as a general rule have access to dollars, pounds, euros, yen, etc, so you aren't foregoing much if any business by not accepting Bitcoin.
2. The value of a Bitcoin is too volatile to set prices for things effectively. Say what you will about the Federal Reserve, European Central Bank, etc, the simple fact is that the value of a dollar doesn't change that suddenly. OK, maybe widely accepted Bitcoin would be less volatile, but as things currently stand nobody has reason to be the first mover on this.
3. Accepting any currency other than your nation's standard currency is a pain in the tuchas. Your bank can work with your company to, for example, accept Euro at a US company and vice versa, but there's a bunch of paperwork, exchange rates to worry about, extra variables to through at any payment processing system you have, etc. And with Bitcoin, odds are your bank can't do that for you, so now you're holding Bitcoin and have to set up a system to exchange them yourself for something you actually want. And per the volatility problem, what you can actually get for said Bitcoin is going to be highly variable day by day.
4. Taxes cannot as of yet be paid in Bitcoin. That means that you have to come up with some amount of your national currency each year to stay on the good side of government law enforcement. And if you need your national currency anyways, then it's a convenience to use it for other things.
5. Labor laws often require your employees be paid in your national currency. So if your company is taking in a ton of Bitcoin, you again have to exchange it any time you want to pay people that work for you.
Of those problems, I should also point out that only the last 2 problems are caused by the government. The other 3, which are caused entirely by private behavior, are more than enough to convince vendors not to accept Bitcoin or any other alternative privately-created currency.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 0) by Anonymous Coward on Saturday April 21 2018, @02:13AM
only sellouts, idiots and cowards pay income taxes.
(Score: 2) by JoeMerchant on Friday April 20 2018, @03:17PM
3. just isn't a property of currency, period.
Even one dollar bills are printed with serial numbers. Metal coins have the property of untraceability, unless you follow the person who is exchanging the coin - just as:
The problem with digital currency, and to a lesser degree paper money, is that the cost of counterfeit reproduction has become trivial. So, to satisfy 4. cannot be unilaterally diluted, you need to violate 3. cannot be traced.
I remain astounded at the length of time that the internet consensus understanding of Bitcoin was that it was untraceable. I only ever held one bitcoin, obtained for $4 back in 2010-ish, and sold for ~$200 in 2013-ish. The reality of that experience was: turning bitcoin to actual cash required working with an exchange that was a whole other layer on top of the bitcoin protocol.
🌻🌻 [google.com]
(Score: 0) by Anonymous Coward on Friday April 20 2018, @05:06PM (1 child)
You're confused. Items 2 and 3 are not contradicting. You don't need to trace ownership to a name, only to a claim. If I claim to own this BT, then you should be able to confirm that without knowing exactly who I am. I think BT allows that.
(Score: 2) by Thexalon on Friday April 20 2018, @07:38PM
That's impossible.
I might be able to have a record that, say, the BT in question is owned by user a4f612896ed10b. Which is all well and good, except now you need to stop somebody else, not necessarily using the same software you are, from saying "I'm user a4f612896ed10b, that's my BT" and spending your BT.
The same problem exists for dollars, which is why there's bureaucracies and automated systems set up to prevent bank fraud. There isn't an easy solution, especially when any identity-related information you can think of to store regarding user a4f612896ed10b that could verify you really are user a4f612896ed10b could also be easily copied by the bad guys.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 0) by Anonymous Coward on Saturday April 21 2018, @02:15AM
"If a currency cannot be stolen, you must be able to verify who the correct owner is by having a history of ownership transfers, back to some party that you trust."
not true if the author meant not "stealable" instead of a coin not having been stolen.
(Score: 4, Insightful) by Anonymous Coward on Friday April 20 2018, @02:44PM
We can have fun arguing your points or even challenging your thesis, but I found your article to be very interesting and I wanted to say that I am very appreciative that you wrote and posted it here.
(Score: 3, Touché) by All Your Lawn Are Belong To Us on Friday April 20 2018, @03:58PM (1 child)
So I wrote up a long summary of trying to understand the author's arguments and navigate the claims being made (most without substantiation). Then I decided that perhaps I'd like a nice cup of tea. That, plus this reads more like a journal entry, seems more likely.
This sig for rent.
(Score: 3, Informative) by JoeMerchant on Friday April 20 2018, @06:51PM
It actually was written like a typical professional journalism piece - enticing teaser in the opening paragraph, followed by entertaining twaddle with little substantiation, rounded out with vague hand waving suggestions about how things could be better. I'd swear that this is the same formula for every article I've ever read while waiting in a dentist's office.
🌻🌻 [google.com]
(Score: 3, Interesting) by Snow on Friday April 20 2018, @04:30PM (3 children)
I take issue with your requirements for a digital currency:
1 - Requiring scarcity - I strongly disagree about having the currency fully instantiated from the start. Take a look at Ripple as they essentially did just that. The result is a single entity holding virtually all the tokens. This centralization of 'wealth' is unfair and artificially infatuates the price of the token and the market cap. Ripple/Ripple Labs holds the majority of the tokens and the number of tokens that are actively traded is comparatively minuscule. Because of supply and demand (most of the supply is locked away), the token is able to hold a higher price that it should.
In the case of Bitcoin (not BitCoin), if all the tokens were generated in the genesis block, then Satoshi would own ALL the bitcoin. There would be no incentive for new people to mine and secure the network. The trickling out of Bitcoin over time subsidies the miners until the transaction fees are sufficient to maintain the network. That requires many, many transactions and will take time for the network to grow large enough to support that model. The subsidy was critical in bootstrapping the Bitcoin network and allowed a more fair distribution of tokens.
2. Turing Complete - You say it's bad because people can build on top of it and if they fuck it up, people lose money. That's correct, and people will lose money, but the options that an extensible blockchain enable are huge. Smart contracts are going to be big business. The alternative is a closed system. At least this way everything is in the public domain. I can create a smart contract system and enable it on a blockchain. It may suck and lose all your money, but you can create a better one and put me out of business. This is the wild west. There will be winners and losers.
3. Must work outside of server environment - Why? Why arbitrarily limit the amount of resources that can be used to join the network? Placing a limit like that limits the amount the network can grow (see Bitcoin). A currency needs to be able to be used by billions of people. Someone wants to run a node on a Raspberry pi? Fuck them.
If datacenter class machines are required, that's perfectly fine. Governments can run them; Universities can run them; Banks can run them. That's still decentralised. Regarding intersteller transactions, I think that's a problem that should be out of scope of the current implementations. Accepting transactions from locations with latency measured in the minutes/hours would complicate the double spend problem and potentially slow down earth-based transactions (ie ALL of them). When we actually have people living in space, then we can figure that problem out.
4. Crypto failure. Absolutely! And it is! Every node verifies the transaction and signature attached. If it's invalid, it gets dropped and the funds remain in the original location.
Also, some points about your perfect currency. Consider these points as well:
-- Fungibility
-- Store of value
-- Medium of exchange
-- Speed of exchange
(Score: 2) by JoeMerchant on Friday April 20 2018, @06:57PM (2 children)
Sorry, could you expand on: "Store of value" please?
What, if any, value is inherently stored in any fiat currency? I mean, even gold - it's hard to get, but until recent times it was basically worthless except for its scarcity and recognition as valuable.
"This note is legal tender for all debts private and public" - the government that backs up that statement lends value to their currency - value by the threat of jailing you and/or seizing your tangible and intangible assets when you don't pay your taxes, value through the (less than 100% effective) coercion of all merchants within the country to accept the currency of the realm rather than demanding another, but otherwise... the value of currency is the value of the paper it is printed on, or increasingly base metals from which the coins are struck.
🌻🌻 [google.com]
(Score: 2) by Snow on Friday April 20 2018, @07:07PM (1 child)
It stores value...
Say you are an apple farmer. You work really hard for a year and at the end of the year, you have a stockpile of 1 million apples. What good is that? They will quickly rot and storing a million apples requires a very large space. So, instead you trade those apples for currency that you can easily store and redeem at a later date for a good or a service. So, you can redeem something that has value in exchange for currency, and then exchange that currency back into something that has value.
The store of value isn't a property of the currency itself, but rather a social construct that you can exchange this token/coin/seashell/whatever for a good or service.
(Score: 2) by JoeMerchant on Friday April 20 2018, @08:05PM
Right, O.K. - so one might say that the U.S. dollar has a "store of value" in the 0.85 to 0.95 per year range (depending on the year) whereas the Mexican Peso often has a store of value closer to the 0.1 per year range, and your apples are closer to 0.005 store of value if stored as whole apples for a year, but perhaps that increases to 1.0 or even 1.1 for the first 5 years, if they are converted to cider, bottled and appropriately warehoused.
I've been holding Visa stock for the past 5 years, and our current social construct that has been experiencing CAGR of 20%+ over that time, while Facebook stock grew with 37% CAGR during the same 5 years (but isn't so pretty over the past 30 days...) volatility, growth, etc. Most major currencies devalue consistently over time, conservative (low volatility) investments seem to grow at a rate roughly counter to that devaluation of the currency (meaning: they don't devalue with the currency, but rather hold steady in terms of real world value, which is kind of sad seeing how much those companies strive for growth, and yet their total value barely outpaces inflation's erosion.)
🌻🌻 [google.com]
(Score: 2) by legont on Saturday April 21 2018, @01:12AM (1 child)
According to IRS they are basically property and gain/loss is taxed as capital gains. This means that every transaction has to be recorded by the user and submitted to the IRS. No, you can't get a summary form similar to 1099. You better have each and every transaction reported (and the way you calculate your gain is currently murky at best) and archived for 7 years. Since there is no guarantee that your exchange survives, you better do it yourself or else. https://www.irs.gov/newsroom/irs-virtual-currency-guidance [irs.gov]
It looks to me that, at least legally, every purchase has to be recorded as crypto coin conversion to dollar and the user is legally responsible for keeping the records. I'd be very hesitant to operate in such an environment.
"Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.
(Score: 0) by Anonymous Coward on Saturday April 21 2018, @02:18AM
fuck the degenerate scum at the IRS. are you a man or a mouse, ffs?
(Score: 0) by Anonymous Coward on Saturday April 21 2018, @02:33AM (1 child)
Great article. Just great article.
I RTA, drank wine, slept, got up, drank more wine, and realized I was still thinking about TA.
Well done Soylent. When I get out of my mom's basement, I'm gonna send you a big cheque, BIG ONE!
Great article. Just great article.
(Score: 0) by Anonymous Coward on Saturday April 21 2018, @05:10AM
therealdonaldtrump, is that you?