Post: #1

IRS: Bitcoin is not currency

No surprise here - government is protecting the most important (and perverse) monopoly there is.

Wrap your head around the concept of paying capital gains tax on Bitcoin appreciation that comes about as a result of dollar printing. If you didn't get that, stop and really think about what the foregoing means.

Post: #2

The news was fast with this one, I just got the IRS news release. As assman said, its treated as property, like you are trading baseball cards with someone, not currency. http://www.irs.gov/pub/irs-drop/n-14-21.pdf

Post: #3

(03-25-2014 02:58 PM)assman Wrote:  IRS: Bitcoin is not currency

No surprise here - government is protecting the most important (and perverse) monopoly there is.

Wrap your head around the concept of paying capital gains tax on Bitcoin appreciation that comes about as a result of dollar printing. If you didn't get that, stop and really think about what the foregoing means.

No surprise indeed, and something that I predicted would happen.

I admit I'm not the most Bitcoin-savvy individual. I see Bitcoin from an outsider's perspective. And from an outsider, I would actually agree with the government that Bitcoin in its present form appears to be more of a commodity than a currency.

Even though Bitcoin is a peer-regulated currency as opposed to a government regulated currency, it appears to me that the value of Bitcoin is measured in relation to the U.S. dollar. The dollar is still the reference point to the value of Bitcoin.

To an outsider, Bitcoin appears to be a commodity and potential investment vehicle. To my knowledge, there's not a single employer that pays their employees in Bitcoin. Employers and employees can't pay their taxes in Bitcoin. We pay into a system with government issued currency, and I don't see that changing anytime soon. Bitcoin, at present, appears to be a vehicle used primarily for online trade.

In the future, there is a possibility that peer-regulated "startup" currency could overthrow fiat currency, and it's pretty mind-boggling and exciting to think about the implications, but in the interim there's not a government on Earth that's going to recognize Bitcoin as a legitimate currency. They'll treat it like any other commodity like gold or crude oil.

Post: #4

IRS: Bitcoin is not currency
Everyone Else: No shit.

Post: #5

You know, if I had spent some money buying bitcoins instead of hating on them when I first heard about them, I could have become a millionaire. Lesson learned: Being cynical and hateful isn't going to make me successful.

Post: #6

(03-25-2014 04:04 PM)placer Wrote:  You know, if I had spent some money buying bitcoins instead of hating on them when I first heard about them, I could have become a millionaire. Lesson learned: Being cynical and hateful isn't going to make me successful.

Hindsight is 20/20.

For every person that gets lucky by making the right purchase at the right time, there are 100 fools that parted with their money.

Don't beat yourself up too much.

Post: #7

(03-25-2014 03:57 PM)Sugar Wrote:  IRS: Bitcoin is not currency
Everyone Else: No shit.

The IRS has to deal with mouth breathers on a daily basis. If something seems like a "no shit sherlock" statement they'd better be saying it because there a lot of people who's closest contact with the IRS is a 1040EZ will still buy bitcoins.

Post: #8

^ Never said it was a bad investment. I said it isn't a currency - BTC's behavior has mirrored more that of a tech stock. If treated as such, you can make a lot of money. But trade in your last fiat dollar for BTC at your own foolish risk

Post: #9

I actually think I prefer them treating it as a commodity and not a currency. I think one of the major sticking points is the gov defines currency of that of a country. Since bitcoin isn't a currency of a country they don't consider it a currency. I know more comes into play than just that but seeing as how that is how the gov defines a currency I think that's a big issue. It's interesting that I think a few countries have considered it a currency.

Post: #10

(03-25-2014 04:04 PM)placer Wrote:  You know, if I had spent some money buying bitcoins instead of hating on them when I first heard about them, I could have become a millionaire. Lesson learned: Being cynical and hateful isn't going to make me successful.

Yes. Be optimistic and try new things with reckless abandonment. I thought I lost my ass @ 85 dollars but thought about it for 5 seconds (my max) and bought more. I'm getting bored with it now though.

Post: #11

Also, I'm cashing out and buying old japanese motorcycles with my winnings. I might keep 10 BTC but would rather play with junk coins like Doge or whatever.

Post: #12

Newsflash IRS. Neither are fiat Federal Reserve notes which are backed by nothing. Gold and Silver (or representations of) are supposed to be accepted for taxes.

If Bit-coins do take off the Govt will try to seize them like they did gold money back in the days.

Currency can be anything. It's whatever the people seem worthy and of value to use as a
mechanism for trade.

Post: #13

(03-25-2014 04:04 PM)placer Wrote:  You know, if I had spent some money buying bitcoins instead of hating on them when I first heard about them, I could have become a millionaire. Lesson learned: Being cynical and hateful isn't going to make me successful.

I knew about BTC before it's launch and kept saying "Hah, that shit won't last more than 5 years. No way in hell I'm buying any, it's the worst investment ever from day 1."

I regret saying that...

Post: #14

(03-25-2014 07:50 PM)Cattle Rustler Wrote:  

(03-25-2014 04:04 PM)placer Wrote:  You know, if I had spent some money buying bitcoins instead of hating on them when I first heard about them, I could have become a millionaire. Lesson learned: Being cynical and hateful isn't going to make me successful.

I knew about BTC before it's launch and kept saying "Hah, that shit won't last more than 5 years. No way in hell I'm buying any, it's the worst investment ever from day 1."

I regret saying that...

Don't feel so bad. I could have also bought in early, but I do not regret it.

If I was the type of person who bought into every hype, I would soon enough have lost any money that I did make from BC. I would rather be prudent, build wealth steadily, and then keep it through that very same prudence.

Many of the people that did well in BC are the same type of people who win the lottery and then end up broke a few years later.

Post: #15

I could have got into BitCoins early as well.

Here is the thing. And I have mentioned it before in a previous thread.

You need to build up about 10-20k of monopoly money that you can stick in a bank. And forget about.

It has to be money that is already 'dead' to you.

Then when shit like this (or facebook shares - twitter shares - google shares - bitcoins - shorting oil etc) comes along. You can take a punt on it without being too emotionally involved with the money.

Live with your parents for a year and save up the money if you have to.

I think this is the easiest way for regular guys to be able to invest in risky ventures without feeling too much pain if it goes south. But you have to be emotionally detached from the money otherwise you will never be brave enough to really risk it.

I said to my brother - back when BitCoins were cheap - that this is exactly the sort of play I would use my 'monopoly money' bank account to play with. If I had one set up.

I am okay financially - so I am not that bothered.

Still - with the way the internet and stock market has gone over the past decade. It wouldn't be long before the next fad investment (AirBnB?) comes along.

I am convinced that this is an important lesson to learn. And is one of the few pieces of advice I would give to a teenager who wanted some creative ideas on how to approach things differently.

Post: #16

Well, the first person someone says when asked about bit-coins is "It is a virtual currency"

Virtual

May as well call it an Imaginary Currency.

Post: #17

(03-26-2014 05:25 AM)spalex Wrote:  Well, the first person someone says when asked about bit-coins is "It is a virtual currency"

Virtual

May as well call it an Imaginary Currency.

Just like USD.

Didn't you know that 97% of USD only exists virtually?