Bit Coin Troubles

[Sparko]

There is some opposition to SEC intrusion into cryptocurrency. Here is a group defending itself against an apparent jurisdiction-lacking SEC. I just provide the initial content from the link

Source: https://cei.org/blog/lbry-cryptocurrency-prosecution-shows-secs-misplaced-priorities/

The Securities and Exchange Commission (SEC), without authorization from Congress or from formal rulemaking, continues its punitive push against blockchain-based companies that sell native tokens with its recent complaint against LBRY and its native LBC cryptocurrency.

Even before Bitcoin’s 2017 price surge, widespread interest in alternative or “alt coins”—cryptocurrencies that were alternatives to Bitcoin—was taking hold. Many “alt coin” founders presold tokens to fund eventual network-type businesses. This phenomenon became known as initial coin offerings (ICOs). The practice exploded in 2017-2018.

The SEC remained mostly silent during the ICO boom but then flooded alt-coin founders with a tsunami of subpoenas beginning in 2018. To be sure, some ICOs were scams and deserved prosecution, but others were and are legitimate companies building out viable networks and providing value to purchasers and consumers.

LBRY, Inc. is one such company. It promotes an “open, free, and fair network for digital content” and boasts 10 million users. Someday it could rival YouTube, Amazon, and other video content providers. But first it risks bankruptcy in a legal fight with the government for violations that lack victims.

© Copyright Original Source

Yeah its a love/hate relationship. The crypto currency is vulnerable to scammers and manipulators and fraud. But nobody wants governments sticking their nose into it. But they do need regulation and some way to punish those who abuse the markets. Maybe they will create some sort of international regulatory body for cryptos by the crypto people. Something needs to happen though. The biggest push back probably comes from the black market/dark web who want the crypto to be completely free from control so they can use them freely to fund criminal activity.

[rogue06]

The crypto markets are tanking. It all started with Elon Musk mucking around in twitter. This is the biggest problems with crypto. there isn't anything real to "back them" like a stock. They are very volatile and subject to emotional whims. Musk makes a few tweets and the markets go way up. A few more tweets and the markets crash.

Bitcoin was up to $50K after he tweeted about buying $1.5M and accepting it as funds to by Tesla cars. Then he reversed and said he wouldn't and now it has dropped to $30,000 (going slightly up since). Crazy.

The other crypto's seem to be following suit for some reason. I think it's a panic sell off because of emotion. Probably a good time to buy rather than sell.

I wonder if the SEC or some other such organization (maybe they will create one?) will eventually start to regulate crypto and stop people like Musk from manipulating the markets.

Yup. According to the WSJ, Bitcoin Falls as Much as 30% as Investors Sour on Cryptocurrencies


I'm kind of surprised that it lasted as long as it did given as you said there is nothing actually backing it.



Also: Coinbase IPO Turns Out to Have Been Bad Day to Splurge on Crypto

[mikewhitney]

The crypto markets are tanking. It all started with Elon Musk mucking around in twitter. This is the biggest problems with crypto. there isn't anything real to "back them" like a stock. They are very volatile and subject to emotional whims. Musk makes a few tweets and the markets go way up. A few more tweets and the markets crash.

Bitcoin was up to $50K after he tweeted about buying $1.5M and accepting it as funds to by Tesla cars. Then he reversed and said he wouldn't and now it has dropped to $30,000 (going slightly up since). Crazy.

The other crypto's seem to be following suit for some reason. I think it's a panic sell off because of emotion. Probably a good time to buy rather than sell.

I wonder if the SEC or some other such organization (maybe they will create one?) will eventually start to regulate crypto and stop people like Musk from manipulating the markets.

There is some opposition to SEC intrusion into cryptocurrency. Here is a group defending itself against an apparent jurisdiction-lacking SEC. I just provide the initial content from the link

Source: https://cei.org/blog/lbry-cryptocurrency-prosecution-shows-secs-misplaced-priorities/

The Securities and Exchange Commission (SEC), without authorization from Congress or from formal rulemaking, continues its punitive push against blockchain-based companies that sell native tokens with its recent complaint against LBRY and its native LBC cryptocurrency.

Even before Bitcoin’s 2017 price surge, widespread interest in alternative or “alt coins”—cryptocurrencies that were alternatives to Bitcoin—was taking hold. Many “alt coin” founders presold tokens to fund eventual network-type businesses. This phenomenon became known as initial coin offerings (ICOs). The practice exploded in 2017-2018.

The SEC remained mostly silent during the ICO boom but then flooded alt-coin founders with a tsunami of subpoenas beginning in 2018. To be sure, some ICOs were scams and deserved prosecution, but others were and are legitimate companies building out viable networks and providing value to purchasers and consumers.

LBRY, Inc. is one such company. It promotes an “open, free, and fair network for digital content” and boasts 10 million users. Someday it could rival YouTube, Amazon, and other video content providers. But first it risks bankruptcy in a legal fight with the government for violations that lack victims.

© Copyright Original Source

[Sparko]

The crypto markets are tanking. It all started with Elon Musk mucking around in twitter. This is the biggest problems with crypto. there isn't anything real to "back them" like a stock. They are very volatile and subject to emotional whims. Musk makes a few tweets and the markets go way up. A few more tweets and the markets crash.

Bitcoin was up to $50K after he tweeted about buying $1.5M and accepting it as funds to by Tesla cars. Then he reversed and said he wouldn't and now it has dropped to $30,000 (going slightly up since). Crazy.

The other crypto's seem to be following suit for some reason. I think it's a panic sell off because of emotion. Probably a good time to buy rather than sell.

I wonder if the SEC or some other such organization (maybe they will create one?) will eventually start to regulate crypto and stop people like Musk from manipulating the markets.

[Sparko]

Something about that seems more than a little off.

I am not explaining it that well. basically there are two ways to "mine" new coins "proof of work" and "proof of stake" - Bitcoin uses POW. Basically to create new bitcoin, miners have to solve mathematical equations. The first to do it, earns the bitcoin. This is very computationally expensive (the whole power thing) - Etherium is curently POW but is transitioning to POS. with Proof of Stake new coins are earned by having the largest "stake" of coins and processing transactions instead of solving math problems. So basically you are lending your coins trying to be the largest pool to get more chances to earn more. The proceeds are shared among members of the pool. The actual principal is never at risk because it just basically makes your chances of getting transactions to process better. The only way you could conceivably lose the coin would be for someone to do something deliberately bad, like create fraudulent transaction processes, and get caught. If that happens there are penalties. Apparently coinbase (who owns the pool that they "rent" out) is guaranteeing that if that were to happen, they would protect your investment.

Screenshot-2021-01-19-at-10.58.33-960x644.jpg

[rogue06]

I am learning about another way to earn using crypto. It's called "staking" - basically you are "lending" a portion of a crypto to a pool that they then use to mine more crypto or some other purpose. Coinbase will protect your principal so you won't lose anything, and then you earn a portion of the newly mined crypto as a reward. But you can't use the staked amount or trade it for whatever time period the staking is for.

One such project is Etherium 2.0 - it is an upgrade to Etherium. eventually all Etherium will be converted to ETH2. Right now they are mining ETH2 and testing various things. You can stake some of your regular Etherium into ETH2 to help them. The amount you stake is put into a separate ETH2 wallet and you cannot trade it or sell it until the conversion is complete (estimating a couple of more years but could be more) - in the meantime, you earn new ETH2 at around 6% year. There is a waiting list I signed up for. I think I will stake some of my Etherium 1 into it, since I planned on holding it for a long time anyway. And it will eventually become Eth2 anyway.

https://help.coinbase.com/en/coinbas...ng-on-coinbase

Something about that seems more than a little off.

[Sparko]

I am learning about another way to earn using crypto. It's called "staking" - basically you are "lending" a portion of a crypto to a pool that they then use to mine more crypto or some other purpose. Coinbase will protect your principal so you won't lose anything, and then you earn a portion of the newly mined crypto as a reward. But you can't use the staked amount or trade it for whatever time period the staking is for.

One such project is Etherium 2.0 - it is an upgrade to Etherium. eventually all Etherium will be converted to ETH2. Right now they are mining ETH2 and testing various things. You can stake some of your regular Etherium into ETH2 to help them. The amount you stake is put into a separate ETH2 wallet and you cannot trade it or sell it until the conversion is complete (estimating a couple of more years but could be more) - in the meantime, you earn new ETH2 at around 6% year. There is a waiting list I signed up for. I think I will stake some of my Etherium 1 into it, since I planned on holding it for a long time anyway. And it will eventually become Eth2 anyway.

https://help.coinbase.com/en/coinbas...ng-on-coinbase

[rogue06]

Just like stocks, you only need to pay taxes on any realized gains (difference in what you paid vs what you sold it for) - and report any income paid to you in crypto.

As my father used to say regarding things like stocks (usually after my mother started freaking out when the market was down), you haven't made or lost anything until you sell. What happens in the meantime is irrelevant.

[Sparko]

Speaking of which...

The IRS Is Coming for Crypto Investors Who Haven’t Paid Their Taxes

Just like stocks, you only need to pay taxes on any realized gains (difference in what you paid vs what you sold it for) - and report any income paid to you in crypto.

[rogue06]

sure. I also have qualms about how regular money and untraceable things like diamonds are used by criminals.

I am using it in a perfectly legal way, using a legal broker (Coinbase) who even tracks your investments just like E*trade does, and will issue you tax documents at the end of the year.

Speaking of which...

The IRS Is Coming for Crypto Investors Who Haven’t Paid Their Taxes

[rogue06]

And if he had been carrying $9,500, they'd give him a hard time, make him uncomfortable, and let him go.

Sorta kinda like what I experienced when I returned from Jamaica shortly before the last fin de siècle while carrying 20 Cuban cigars. Although they let me keep one.

[Cow Poke]

That just covers bank transactions. This is done under federal (and some state) laws regarding forfeiture, where they can seize property, including cash, without compensation to the owner, if the money is made from, or used to commit a crime. Unfortunately, turning the concept of being innocent until proven guilty completely on its head, they assume any large amount of cash ($10K and over) is intended for illegal purposes and it is up to the person from who it was taken to "prove" that it wasn't.

True

[rogue06]

It’s called the Bank Secrecy Act (aka. The $10,000 Rule), and while that might seem like a big secret to you right now, it’s important to know about this law if you’re looking to make a large bank deposit over five figures.

The Bank Secrecy Act is officially called the Currency and Foreign Transactions Reporting Act, started in 1970.

It states that banks must report any deposits (and withdrawals, for that matter) that they receive over $10,000 to the Internal Revenue Service. For this, they’ll fill out IRS Form 8300. This begins the process of Currency Transaction Reporting (CTR).

Essentially, any transaction you make exceeding $10,000 requires your bank or credit union to report it to the government within 15 days of receiving it -- not because they’re necessarily wary of you, but because large amounts of money changing hands could indicate possible illegal activity.

This includes theft, money laundering, or helping to fund criminal organizations or even terrorists.

So, what happens is that people who don't want their money tracked will simply make multiple depsits/transactions of LESS than $10,000, which could total to far more than the $10,000.

That just covers bank transactions. This is done under federal (and some state) laws regarding forfeiture, where they can seize property, including cash, without compensation to the owner, if the money is made from, or used to commit a crime. Unfortunately, turning the concept of being innocent until proven guilty completely on its head, they assume any large amount of cash ($10K and over) is intended for illegal purposes and it is up to the person from who it was taken to "prove" that it wasn't.

[Cow Poke]

Feds

I had a friend who's father owned a nursery in Tennessee who flew down to Florida to buy plants and roses (IIRC, Mother's Day was coming soon). He was carrying over $10,000 in a money belt because the growers always gave him a better deal when he paid cash. He was stopped and searched at the airport (not sure why) and the money was confiscated.

It darn near ruined his business. He pretty much had to write it off in that lawyers told him it would basically cost about 10 grand to fight it in court with no guarantee of victory.

And if he had been carrying $9,500, they'd give him a hard time, make him uncomfortable, and let him go.

[rogue06]

I never heard of that before. Is that a local law?

Feds

I had a friend who's father owned a nursery in Tennessee who flew down to Florida to buy plants and roses (IIRC, Mother's Day was coming soon). He was carrying over $10,000 in a money belt because the growers always gave him a better deal when he paid cash. He was stopped and searched at the airport (not sure why) and the money was confiscated.

It darn near ruined his business. He pretty much had to write it off in that lawyers told him it would basically cost about 10 grand to fight it in court with no guarantee of victory.