Questions tagged [cryptocurrency]

A cryptocurrency is a digital or virtual currency that uses cryptography to secure transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership.

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181
votes
6answers
42k views

Found a heap of BTC but have no documentation. What do I do?

Many years ago, I bought around 400 BTC for a few hundred dollars (?) and stored them in a hard drive. Shortly after that, I lost this hard drive, wrote it off as an "Oh well" and didn't think ...
100
votes
10answers
32k views

How is Bitcoin useful as a currency if so few services accept it?

I've done research on bitcoin and I know what it is and how it works, kinda. I've even built a small block chain app. What I don't understand, and I haven't been able to find the answer to, is if ...
48
votes
11answers
21k views

20% monthly mining vs 5% monthly trading

I recently meet a guy who invested his money in 2 systems. 1) The first one is mining. He gave 20.000 euros to this company ([redacted]) and they promised to give him back 20% a month. There are ...
41
votes
3answers
8k views

Tax implications of BTC for rent

I'm considering doing a trial run with my tenants and let them pay some or all of their rent in BTC. My motivations: BTC isn't considered a currency so it's taxed as an asset under capital gains tax. ...
36
votes
12answers
17k views

I bought my first shares in life and they dropped 25% in a very short time. What to do?

I bought Coinbase stocks shortly after IPO. Now my loss at 25%, however, I am in the fortunate position of not being dependent on the invested money. I would like to know in retrospect what I and ...
31
votes
9answers
5k views

Why are cryptocurrencies not considered proper investments?

I plan to invest a portion of my savings in cryptocurrencies that I understand on a technical level (e.g. Bitcoin and Ethereum). However, otherwise prudent financial advice articles on the internet ...
21
votes
4answers
10k views

Is this a Bitcoin scam?

Someone wants to e-mail me a check, take the check to my credit union's ATM, deposit it, withdraw a smaller amount in cash, and use the cash to buy Bitcoin to send to him. Is this a scam?
17
votes
3answers
12k views

Sugar daddy prepaid card scam

I’ve been talking to a sugar daddy for a couple weeks now and he sent me a “prepaid” card which is now activated but he wants me to withdraw a large amount and deposit into his Bitcoin wallet. Is this ...
15
votes
3answers
7k views

If I short cryptocurrencies, why don't I get the money immediately?

The academic definition of shorting is to borrow someone else's asset such as stocks, sell it now and repay it later. So I assume that when I short the stocks, money is credited to my account from a ...
13
votes
8answers
4k views

Is it safe to invest in cryptocurrencies such as bitcoin? [duplicate]

How safe is it to invest in cryptocurrency? I see bitcoin going up almost every time I look at its market value. How can anyone be sure it wouldn't crash in the future?
13
votes
1answer
3k views

How can you minimize taxes on cryptocurrency trading?

I bought one Ethereum last year for around $350 and ended up selling it early this year for around $1350. From what I'm reading, capital gains will be close to 40% on the $1000 I made. Is there a ...
13
votes
1answer
3k views

How is double-spending prevented in traditional banking?

I have been getting familiar with crypto currencies and, in particular, with the double spending problem. This has brought up the question of how double-spending is prevented and controlled in ...
12
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2answers
689 views

At tax time, what is the proper way to report cryptocurrency earnings and fiat income when you've started with “nothing”?

Back in 2011 I started mining Bitcoin. I earned no more than .75 BTC. At that time, it was worth no more than $0.75. I began to trade my bitcoins for alt-coins. Regarding taxes and cryptocurrencies ...
11
votes
2answers
6k views

Can dual citizens open crypto exchange accounts where U.S. citizens are prohibited?

I am specifically asking about the many crypto-currency exchanges which prohibit U.S. traders and would prefer if someone with first hand experience answered. Every exchange which offers derivatives ...
11
votes
4answers
1k views

How do you best explain cryptocurrency to an 8 year old

Background I have a family friend with two kids. When the kids were 1 I bought them shares of stock that were transferred into a UTMA for them, figuring they had enough toys and wouldn't remember ...
11
votes
2answers
1k views

How To Report Cryptocurrency Earnings?

I invested in a decentralized bitcoin business and earned about BTC 0.4 this year in interest from it, but there is no official business - it's purely autonomous (very hard to explain). I also "mined"...
10
votes
4answers
2k views

Is there any way to reduce the taxes on my capital gains?

I made ~100k investing in Bitcoin. Afterwards, I learned that I needed to pay capital gains taxes on it in the amount of ~23k (according to Bitcoin and Crypto Taxes). What are my options in terms of ...
10
votes
3answers
2k views

When Can Cryptocurrency Cease to Exist? [closed]

For stocks, it can cease to exist due to the firm's bankruptcy or merger. If possible, when and why can a cryptocurrency cease to exist? For example, is it possible for Bitcoin to suddenly become ...
10
votes
2answers
812 views

Where to categorize crypto-currencies

In Germany, crypto-currencies like Bitcoin are all over the news lately, making me aware of the fact I don't know much about them. A journalistic TV program I was watching yesterday even claimed ...
9
votes
4answers
6k views

When the market cap goes down, does that mean people are taking money out? [duplicate]

My question is about the market cap figure on coinmarketcap.com and dealing with crypto currencies. So yesterday the market cap was at 720 billion dollars. Today it's below 600b$. Does this mean ...
9
votes
1answer
2k views

Robinhood, daily buying and selling, and cryptocurrencies… What tax concepts to expect?

Robinhood has plenty of docs explaining the tax concepts with trading, and this is not particularly mysterious. But what I am wondering is what sort of documents to expect them to provide come tax ...
9
votes
1answer
499 views

Assuming 1031 Doesn't Apply To Cryptocurrency Trading

See this relevant link for a brief synopsis of what 1031 is in relation to cryptocurrencies. For the sake of this question, let's assume that 1031 does not apply at all, meaning that every trade from ...
8
votes
1answer
4k views

What is the likelihood I get in trouble for forgetting to file cryptocurrency taxes? What should I do?

PayPal had a promotion without fees a long time ago, they also did it December 2020 and I just sold crypto again through paypal. This time they mentioned some sort of tax form, which somehow I was ...
7
votes
4answers
37k views

Can I place a stop loss and a limit sell at the same time?

Let's say I bought 100 shares of company XYZ at 10$ a share. I think that the market price will rise to 12$, so I would like to sell ALL MY SHARES at 12$ (that's the limit sell order). On the other ...
6
votes
5answers
3k views

Can a contractor convert a cryptocurrency payment into money?

Suppose that an overseas customer tells a contractor that she or he cannot pay for the job via common overseas payment options — such as an online payment, money order, payment card, bank transfer — ...
6
votes
3answers
1k views

Is Bitcoin investing wise? [closed]

Is Bitcoin or any other crytocurrency a wise investment? I have invested a little Bitcoin and Bitcoin Cash. They go up then down and back up. Is another crypto currency better or is this too risky for ...
5
votes
2answers
1k views

Are there multiple Bitcoin markets?

I have the (possibly wrong) suspect that Bitcoin questions are not received too well here, so I kindly ask you to go easy on me :-) According to this question we should categorize Bitcoin as a ...
5
votes
2answers
2k views

Why do Ethereum and Bitcoin have very similar charts?

I have noticed today that Bitcoin (BTC) and Ethereum (ETH) charts look almost the same. Why are they so correlated?
5
votes
1answer
182 views

Do I need a Social Security Number?

I am a New Zealand citizen, and legal resident of Mexico (not the US - I have only B1/B2 visa for the US). I have funds in the US in an American bank account (in my name). Recently I have considered ...
4
votes
4answers
2k views

Is the blockchain similar to double-entry book-keeping?

As far as I know, blockchains keeps transaction records from the beginning of time. This lets the blockchain retain a history of traceable transactions so it can maintain validity. Double-entry book-...
4
votes
2answers
1k views

Why would anyone borrow using a DEFI (Decentralised Finance) platform?

Introduction DEFI lending platforms like Aave are decentralised finance protocols which enable anyone to either lend their crypto-assets (usually ethereum) for high % interest, or lock up their ...
4
votes
1answer
141 views

Why isn't contango in crypto futures markets simply arbitraged away?

Currently (21-Feb-2021), bitcoin futures markets are in contango, with contracts maturing at the end of June trading at about a 9.1% premium to the spot price. My assumption is that one could purchase ...
4
votes
1answer
3k views

Nonresident alien F-1 student in the US received 1099-K for robo-trading cryptocurrencies, which form to fill and send to IRS

I am an F-1 student in the US and I've been running a high frequency trading bot on GDAX. Coinbase notified me that they've filed a 1099-K form to the IRS on my behalf which contains astronomical ...
4
votes
1answer
775 views

Confusion/Misunderstanding over the maker/taker fee mechanism

Sorry if this question is noobish. I thought I had the maker/taker fee mechanism figured out (already existing question at Maker taker fees - can somebody explain in plain english?); apparently I was ...
4
votes
1answer
320 views

Ethereum donation appraisal?

I donated some Ethereum to a Fidelity donor-advised fund this year. The amount was worth over $5k, which I believe means it falls under the IRS's appraisal requirement. How can I find a "qualified" ...
4
votes
1answer
619 views

What cost basis accounting methods are applicable to virtual currencies?

This year I began doing some small investments in cryptocurrencies (Bitcoin, etc), and turning small profits. I've been tracking my gains under each of the different cost basis accounting methods (...
3
votes
5answers
765 views

Isn't an Initial Coin Offering (ICO) a surefire way to make tons of money?

I know this sounds stupid, but all the crypto currencies do really, really well after an initial Coin Offering (ICO), with some coins going up 10000% in 6 months. I find it puzzling: shouldn't ...
3
votes
4answers
211 views

Does my tax return need to report cryptocoins that I have received as donations?

I have received a relatively small amount of the IOTA cryptocurrency as a donation. A reason for this donation is that sending such transactions helps in testing the IOTA network and transaction ...
3
votes
2answers
359 views

How can new cryptocurrencies form when the 51% attack exists?

Recently, I learned about the concept of the 51% attack which a malicious actor could perform on a cryptocurrency. Essentially, if you can control >50% of the hashing power for a given cryptocurrency, ...
3
votes
1answer
2k views

Sugar daddy bitcoin scam? [duplicate]

I met a sugar daddy online who claims he cannot use cashapp or paypal to compensate me and can only use bitcoins. I made a coinbase account and now he is asking for my coinbase login so he can "load ...
3
votes
1answer
288 views

Why take crypto profits when you can just set a stop order?

In such a volatile market as cryptocurrency, I have heard many people stress the importance of taking profits. For example, when a coin doubles in value, they sell 50% of their holding. This ensures ...
3
votes
3answers
518 views

Several questions on Bitcoin futures

I have been reading news on crypto-currencies. As a developer, I understand well how Bitcoin works. I also have a basic understanding of finance in general and stocks in particular. I understand how ...
3
votes
1answer
5k views

Where can I find Bitcoin Misery Index?

There has been a lot written about Bitcoin Misery Index: The index is called the Bitcoin Misery Index (BMI) and was designed as a trading tool for investors to take advantage of volatility in BTC ...
3
votes
1answer
251 views

What paperwork is needed when receiving salary through the cryptocurrencies?

Supposedly I got a short-term software engineering remote contract which was agreed to be paid by the cryptocurrencies or tokens on the task-basis (e.g. receiving a certain amount of EOS tokens for ...
3
votes
1answer
672 views

Buying cryptocurrency for a friend at exchange

Registering and buying currency (bitcoin) at an exchange is not a smooth experience for most. If I am registered at an exchange, can I buy for people (friends and family)? I think it might involve ...
3
votes
2answers
415 views

Why doesn't the GBTC premium get arbitraged away?

My understanding of how GBTC works is that all of the following are true: Accredited investors may provide BTC to Grayscale and receive shares of GBTC in exchange. After a six month lockup, the ...
3
votes
1answer
224 views

How are the earnings of a Crypto Interest Account taxed?

I have some bitcoin in an interest saving account. I am not sure if I have to consider the interest earned as Tax on Savings Interests (which does not mention anything related to crypto) or ...
3
votes
1answer
222 views

How to do Taxes on Cryptocurrency Profits/Losses

I got into Cryptocurrency and was wondering how the taxes would be addressed on profits and losses of trading cross currency. I have not converted my cryptocurrencies to any government backed fiat. I ...
3
votes
1answer
4k views

Is buying and selling Bitcoin (and other cryptocurrency) legal for a student on F-1 Visa doing OPT in USA?

I know that trading stocks is allowed for F-1 students in the US as long as income/losses are reported when taxes are done. (Is Stock Trading legal for a student on F-1 Visa in USA?) How about buying ...
3
votes
1answer
511 views

How should stablecoins be treated in UK tax reports?

Stablecoins are digital tokens that stay pegged to the value of fiat currencies like USD or GBP. Two examples of stablecoins are DAI and USDC, which are both redeemable for $1 on various exchanges. ...