Modeling Value Based on Scarcity. A brief history of ...

Crypto-Currency: A Guide to Common Tax Situations

STATUS: Majority of questions have been answered. If yours got missed, please feel free to post it again.
Introduction
All,
Based on the rapid increase in popularity and price of bitcoin and other crypto currencies (particularly over the past year), I expect that lots of people have questions about how crypto currency will impact their taxes. This thread attempts to address several common issues. I'm posting similar versions of it here, in several major crypto subs, and eventually in the weekly "tax help" threads personalfinance runs.
I'd like to thank the /personalfinance mod team and the /tax community for their help with this thread and especially for reading earlier versions and offering several valuable suggestions/corrections.
This thread is NOT an endorsement of crypto currency as an investing strategy. There is a time and a place to debate the appropriateness of crypto as part of a diversified portfolio - but that time is not now and that place is not here. If you are interested in the general consensus of this sub on investing, I would urge you to consult the wiki while keeping in mind the general flowchart outlining basic steps to get your finances in order.
Finally, please note that this thread attempts to provide information about your tax obligations as defined by United States law (and interpreted by the IRS under the direction of the Treasury Department). I understand that a certain portion of the crypto community tends to view crypto as "tax free" due to the (actual and perceived) difficulty for the IRS to "know" about the transactions involved. I will not discuss unlawfully concealing crypto gains here nor will I suggest illegal tax avoidance activities.
The Basics
This section is best for people that don't understand much about taxes. It covers some very basic tax principles. It also assumes that all you did during the year was buy/sell a single crypto currency.
Fundamentally, the IRS treats crypto not as money, but as an asset (investment). While there are a few specific "twists" when it comes to crypto, when in doubt replace the word "crypto" with the word "stock" and you will get a pretty good idea how you should report and pay tax on crypto.
The first thing you should know is that the majority of this discussion applies to the taxes you are currently working on (2017 taxes). The tax bill that just passed applies to 2018 taxes (with a few very tiny exceptions), which most people will file in early 2019.
In general, you don't have to report or pay taxes on crypto currency holdings until you "cash out" all or part of your holdings. For now, I'm going to assume that you cash out by selling them for USD; however, other forms of cashing out will be covered later.
When you sell crypto, you report the difference between your basis (purchase price) and proceeds (sale price) on Schedule D. Your purchase price is commonly referred to as your basis; while the two terms don't mean exactly the same thing, they are pretty close to one another (in particular, there are three two ways to calculate your basis - your average cost, a first-in, first-out method, and a "specific identification" method. See more about these here and here). EDIT - you may not use average cost method with crypto - see here. If you sell at a gain, this gain increases your tax liability; if you sell at a loss, this loss decreases your tax liability (in most cases). If you sell multiple times during the year, you report each transaction separately (bad news if you trade often) but get to lump all your gains/losses together when determining how the trades impact your income.
One important thing to remember is that there are two different types of gains/losses from investments - short term gains (if you held an asset for one year or less) and long term gains (over one year; i.e. one year and one day). Short term gains are taxed at your marginal income rate (basically, just like if you had earned that money at a job) while long term gains are taxed at lower rates.
For most people, long term capital gains are taxed at 15%. However, if you are in the 10% or 15% tax bracket, congrats - your gains (up to the maximum amount of "unused space" in your bracket) are tax free! If you are in the 25%, 28%, 33%, or 35% bracket, long term gains are taxed at 15%. If you are in the 39.6% bracket, long term gains are taxed at 20%. Additionally, there is an "extra" 3.8% tax that applies to gains for those above $200,000/$250,000 (single/married). The exact computation of this tax is a little complicated, but if you are close to the $200,000 level, just know that it exists.
Finally, you should know that I'm assuming that you should treat your crypto gains/losses as investment gains/losses. I'm sure some people will try and argue that they are really "day traders" of crypto and trade as a full time job. While this is possible, the vast majority of people don't qualify for this status and you should really think several times before deciding you want to try that approach on the IRS.
"Cashing Out" - Trading Crypto for Goods/Services
I realize that not everyone that "cashes out" of crypto does so by selling it for USD. In fact, I understand that some in the crypto community view the necessity of cashing out itself as a type of myth. In this section, I discuss what happens if you trade your crypto for basically anything that isn't cash (minor sidenote - see next section for a special discussion on trading crypto for crypto; i.e. buying altcoins with crypto).
The IRS views trading crypto for something of value as a type of bartering that must be included in income. From the IRS's perspective, it doesn't matter if you sold crypto for cash and bought a car with that cash or if you just traded crypto directly for the car - in both cases, the IRS views you as having sold your crypto. This approach isn't unique to crypto - it works the same way if you trade stock for something.
This means that if you do trade your crypto for "stuff", you have to report every exchange as a sale of your crypto and calculate the gain/loss on that sale, just as if you had sold the crypto for cash.
Finally, there is one important exception to this rule. If you give your crypto away to charity (one recognized by the IRS; like a 501(c)(3) organization), the IRS doesn't make you report/pay any capital gains on the transaction. Additionally, you still get to deduct the value of your donation on the date it was made. Now, from a "selfish" point of view, you will always end up with more money if you sell the crypto, pay the tax, and keep the rest. But, if you are going to make a donation anyway, especially a large one, giving crypto where you have a big unrealized/untaxed gain is a very efficient way of doing so.
"Alt Coins" - Buying Crypto with Crypto
The previous section discusses what happens when you trade crypto for stuff. However, one thing that surprises many people is that trading crypto for crypto is also a taxable event, just like trading crypto for a car. Whether you agree with this position or not, it makes a lot of sense once you realize that the IRS doesn't view crypto as money, but instead as an asset. So to the IRS, trading bitcoin for ripple isn't like trading dollars for euros, but it is instead like trading shares of Apple stock for shares of Tesla stock.
Practically, what this means is that if you trade one crypto for another crypto (say BTC for XRP just to illustrate the point), the IRS views you as doing the following:
  • Selling for cash the amount of BTC you actually traded for XRP.
  • Owing capital gains/losses on the BTC based on its selling price (the fair market value at the moment of the exchange) and your purchase price (basis).
  • Buying a new investment (XRP) with a cost basis equal to the amount the BTC was worth when you exchanged them.
This means that if you "time" your trade wrong and the value of XRP goes down after you make the exchange, you still owe tax on your BTC gain even though you subsequently lost money. The one good piece of news in this is that when/if you sell your XRP (or change it back to BTC), you will get a capital loss for the value that XRP dropped.
There is one final point worth discussing in this section - the so called "like kind exchange" rules (aka section 1031 exchange). At a high level, these rules say that you can "swap" property with someone else without having to pay taxes on the exchange as long as you get property in return that is "like kind". Typically, these rules are used in real estate transactions. However, they can also apply to other types of transactions as well.
While the idea is simple (and makes it sound like crypto for crypto should qualify), the exact rules/details of this exception are very fact specific. Most experts (including myself, but certainly not calling myself an expert) believe that a crypto for crypto swap is not a like kind exchange. The recently passed tax bill also explicitly clarifies this issue - starting in 2018, only real estate qualifies for like kind exchange treatment. So, basically, the vast majority of evidence suggests that you can't use this "loophole" for 2017; however, there is a small minority view/some small amount of belief that this treatment would work for 2017 taxes and it is worth noting that I'm unaware of any court cases directly testing this approach.
Dealing with "Forks"
Perhaps another unpleasant surprise for crypto holders is that "forks" to create a new crypto also very likely generate a taxable event. The IRS has long (since at least the 1960s) held that "found" money is a taxable event. This approach has been litigated in court and courts have consistently upheld this position; it even has its own cool nerdy tax name - the "treasure trove" doctrine.
Practically, what this means is that if you owned BTC and it "forked" to create BCH, then the fair market value of the BCH you received is considered a "treasure trove" that must be reported as income (ordinary income - no capital gain rates). This is true whether or not you sold your BCH; if you got BCH from a fork, that is a taxable event (note - I'll continue using BTC forking to BCH in this section as an example, but the logic applies to all forks).
While everything I've discussed up to this point is pretty clearly established tax law, forks are really where things get messy with taxes. Thus, the remainder of this section contains more speculation than elsewhere in this post - the truth is that while the idea is simple (fork = free money = taxable), the details are messy and other kinds of tax treatment might apply to forks.
One basic practical problem with forks is that the new currency doesn't necessarily start trading immediately. Thus, you may have received BCH before there was a clear price or market for it. Basically, you owe tax on the value of BCH when you received it, but it isn't completely clear what that value was. There are several ways you can handle this; I'll list them in order from most accurate to least accurate (but note that this is just my personal view and there is ongoing disagreement on this issue with little/no authoritative guidance).
  • Use a futures market to determine the value of the BCH - if reliable sources published realistic estimates of what BCH will trade for in the future once trading begins, use this estimate as the value of your BCH. Pros/cons - futures markets are, in theory, pretty accurate. However, if they are volatile/subject to manipulation, they may provide an incorrect estimate of the true value of BCH. It would suck to use the first futures value published only to have that value plummet shortly thereafter, leaving you to pay ordinary income tax but only have an unrealized capital loss.
  • Wait until an exchange starts trading BCH; use the actual ("spot" price) as the value. Pros/cons - spot prices certainly reflect what you could have sold BCH for; however, it is possible that the true value of the coin was highelower when you received it as compared to when it started trading on the exchange. Thus this method seems less accurate to me than a futures based approach, but it is still certainly fairly reasonable.
  • Assume that the value is $0. This is my least preferred option, but there is still a case to be made for it. If you receive something that you didn't want, can't access, can't sell, and might fail, does it have any value? I believe the answer is yes (maybe not value it perfectly, but value it somewhat accurately), but if you honestly think the answer is no, then the correct tax answer would be to report $0 in income from the fork. The IRS would be most likely to disagree with this approach, especially since it results in the least amount of income reported for the current year (and the most favorable rates going forward). Accordingly, if you go this route, make extra sure you understand what it entails.
Note, once you've decided what to report as taxable income, this amount also becomes your cost basis in the new crypto (BCH). Thus, when you ultimately sell your BCH (or trade it for something else as described above), you calculate your gain/loss based on what you included in taxable income from the fork.
Finally, there is one more approach to dealing with forks worth mentioning. A fork "feels" a lot like a dividend - because you held BTC, you get BCH. In a stock world, if I get a cash dividend because I own the stock, that money is not treated as a "treasure trove" and subject to ordinary income rates - in most cases, it is a qualified dividend and subject to capital gain rates; in some cases, some types of stock dividends are completely non taxable. This article discusses this idea in slightly more detail and generally concludes that forks should not be treated as a dividend. Still, I would note that I'm unaware of any court cases directly testing this theory.
Ultimately, this post is supposed to be practical, so let me make sure to leave you with two key thoughts about the taxation of forks. First, I believe that the majority of evidence suggests that forks should be treated as a "treasure trove" and reported as ordinary income based on their value at creation and that this is certainly the "safest" option. Second, out of everything discussed in this post, I also believe that the correct taxation of forks is the murkiest and most "up for debate" area. If you are interested in a more detailed discussion of forks, see this thread for a previous version of this post discussing it at even more length and the comments for a discussion of this with the tax community.
Mining Crypto
Successfully mining crypto coins is a taxable event. Depending on the amount of effort you put into mining, it is either considered a hobby or a self-employment (business) activity. The IRS provides the following list of questions to help decide the correct classification:
  • The manner in which the taxpayer carries on the activity.
  • The expertise of the taxpayer or his advisors.
  • The time and effort expended by the taxpayer in carrying on the activity.
  • Expectation that assets used in activity may appreciate in value.
  • The success of the taxpayer in carrying on other similar or dissimilar activities.
  • The taxpayer’s history of income or losses with respect to the activity.
  • The amount of occasional profits, if any, which are earned.
If this still sounds complicated, that's because the distinction is subject to some amount of interpretation. As a rule of thumb, randomly mining crypto on an old computer is probably a hobby; mining full time on a custom rig is probably a business.
In either event, you must include in income the fair market value of any coins you successfully mine. These are ordinary income and your basis in these coins is their fair market value on the date they were mined. If your mining is a hobby, they go on line 21 (other income) and any expenses directly associated with mining go on schedule A (miscellaneous subject to 2% of AGI limitation). If your mining is a business, income and expenses go on schedule C.
Both approaches have pros and cons - hobby income isn't subject to the 15.3% self-employment tax, only normal income tax, but you get fewer deductions against your income and the deductions you get are less valuable. Business income has more deductions available, but you have to pay payroll (self-employment) tax of about 15.3% in addition to normal income tax.
What if I didn't keep good records? Do I really have to report every transaction?
One nice thing about the IRS treating crypto as an asset is that we can look at how the IRS treats people that "day trade" stock and often don't keep great records/have lots of transactions. While you need to be as accurate as possible, it is ok to estimate a little bit if you don't have exact records (especially concerning your cost basis). You need to put in some effort (research historical prices, etc...) and be reasonable, but the IRS would much rather you do a little bit of reasonable estimation as opposed to just not reporting anything. Sure, they might decide to audit you/disagree with some specifics, but you earn yourself a lot of credit if you can show that you honestly did the best you reasonably could and are making efforts to improve going forward.
However, concerning reporting every transaction - yes, sorry, it is clear that you have to do this, even if you made hundreds or thousands of them. Stock traders have had to go through this for many decades, and there is absolutely no reason to believe that the IRS would accept anything less from the crypto community. If you have the records or have any reasonable way of obtaining records/estimating them, you must report every transaction.
What if I don't trust you?
Well, first let me say that I can't believe you made it all the way down here to this section. Thanks for giving me an honest hearing. I would strongly encourage you to go read other well-written, honest guides. I'll link to some I like (both more technical IRS type guides and more crypto community driven guides). While a certain portion of the crypto community seems to view one of the benefits of crypto as avoiding all government regulation (including taxes), I've been pleasantly surprised to find that many crypto forums contain well reasoned, accurate tax guides. While I may not agree with 100% of their conclusions, that likely reflects true uncertainty around tax law that is fundamentally complex rather than an attempt on either end to help individuals unlawfully avoid taxes.
IRS guides
Non-IRS guides
submitted by Mrme487 to personalfinance [link] [comments]

How to succesfully Invest and Basics

This was written for a different group /stocks it got deleted so hopefully this time it works !
Disclaimer
I dont want to sell you or recommend anything ! Just my expierence and little help so enjoy. If you want to ask me anything feel free, I try so answer everything.

This article is meant to be a small guide that helps you to find your way. Its based on my experience and knowledge, I gained throughout the years. Iam by far no professional. Iam just a guy who loves to invest. If you are new and have few grands to invest this article might help you.
My motivation to write this article was because when I turned 20 I got a small loan of 1 milli.... just few grands from my parents plus the savings I made from working. For me it was clear that I want to invest them. I always liked the idea making money and not really working for it! (Spoiler its kinda true and kinda not)
So I sum up few steps which will helped me to orientate and maybe help you to make your first investement
Step one 1. Where I can Invest?! You can basicly invest in everything. They are infinite options but I just cover up few topics.
They are 5 investments I would like to adress.
  1. Stocks.
    1. Real estate
    2. Options
    3. Start-ups
    4. Krypto n+1. art, old cars, drugs?! (Don’t do or sell drugs pls!)
Stocks (my fav.) I love stocks. I love understanding what the company’s plans are and where they are heading.
They are 3 different types of investment strategies.
  1. Short term (daily) That’s usually daily trading. That means you invest and sell on a daily basis. If your not a expert it can frustrating and the chances that you will lose is high. Many people forget that you have to pay taxes and fees so even if you for example invest 1.000 and sell for 1.050 within 20 min. You will have to pay some fees and taxes and with luck, you are where you started. It only makes sense when you invest a lot, otherwise it makes no sense and to be honest I don’t know any person which makes profit with it.
Difficulty: Hard
Stress Lvl: High
Risk: Medium/High
Profit: Usualy bad
Investement: Medium
  1. Mid term (6month – 1 year+) You buy some stocks for a longer period of time and hope it will go up soon.
This investment is much easier and less risky than short term. You see a stock going up and up so you invest 5k and hope you can ride a little on this upwards trend. Its fairly easy but you have to keep an eye on the market. A good example is VW it dropped because it has some Image problems. Thats a chance to invest! It will most likely to recover because its the biggest automarker in the world and it did. It happend 1000 times and normaly big companies dont fail they are exception but without risk you dont get anywhere
Difficulty: Medium
Stress: Medium
Risk: Medium
Profit: Good
Investment: Low
  1. Long term ( 1-2years – 10 years+) Means you want to invest for a long time you are not only interested in making a quick buck but making a slow and steady progress. You are not interested if the stock goes up or down but you are more interested how much divendend they pay. Usualy they go up very slowly but steady. A good example for this type of stock is Royal Dutch (shell) it has ist up and downs but compared to other stocks ist stable. The dividend is 6% which is insanly good no other big company will pay you that every year. You invest 10.000€ and get every year 600€ which means a holiday for free. Also the work is very little, you only have to check the stocks every few weeks/month You wont get rich but its better than having it in the bank.
Difficulty: Easy
Stress: Low
Risk: Low
Profit: Low
Investment: Low-Medium
Before you invest check the company read the news and get a good overview. I have to admit Iam a fanboy at heart. When a stock of one of my fav. company’s has potential and it does make sense to invest it feels like buying tickets for my favorite Rockband. You support and cheer them on and if they grow you grow with them. BUUUUUUT don’t get my wrong never buy stocks just because you like the company or they have a cool name.
All in all Stocks are a great Investment!
Real Estate
If you want to invest in houses it’s a very save and profitable investment but it depends on your area and country you are coming from. In Germany most objects are overpriced right now so it wouldnt make any sense to buy some. In generell the more money you have the better. They will will be much more people who can afford an cheap flat/condo than the other way around. So expensive objects are better! The optimum is always a shitty apartment in a very good area. Also buying objects in bad areas cause lots of trouble with tenant. Crazy families who refuse to pay, messy people etc. this can end in a stressful situation so beware of that.
If you are already rich af than buy propreties
Example
I went once to an auction and most apartments are sold for double the estimated value. It would take ages (20+ years) to get your investment back. So beware of your market situation.
Difficulty: Easy
Stress: Usualy low/medium
Risk: Low
Profit: Medium
Investment: High
Options
Options are basicly betting that a stock with go up or down. You can bet on nearly everything. You can make lot of money very quick and lose everything even quicker. For me option trading is gambling with few extra steps. The difference is you can lose more than you invest. They are cases where people invest 1000€ and lose -120.000€ because suddelny the market changed.
If you have gambling problems and tendency to gamble this is absolutly not for you. You can see here (in the forum) lots of bad examples where people going full YOLO on something and lose a ton of money. They save up a little, invest in something even more risky and lose again.
I know a friend who makes good money from it but he has a clear head and read many books about this topic he uses software to analyse the situation and everything and he admits that sometimes he doesnt understand what happend. Of course options are not the devils tool but I like to be the voice against it. The truth is in the middle.
Iam a person who likes to understand what am I doing. After reading and learning about it, for more than a year I was more confused than before. It is probably because Iam to stupid for it, so I gave it up and moved on. Options are not for me
Difficulty: very hard (at least for me)
Stress: high
Risk: low - very risky
Profit: It can be everything
Investment: low
  1. Start-ups
Start-ups are also a great business opportunity. I was lucky enough to invest once a little bit into a upcoming company from my firend. He showed me his company and the plans for the future. I already helped him with few shows and stuff so I knew how everything worked.
The biggest bullshit I ever saw are the analyse prediction of the future sales. During the last few years I saw few of them and they all predicted that the company will make an absurd amount of money. It looked like high cool project all shiny and with big numbers. To be honest I dont even know who pay these people to make such bullshit predictions, seriously.
(as you can see I love talking from my life so forgive me my dear)
Long story short I still invested because I understood their model. They existed and already made great progress. I made 50% profit in 3 years. I am still very happy and greatful to had such good chance to invest and would do it again.
They biggest question is how do I find such chances ?
Tell people you are intersted to invest maybe a friend of you will start an company and you can invest or help you to find such a opprtunity. I went to many start up meetings and talk about a lot with my friends. They dont want to hear it but I tell them anyway and if there is a chance they will call me.
Few Tipps:
- Look for already existing companys
- Most companys give you a very good inside look before you invest! If not watch out they hide something.
- Try to understand what they are doing and where they are heading
- Look what the will offer you for your money!
Difficulty: Medium/hard
Stress: Medium/low
Risk: Medium/High
Profit: Good/Very good
Investment: From Low to high
  1. Krypto
Boy oh boy where to start. I heard to many experts saying yeah krypto thats future boyyyyyy I invested everything BOYYYYYYY and in few month I will be rich BOIIIIII. I heard this story so often that Iam allgeric to it now. This irregulated mess based purly on speculations wasnt anything form me. I didnt invest a cent into it and had lots of chances when bitcoin was 300-500 €. It didnt simply fit into my portfolio. It had no function for me. You could pay for your drugs in the deep web and some hipster pizzerias accepted it but in generell it had no function. So investing into kryptos is just speclutions it has no real fundation what I like.
My friends who invested early made a ton of money but all the people on the Hypetrain crashed.
Difficulty: I dont know
Stress: Depends how much storys you make about it on Instagra´m
Risk: Over 9000
Profit: It can be everything from super high to low in just few days
Investment: What ever you want, if this is still to expensive for you, make your own coin and hope some Idiot buys it!
Now you know my knowledge ehh more like my opionen on few things now its time for……. Step. 2. Get a rough overview
Back than I didn’t know where to start so I asked everybody for advice like parents, friends , my parents friends, banks, forums, news etc. and got very different results.
Friends and family can be a good source of information how they did it. Of course often investments are impossible to repeat because they are 20 years ago but they can give some good advice. Its nice to hear few cool stories.
Example
Royal Dutch shell hast wo different stocks. One based in england (B) one Dutch version (A) (explained very simple, not 100% accurate). If you purchase Royal Dutch (A) you have to pay a 15% withholding tax that you wouldnt when you buy Royal Dutch (B).
Banks
Banks are terrible to ask. I always had shitty experience. The lured me into meetings, only to sell some shitty investment models from which they make some good money of me or some stupid insurence. They are not interested in your loses or profits they are interested to sell you the next stupid investement from which the make money. They never keep their promises and if you loose they will cheer you up and show their new hot investement and so on and so on until you loose and they drop you.
My mom works kind of in the finance sector and you wont believe home money older people lost ton of money because of this. I also found few very shady investements opportunities who would be illegal but I wont get into detail cause I dont have 100% proof for it and I also dont want to get in any trouble. As you can see Iam not big fan oft them and do not recommend!
News/charts/indexes/Forums
For me charts & news works the best. It’s easily so see what’s going on and gives you a great overview. The chart showed that a stock dropped 5%?! Good! Read the news/forums and find out what is going on! It’s that easy you don’t need 15 monitors and crazy software to understand what is happening. Dont make it to complicated! Have an easy overview about the market which you would like to invest.
Example
My parents invested around a year ago alot in Tesla. It was before Model 3 was released. Tesla had no expierence in mass production and it was clear (at least to me) that they wont have an easy start. They still made no profit and it was the first step to play with the big boys. Back than the Tesla stock was way over 300€ and it was based a lot on speculation and hype. It couldnt live up to they hype and dropped ≈ 30% - 35%.
  1. Few points & strategies
No Emotions
Never ever let your emotions guide you. Stocks are not based on a stomach feeling or any other emotion. Dont invest just because you like Elon Musk or Apple or anything. If I have a the chance to invest into one because the timing is right. Always make sure you know what you are doing. When it can wait a day, sleep a night about it and be sober! You can get sucked up into this world you will start giving a shit if you lose one grand and start digging deeper and deeper and lose sense the value of it. Stay sober and now when you have to stop.
Making losses
It will happend and dont freak out !
They are two options how to handle it and it depends on few things.
  1. Sell them, you see the ship is sinking and their no possibility you can save it than sell it, It hurts but better early than it is to late. Or you find a better possibility to invest for example a start up than its also fine.
  2. Keep it! Turning a Short/Mid-term investement into a long-term investement. Check first if the company will recover from it. For example the VW stocks dropped a lot due it scandal few years ago but it was clear that they will not go bankrupt so after a while they recover from it. Technically the market will grow infinite so after every crash they reach new heights, if you can wait that long the chances are high that you will make some profit and do not lose any money. Maybe the profit will be small but better than losing everything.
Diversity
Dont put all your eggs in one basket but also dont but every egg in a different basket. Have a good mix that you can still have an overview about your investment. Dont depend on one investment something bad can always happend. Having a good mix is important some investments will go up and few will go down. Its rearly that everything will crash (expect crises). So you can sell the good one and keep the bad ones until they go up.
Scams
Online
Stick to the basics! They are a ton of scammers online who want to show you a way to make fast money. Its mostly some MLM (multi level markting) aka Pryamide sheme, some buying and reselling some stuff from China or some weird option trading platform where pay in and your money is gone in 5 min without any trace o fit (no chance getting it back)! The Instagram advertisment is so ridiculous and I feel stupid mentioning it but hey if it wouldnt work they wouldnt exist. So please dont be this guy….
Offline
I really wanted to invest and have an own start-up. I met many people and visited countless seminars. Few of them offered me to invest but it was a mostly a mess. Onced I got fooled. A friend and I meet a person who had a start up for social media. We had some meetings restaurant he paid everything for us and looked very legit. I worked 3-4 month in this start up 3-4 hours a day, even on weekends for free. Only later to find out I was the only one working in it. (My friend pulled out very early cause he wanted to focus on his PhD) They rest oft he Team did absolute nothing! All the money the company generated was based on my work. They didnt make a lot of money but around 600-800€ a month. The founder spend all the money on vacation and stuff. I never got anything. They wanted to sell me 10% of the company for 15.000€. I always said I need more inside infos, which of course I never got. So I pulled out and they went mad and threaten me to sue me. I feel to this day ashamed that I trusted them and didnt saw it.
If you want get into something like this make a contract dont rely on handshakes people will tell you everything and wont keep it. I learned it the hard way
Be open minded
I met enough people who dont want to share with me their portfolio because they are scared that I will steal something from them. Its stupid! Talk to as many people als possible about your investment. Some amazing things can happend. I meet to many great people because of that and with some I share a 5+ years long friendship maybe we dont share the same ideas but I leanred a lot of it and sometimes I made some profit because of it! Be open !
Prediction & graphic lines
When I did my first Investment (it was gold) I read every morning every article about it I could for at least a solid year. Every monring 20 min Thats rouhly 120 hours. Thats time I will never get back. It was wasted time. The news/articels predicted everything. It was a rollercoaster. I believed it in the beginning because it was new to me. It really messed me up and I spend way to much time overthinking. Its fine to see a prediction but the more extreme it is the more it will never happend.
Also the trendlines are mostly worthless. I read so many people talking about the 50 day trendline or the 200 day trendline. It only idicates if a stock goes up or down but people interepte everything into it. “Oh yeah you can see the restience at 12.50 if it will drop below everbody will sell“. The next day it dropped and nothing happend. Dont believe everything in the internet. (lol)
Keep it simple
Dont make it to complicated you can have the best infos and charts and everything in the world and still lose everything. So dont make it to hard for yourself.
THE MOST IMPORTANT ADVICE
No depts
Dont take a credit just because you know a great investment. No matter how much you could earn DO NOT TAKE A CREDIT. This can not only ruin you financily but also your family and your whole life. This is no joke! Make no depts.
DO NOT MAKE FUCKING DEBTS!
My Strategy
It is a mixture of long term and mid-term stock investments. Its very easy I invested in:
Before I buy some
- Royal Dutch because of the high dividend
- Deutsche Bank when the hit nearly a all time low hoping to recover (still hoping ☹ )
- Lufthansa because they bought few airlines and hopefully will grow but its not (thanks Greta !)
- Tesla because they are low and made some good deals for the future. (update, sold it and made 30-35% in 6 weeks)
Am I rich or making a lot of money?! Hell no! But Iam making enough to pay for my holidays and few extras. I am patient enough to sit out bad times. I never sold anything with loose and I want to keep it that way. I like having a clean record.
Thanks for reading and feel free to ask my everything.
submitted by Ostblocktricker to howto [link] [comments]

IoT Testing !!!

IoT is a whole ecosystem that contains intelligent devices equipped with sensors (sensors) that provide remote control, storage, transmission and security of data. The Internet of Things (IoT) is an innovative solution in various areas such as healthcare, insurance, labor protection, logistics, ecology, etc. To unleash the full potential of using IoT devices, it is necessary to solve many problems related to standards, security, architecture, ecosystem construction, channels and device connection protocols. Today in the world, large organizations such as NIST, IEEE, ISO / IEC, and others make enormous efforts in addressing the issues of standardization, security, and the architecture of developed devices. Analysis of recent scientific research in the field of solving information security issues and data privacy of IoT devices showed positive results, but these methods and approaches are based on traditional methods of network security. The development and application of security mechanisms for IoT devices is a complex and heterogeneous task. In this regard, ensuring information security and the protection of sensitive data, as well as the availability of IoT devices, is the main purpose of writing this article. Given the above, many questions arise related to the security status of IoT devices, namely: What are the current standards and protocols for IoT? What are the requirements for ensuring information security of IoT devices? What security mechanisms do IoT devices have? What methods of testing IoT devices exist? Manufacturers and developers of IoT devices do not pay enough attention to security issues. With the development of cyber-attacks, attack vectors are becoming more sophisticated and aimed at several infrastructure elements at the same time. IoT infrastructure typically includes millions of connected objects and devices that store and share confidential information. Scenarios of theft and fraud, such as hacking and falsifying personal data, pose a serious threat to such IoT devices. Most IoT devices use the public Internet to exchange data, which makes them vulnerable to cyber-attacks. Modern approaches to information security often offer solutions to individual problems, when multi-level approaches offer increased resistance to cyber-attacks.
Challenges of testing IoT devices
To a request to name essential items, many would answer: food, a roof over your head, clothes … With one caveat: this was the case in the last century.
Since then, the species Homo Sapiens has accumulated needs. We need automatic sensors to control the lighting, not just switches, for smart systems to monitor health and car traffic. The list goes on … In general, we can make life easier and better.
Let’s try to figure out how all this Internet of things works before moving on to testing.
IoT testing
Content
What is the Internet of Things (IoT)? Examples of IoT devices # 1) Wearable technology: # 2) Infrastructure and development # 3) Health Technologies that are present in IoT IoT Testing # 1) Usability: # 2) IoT Security: # 3) Network features: # 4) Efficiency: # 5) Compatibility testing: # 6) Pilot testing: # 7) Check for compliance: # 8) Testing updates: IoT testing challenges # 1) Hard / soft # 2) Device Interaction Model # 3) Testing data coming in real time # 4) UI # 5) Network Availability IoT Testing Tools # 1) Software: # 2) Hard: Total What is the Internet of Things (IoT)? The Internet of things (or IoT) is a network that combines many objects: vehicles, home automation, medical equipment, microchips, etc. All these constituent elements accumulate and transmit data. Through this technology, the user controls the devices remotely.

Examples of IoT devices

# 1) Wearable technology: Fitbit Fitness Bracelets and Apple Watch smart watches sync seamlessly with other mobile devices.

IoT – watches and bracelets

Itís easier to collect health information: heart rate, body activity during sleep, etc.
# 2) Infrastructure and development The CitySense app analyzes lighting data online and turns lights on and off automatically. There are applications that control traffic lights or report on the availability of parking lots.
# 3) Health Some health monitoring systems are used in hospitals. The basis of their work is indicative data. These services control the dosage of drugs at different times of the day. For example, the UroSense application monitors the level of fluid in the body and, if necessary, increases this level. And doctors will learn about patient information wirelessly.
Technologies that are present in IoT RFID (Radio Frequency Identification), EPC (Electronic Product Code) NFC (ìNear Field Communicationî) provides two-way communication between devices. This technology is present in smartphones and is used for contactless transactions.
Bluetooth It is widely used in situations where near-field communication is sufficient. Most often present in wearable devices. Z-Wave. Low frequency RF technology. Most often used for home automation, lighting control, etc. WiFi. The most popular network for IoT (file, data and message transfer). IoT Testing Consider an example : a medical system that monitors health status, heart rate, fluid content, and sends reports to healthcare providers. Data is displayed in the system; archives available. And doctors are already deciding whether to take medication for the patient remotely.
IoT architecture
There are several approaches for testing the IoT architecture.
# 1) Usability: It is necessary to provide usability testing of each device. A medical device that monitors your health should be portable.
Sufficiently thought out equipment is needed that would send not only notifications, but also error messages, warnings, etc. The system must have an option that captures events, so that the end user understands. If this is not possible, event information is stored in the database. The ability to process data and exchange tasks between devices is carefully checked. # 2) IoT Security: Data is at the heart of all connected devices. Therefore, unauthorized access during data transfer is not ruled out. From the point of view of software testing, it is necessary to check how secure / encrypted the data is. If there is a UI, you need to check if it is password protected. # 3) Network features: Network connectivity and IoT functionality are critical. After all, we are talking about a system that is used for health purposes. Two main aspects are tested: The presence of a network , the possibility of data transfer (whether jobs are transferred from one device to another without any hitch). The scenario when there is no connection . Regardless of the level of reliability of the system, it is likely that the status of the system will be ìofflineî. If the network is unavailable, employees of the hospital or other organization need to know about it (notifications). Thus, they will be able to monitor the condition of the patient themselves, and not wait for the system to work. On the other hand, in such systems there is usually a mechanism that saves data if the system is offline. That is, data loss is eliminated. # 4) Efficiency: It is necessary to take into account the extent to which the healthcare solution is applicable in specific conditions. In testing, from 2 to 10 patients participate, data is transmitted to 10-20 devices. If the entire hospital is connected to the network, this is already 180-200 patients. That is, there will be more actual data than test data. In addition, it is necessary to test the utility for monitoring the system: current load, power consumption, temperature, etc. # 5) Compatibility testing: This item is always present in the plan for testing the IoT system. The compatibility of different versions of operating systems, browser types and their respective versions, devices of different generations, communication modes [for example, Bluetooth 2.0, 3.0] is extremely important for IoT. # 6) Pilot testing: Pilot testing is a mandatory point of the test plan. Only tests in the laboratory will allow us to conclude that the system is functional. In pilot testing, the number of users is limited. They make manipulations with the application and express their opinion. These comments turn out to be very helpful, they make a reliable application. # 7) Check for compliance: The system, which monitors the state of health, undergoes many compliance checks. It also happens that a software product passes all stages of testing, but fails the final test for compliance [testing is carried out by the regulatory body]. It is more advisable to check for compliance with norms and standards before starting the development cycle. # 8) Testing updates: IoT is a combination of many protocols, devices, operating systems, firmware, hardware, network layers, etc. When an update occurs – be it a system or something else of the above – rigorous regression testing is required. The overall strategy is being amended to avoid the difficulties associated with the upgrade.

IoT testing challengesIoT testing

# 1) Hard / soft IoT is an architecture in which software and hardware components are closely intertwined. Not only software is important, but also hard: sensors, gateways, etc.
Functional testing alone will not be enough to certify the system. All components are interdependent. IoT is much more complicated than simpler systems [only software or only hard].
# 2) Device Interaction Model Components of the network must interact in real time or close to real. All this becomes a single whole – hence the additional difficulties associated with IoT (security, backward compatibility and updates).
# 3) Testing data coming in real time Obtaining this data is extremely difficult. The matter is complicated by the fact that the system, as in the described case, may relate to the health sector.
# 4) UI An IoT network usually consists of different devices that are controlled by different platforms [iOS, Android, Windows, linux]. Testing is possible only on some devices, since testing on all possible devices is almost impossible.
# 5) Network Availability Network connectivity plays an important role in IoT. The data rate is increasing. IoT architecture should be tested under various connection conditions, at different speeds. Virtual network emulators in most cases are used to diversify network load, connectivity, stability, and other elements of load testing . But the evidence is always new scenarios, and the testing team does not know where the difficulties will arise in the future.

IoT Testing ToolsIoT and software

There are many tools that are used in testing IoT systems.
They are classified depending on the purpose:
# 1) Software: Wireshark : An open source tool. Used to monitor traffic in the interface, source / given host address, etc. Tcpdump : This tool does a similar job. The utility does not have a GUI, its interface is the command line. It enables the user to flash TCP / IP and other packets that are transmitted over the network. # 2) Hard: JTAG Dongle: A tool similar to debuggers in PC applications. Allows you to find defects in the code of the target platform and shows the changes step by step. Digital Storage Oscilloscope : checks various events using time stamps, power outages, signal integrity. Software Defined Radio : emulates a transmitter and receiver for various wireless gateways. IoT is an emerging market and many opportunities. In the foreseeable future, the Internet of things will become one of the main areas of work for tester teams. Network devices, smart gadget applications, communication modules – all this plays an important role in the study and evaluation of various services.
Total The approach to testing IoT may vary depending on the specific system / architecture.
Itís difficult to test IoT, but at the same time itís an interesting job, since testers have a good place to swing – there are many devices, protocols and operating systems.
PS You should try out the TAAS format (“tests from the user’s point of view”), and not just fulfill the formal requirements.
—————
Smart watches, baby-sitters, wireless gadgets and devices such as, for example, a portable radio station have long been part of everyday life.
Hackers have already proven that many of these attacks on IoT are possible.
Many people in general first learned about IoT security threats when they heard about the Mirai botnet in September 2016.
According to some estimates, Mirai infected about 2.5 million IoT devices, including printers, routers and cameras connected to the Internet.
The botnetís creators used it to launch distributed denial of service (DDoS) attacks, including an attack on the KrebsonSecurity cybersecurity blog.
In fact, the attackers used all devices infected with Mirai to try to connect to the target site at the same time, in the hope of suppressing the servers and preventing access to the site.
Since Mirai was first published on the news, attackers launched other botnet attacks on IoT, including Reaper and Hajime.
Experts say that such attacks are most likely in the future.
The Internet of Things (IoT) can bring many advantages to modern life, but it also has one huge drawback: security threats.
In its 2018 IOT forecasts, Forroter Research notes: ìSecurity threats are a major concern for companies deploying IoT solutions – in fact, this is the main task of organizations looking to deploy IoT solutions.
However, most firms do not regularly prevent IoT-specific security threats, and business pressure suppresses technical security issues. î
IoT security risks can be even more significant on the consumer side, where people are often unaware of potential threats and what they should do to avoid threats.
A 2017 IoT security survey sponsored by Gemalto Security Provider found that only 14 percent of consumers surveyed consider themselves IoT-aware.
This number is particularly noteworthy because 54 percent of the respondents owned an average of four IoT devices.
And these IoT security threats are not just theoretical.
Hackers and cybercriminals have already found ways to compromise many IoT devices and networks, and experts say that successful attacks are likely to increase.
Forrester predicted: “In 2018, we will see more attacks related to IoT … except that they will increase in scale and loss.”
What types of IoT security threats will enterprises and consumers face in 2018?
Based on historical precedent, here are ten of the most likely types of attacks.
  1. Botnets and DDoS attacks
  2. Remote recording The possibility that attackers can hack IoT devices and record owners without their knowledge is not revealed as a result of the work of hackers, but as a result of the work of the Central Intelligence Agency (CIA).
Documents released by WikiLeaks implied that the spy agency knew about dozens of zero-day exploits for IoT devices, but did not disclose errors, because they hoped to use vulnerabilities to secretly record conversations that would reveal the actions of alleged opponents of America.
Documents pointed to vulnerabilities in smart TVs, as well as on Android and iOS smartphones.
The obvious consequence is that criminals can also exploit these vulnerabilities for their vile purposes.
  1. Spam In January 2014, one of the first known attacks using IoT devices used more than 100,000 Internet-connected devices, including televisions, routers, and at least one smart refrigerator to send 300,000 spam emails per day.
The attackers sent no more than 10 messages from each device, which makes it very difficult to block or determine the location of the incident.
This first attack was not far from the last.
IoT spam attacks continued in the fall with the Linux.ProxyM IoT botnet.
  1. APTs In recent years, advanced persistent threats (APTs) have become a serious concern for security professionals.
APTs are carried out by funded and widespread attackers such as nation states or corporations that launch complex cyberattacks that are difficult to prevent or mitigate.
For example, the Stuxnet worm, which destroyed Iranian nuclear centrifuges and hacking Sony Pictures 2014, was attributed to nation states.
Because the critical infrastructure is connected to the Internet, many experts warn that APTs may launch a power-oriented IoT attack, industrial control systems, or other systems connected to the Internet.
Some even warn that terrorists could launch an attack on iOT, which could harm the global economy.
  1. Ransomware Ransomware has become too common on home PCs and corporate networks. Now experts say that it is only a matter of time before the attackers begin to block smart devices. Security researchers have already demonstrated the ability to install ransomware on smart thermostats. For example, they can raise the temperature to 95 degrees and refuse to return it to its normal state until the owner agrees to pay a ransom in Bitcoins. They can also launch similar attacks on garage doors, vehicles, or even appliances. How much would you pay to unlock your smart coffee pot first thing in the morning?
  2. Data theft Obtaining important data, such as customer names, credit card numbers, social security numbers, and other personal information, is still one of the main goals of cyber attacks.
IoT devices represent a whole new vector of attack for criminals looking for ways to invade corporate or home networks.
For example, if an improperly configured device or IoT sensor is connected to corporate networks, this can give attackers a new way to enter the network and potentially find the valuable data that they need.
  1. Home theft As smart locks and smart garage doors become more commonplace, it is also more likely that cybercriminals can become real thieves.
Home systems that are not properly protected can be vulnerable to criminals with sophisticated tools and software.
Security researchers are unlikely to have shown that itís quite easy to break into a house through smart locks from several different manufacturers, and smart garage doors do not seem to be much safer.
  1. Communication with children One of the most disturbing IoT security stories came from children.
One couple discovered that the stranger not only used his monitor for children to spy on their three-year-old son, this stranger also spoke with his child through the device.
Mother heard an unknown voice: ìWake up, boy, dad is looking for you,î and the child said that he was scared because at night someone was talking to him on an electronic device.
As more and more children’s gadgets and toys connect to the Internet, it seems likely that these frightening scenarios may become more common.
  1. Remote control of a vehicle As vehicles become smarter and more accessible on the Internet, they also become vulnerable to attack.
Hackers have shown that they can take control of a jeep, maximize air conditioning, change the radio station, start the wipers, and ultimately slow down the car.
The news led to the recall of 1.4 million cars, but whitehat researchers, following the original exploit, said they discovered additional vulnerabilities that were not fixed by the Chrysler patch applied to the recalled cars.
Although experts say the automotive industry is doing a great job of ensuring vehicle safety, it is almost certain that attackers will find new vulnerabilities in such smart cars.
  1. Personal attacks Sometimes IoT covers more than just devices – it can also include people who have connected medical devices implanted in their bodies.
An episode of the television series Homeland attempted a murder aimed at an implanted medical device, and former vice president Dick Cheney was so worried about this scenario that he turned off the wireless capabilities on his implanted defibrillator.
This kind of attack has not yet happened in real life, but it remains possible, as many medical devices become part of the IoT.
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Which are your top 5 coins out of the top100? An analysis.

I am putting together my investment portfolio for 2018 and made a complete summary of the current Top 100. Interestingly, I noticed that all coins can be categorized into 12 markets. Which markets do you think will play the biggest role in the coming year?
Here is a complete overview of all coins in an excel sheet including name, a full description, market, TPS, risk profile, time since launch (negative numbers mean that they are launching that many months in the future) and market cap. You can also sort by all of these fields of course. Coins written in bold are the strongest contenders within their market either due to having the best technology or having a small market cap and still excellent technology and potential. https://docs.google.com/spreadsheets/d/1s8PHcNvvjuy848q18py_CGcu8elRGQAUIf86EYh4QZo/edit#gid=0
The 12 markets are
  1. Currency 13 coins
  2. Platform 25 coins
  3. Ecosystem 9 coins
  4. Privacy 9 coins
  5. Currency Exchange Tool 8 coins
  6. Gaming & Gambling 4 coins
  7. Misc 15 coins
  8. Social Network 4 coins
  9. Fee Token 3 coins
  10. Decentralized Data Storage 4 coins
  11. Cloud Computing 2 coins
  12. Stable Coin 3 coins
Before we look at the individual markets, we need to take a look of the overall market and its biggest issue, scalability, first:
Cryptocurrencies aim to be a decentralized currency that can be used worldwide. Their goal is to replace dollar, Euro, Yen, all FIAT currencies globally. The coin that will achieve that will be worth several trillion dollars.
Bitcoin can only process 7 transactions per second (TPS) currently. In order to replace all FIAT, it would need to perform at least at VISA levels, which usually processes around 3,000 TPS, up to 25,000 TPS during peak times and a maximum of 64,000 TPS. That means that this cryptocurrency would need to be able to perform at least several thousand TPS. However, a ground breaking technology should not look at current technology to set a goal for its use, i.e. estimating the number of emails sent in 1990 based on the number of faxes sent wasn’t a good estimate.
For that reason, 10,000 TPS is the absolute baseline for a cryptocurrency that wants to replace FIAT. This brings me to IOTA, which wants to connect all 80 billion IoT devices that are expected to exist by 2025, which constantly communicate with each other, possibly creating 80 billion or more transactions per second. This is the benchmark that cryptocurrencies should be aiming for. Currently, 8 billion devices are connected to the Internet.
With its Lightning network recently launched, Bitcoin is realistically looking at 50,000 possible TPS soon. Other notable cryptocurrencies besides IOTA and Bitcoin are Nano with 7,000 TPS already tested, Dash with several billion TPS possible with Masternodes, Neo, LISK and RHOC with 100,000 TPS by 2020, Ripple with 50,000 TPS, Ethereum with 10,000 TPS with Sharding.
However, it needs to be said that scalability usually goes at the cost of decentralization and security. So, it needs to be seen, which of these technologies can prove themselves decentralized while maintaining high TPS.
Without further ado, here are the coins of the first market. Each market is sorted by market cap.

Market 1 - Currency:

  1. Bitcoin: 1st generation blockchain with currently bad scalability, though the implementation of the Lightning Network looks promising and could alleviate most scalability and high energy use concerns.
  2. Ripple: Centralized currency that might become very successful due to tight involvement with banks and cross-border payments for financial institutions; banks and companies like Western Union and Moneygram (who they are currently working with) as customers customers. However, it seems they are aiming for more decentralization now.https://ripple.com/dev-blog/decentralization-strategy-update/. Has high TPS due to Proof of Correctness algorithm.
  3. Bitcoin Cash: Bitcoin fork with the difference of having an 8 times bigger block size, making it 8 times more scalable than Bitcoin currently. Further block size increases are planned. Only significant difference is bigger block size while big blocks lead to further problems that don't seem to do well beyond a few thousand TPS. Opponents to a block size argue that increasing the block size limit is unimaginative, offers only temporary relief, and damages decentralization by increasing costs of participation. In order to preserve decentralization, system requirements to participate should be kept low. To understand this, consider an extreme example: very big blocks (1GB+) would require data center level resources to validate the blockchain. This would preclude all but the wealthiest individuals from participating.Community seems more open than Bitcoin's though.
  4. Litecoin : Little brother of Bitcoin. Bitcoin fork with different mining algorithm but not much else.Copies everything that Bitcoin does pretty much. Lack of real innovation.
  5. Dash: Dash (Digital Cash) is a fork of Bitcoin and focuses on user ease. It has very fast transactions within seconds, low fees and uses Proof of Service from Masternodes for consensus. They are currently building a system called Evolution which will allow users to send money using usernames and merchants will find it easy to integrate Dash using the API. You could say Dash is trying to be a PayPal of cryptocurrencies. Currently, cryptocurrencies must choose between decentralization, speed, scalability and can pick only 2. With Masternodes, Dash picked speed and scalability at some cost of decentralization, since with Masternodes the voting power is shifted towards Masternodes, which are run by Dash users who own the most Dash.
  6. IOTA: 3rd generation blockchain called Tangle, which has a high scalability, no fees and instant transactions. IOTA aims to be the connective layer between all 80 billion IOT devices that are expected to be connected to the Internet in 2025, possibly creating 80 billion transactions per second or 800 billion TPS, who knows. However, it needs to be seen if the Tangle can keep up with this scalability and iron out its security issues that have not yet been completely resolved.
  7. Nano: 3rd generation blockchain called Block Lattice with high scalability, no fees and instant transactions. Unlike IOTA, Nano only wants to be a payment processor and nothing else, for now at least. With Nano, every user has their own blockchain and has to perform a small amount of computing for each transaction, which makes Nano perform at 300 TPS with no problems and 7,000 TPS have also been tested successfully. Very promising 3rd gen technology and strong focus on only being the fastest currency without trying to be everything.
  8. Decred: As mining operations have grown, Bitcoin’s decision-making process has become more centralized, with the largest mining companies holding large amounts of power over the Bitcoin improvement process. Decred focuses heavily on decentralization with their PoW Pos hybrid governance system to become what Bitcoin was set out to be. They will soon implement the Lightning Network to scale up. While there do not seem to be more differences to Bitcoin besides the novel hybrid consensus algorithm, which Ethereum, Aeternity and Bitcoin Atom are also implementing, the welcoming and positive Decred community and professoinal team add another level of potential to the coin.
  9. Bitcoin Atom: Atomic Swaps and hybrid consenus. This looks like the only Bitcoin clone that actually is looking to innovate next to Bitcoin Cash.
  10. Dogecoin: Litecoin fork, fantastic community, though lagging behind a bit in technology.
  11. Bitcoin Gold: A bit better security than bitcoin through ASIC resistant algorithm, but that's it. Not that interesting.
  12. Digibyte: Digibyte's PoS blockchain is spread over a 100,000+ servers, phones, computers, and nodes across the globe, aiming for the ultimate level of decentralization. DigiByte’s adoption over the past four years has been slow. The DigiByte website offers a lot of great marketing copy and buzzwords. However, there’s not much technical information about what they have planned for the future. You could say Digibyte is like Bitcoin, but with shorter blocktimes and a multi-algorithm. However, that's not really a difference big enough to truly set themselves apart from Bitcoin, since these technologies could be implemented by any blockchain without much difficulty. Their decentralization is probably their strongest asset, however, this also change quickly if the currency takes off and big miners decide to go into Digibyte.
  13. Bitcoin Diamond Asic resistant Bitcoin and Copycat

Market 2 - Platform

Most of the cryptos here have smart contracts and allow dapps (Decentralized apps) to be build on their platform and to use their token as an exchange of value between dapp services.
  1. Ethereum: 2nd generation blockchain that allows the use of smart contracts. Bad scalability currently, though this concern could be alleviated by the soon to be implemented Lightning Network aka the Raiden Network, Plasma and its Sharding concept.
  2. EOS: Promising technology that wants to be able do everything, from smart contracts like Ethereum, scalability similar to Nano with 1000 tx/second + near instant transactions and zero fees, to also wanting to be a platform for dapps. However, EOS doesn't have a product yet and everything is just promises still. There are lots of red flags, e.g. having dumped $500 million Ether over the last 2 months and possibly bought back EOS to increase the size of their ICO, which has been going on for over a year and has raised several billion dollars. All in all, their market cap is way too high for that and not even having a product. However, Mainnet release is in 1 month, which could change everything.
  3. Cardano: Similar to Ethereum/EOS, however, only promises made with no delivery yet, highly overrated right now. Interesting concept though. Market cap way too high for not even having a product. Somewhat promising technology.
  4. VeChain: Singapore-based project that’s building a business enterprise platform and inventory tracking system. Examples are verifying genuine luxury goods and food supply chains. Has one of the strongest communities in the crypto world. Most hyped token of all, with merit though.
  5. Neo: Neo is a platform, similar to Eth, but more extensive, allowing dapps and smart contracts, but with a different smart contract gas system, consensus mechanism (PoS vs. dBfT), governance model, fixed vs unfixed supply, expensive contracts vs nearly free contracts, different ideologies for real world adoption. There are currently only 9 nodes, each of which are being run by a company/entity hand selected by the NEO council (most of which are located in china) and are under contract. This means that although the locations of the nodes may differ, ultimately the neo council can bring them down due to their legal contracts. In fact this has been done in the past when the neo council was moving 50 million neo that had been locked up. Also dbft (or neo's implmentation of it) has failed underload causing network outages during major icos. The first step in decentralization is that the NEO Counsel will select trusted nodes (Universities, business partners, etc.) and slowly become less centralized that way. The final step in decentralization will be allowing NEO holders to vote for new nodes, similar to a DPoS system (ARK/EOS/LISK). NEO has a regulation/government friendly ideology. Finally they are trying to work undewith the Chinese government in regards to regulations. If for some reason they wanted it shut down, they could just shut it down.
  6. Stellar:PoS system, similar goals as Ripple, but more of a platform than only a currency. 80% of Stellar are owned by Stellar.org still, making the currency centralized.
  7. Ethereum classic: Original Ethereum that decided not to fork after a hack. The Ethereum that we know is its fork. Uninteresing, because it has a lot of less resources than Ethereum now and a lot less community support.
  8. Ziliqa: Zilliqa is building a new way of sharding. 2400 tpx already tested, 10,000 tps soon possible by being linearly scalable with the number of nodes. That means, the more nodes, the faster the network gets. They are looking at implementing privacy as well.
  9. QTUM: Enables Smart contracts on the Bitcoin blockchain. Useful.
  10. Icon: Korean ethereum. Decentralized application platform that's building communities in partnership with banks, insurance providers, hospitals, and universities. Focused on ID verification and payments.
  11. LISK: Lisk's difference to other BaaS is that side chains are independent to the main chain and have to have their own nodes. Similar to neo whole allows dapps to deploy their blockchain to. Like most cryptocurrencies, Lisk is currently somewhat centralized with a small group of members owning more than 50% of the delegated positions. Lisk plans to change the consensus algorithm for that reason in the near future.
  12. Rchain: Similar to Ethereum with smart contract, though much more scalable at an expected 40,000 TPS and possible 100,000 TPS. Not launched yet. No product launched yet, though promising technology. Not overvalued, probably at the right price right now.
  13. ARDR: Similar to Lisk. Ardor is a public blockchain platform that will allow people to utilize the blockchain technology of Nxt through the use of child chains. A child chain, which is a ‘light’ blockchain that can be customized to a certain extent, is designed to allow easy self-deploy for your own blockchain. Nxt claims that users will "not need to worry" about security, as that part is now handled by the main chain (Ardor). This is the chief innovation of Ardor. Ardor was evolved from NXT by the same company. NEM started as a NXT clone.
  14. Ontology: Similar to Neo. Interesting coin
  15. Bytom: Bytom is an interactive protocol of multiple byte assets. Heterogeneous byte-assets (indigenous digital currency, digital assets) that operate in different forms on the Bytom Blockchain and atomic assets (warrants, securities, dividends, bonds, intelligence information, forecasting information and other information that exist in the physical world) can be registered, exchanged, gambled and engaged in other more complicated and contract-based interoperations via Bytom.
  16. Nxt: Similar to Lisk
  17. Aeternity: We’ve seen recently, that it’s difficult to scale the execution of smart contracts on the blockchain. Crypto Kitties is a great example. Something as simple as creating and trading unique assets on Ethereum bogged the network down when transaction volume soared. Ethereum and Zilliqa address this problem with Sharding. Aeternity focuses on increasing the scalability of smart contracts and dapps by moving smart contracts off-chain. Instead of running on the blockchain, smart contracts on Aeternity run in private state channels between the parties involved in the contracts. State channels are lines of communication between parties in a smart contract. They don’t touch the blockchain unless they need to for adjudication or transfer of value. Because they’re off-chain, state channel contracts can operate much more efficiently. An important aspect of smart contract and dapp development is access to outside data sources. This could mean checking the weather in London, score of a football game, or price of gold. Oracles provide access to data hosted outside the blockchain. In many blockchain projects, oracles represent a security risk and potential point of failure, since they tend to be singular, centralized data streams. Aeternity proposes decentralizing oracles with their oracle machine. Doing so would make outside data immutable and unchangeable once it reaches Aeternity’s blockchain. Aeternity’s network runs on on a hybrid of proof of work and proof of stake. Founded by a long-time crypto-enthusiast and early colleague of Vitalik Buterin, Yanislav Malahov. Promising concept though not product yet
  18. Stratis: Different to LISK, Stratis will allow businesses and organizations to create their own blockchain according to their own needs, but secured on the parent Stratis chain. Stratis’s simple interface will allow organizations to quickly and easily deploy and/or test blockchain functionality of the Ethereum, BitShares, BitCoin, Lisk and Stratis environements.
  19. Status: Status provides access to all of Ethereum’s decentralized applications (dapps) through an app on your smartphone. It opens the door to mass adoption of Ethereum dapps by targeting the fastest growing computer segment in the world – smartphone users.
  20. Ark: Fork of Lisk that focuses on a smaller feature set. Ark wallets can only vote for one delegate at a time which forces delegates to compete against each other and makes cartel formations incredibly hard, if not impossible.
  21. Neblio: Similar to Neo, but at a 30x smaller market cap.
  22. NEM: Is similar to Neo. However, it has no marketing team, very high market cap for little clarilty what they do.
  23. Bancor: Bancor is a Decentralized Liquidity Network that allows you to hold any Ethereum token and convert it to any other token in the network, with no counter party, at an automatically calculated price, using a simple web wallet.
  24. Dragonchain: The Purpose of DragonChain is to help companies quickly and easily incorporate blockchain into their business applications. Many companies might be interested in making this transition because of the benefits associated with serving clients over a blockchain – increased efficiency and security for transactions, a reduction of costs from eliminating potential fraud and scams, etc.
  25. Skycoin: Transactions with zero fees that take apparently two seconds, unlimited transaction rate, no need for miners and block rewards, low power usage, all of the usual cryptocurrency technical vulnerabilities fixed, a consensus mechanism superior to anything that exists, resistant to all conceivable threats (government censorship, community infighting, cybenucleaconventional warfare, etc). Skycoin has their own consensus algorithm known as Obelisk written and published academically by an early developer of Ethereum. Obelisk is a non-energy intensive consensus algorithm based on a concept called ‘web of trust dynamics’ which is completely different to PoW, PoS, and their derivatives. Skywire, the flagship application of Skycoin, has the ambitious goal of decentralizing the internet at the hardware level and is about to begin the testnet in April. However, this is just one of the many facets of the Skycoin ecosystem. Skywire will not only provide decentralized bandwidth but also storage and computation, completing the holy trinity of commodities essential for the new internet. Skycion a smear campaign launched against it, though they seem legit and reliable. Thus, they are probably undervalued.

Market 3 - Ecosystem

The 3rd market with 11 coins is comprised of ecosystem coins, which aim to strengthen the ease of use within the crypto space through decentralized exchanges, open standards for apps and more
  1. Nebulas: Similar to how Google indexes webpages Nebulas will index blockchain projects, smart contracts & data using the Nebulas rank algorithm that sifts & sorts the data. Developers rewarded NAS to develop & deploy on NAS chain. Nebulas calls this developer incentive protocol – basically rewards are issued based on how often dapp/contract etc. is used, the more the better the rewards and Proof of devotion. Works like DPoS except the best, most economically incentivised developers (Bookkeeppers) get the forging spots. Ensuring brains stay with the project (Cross between PoI & PoS). 2,400 TPS+, DAG used to solve the inter-transaction dependencies in the PEE (Parallel Execution Environment) feature, first crypto Wallet that supports the Lightening Network.
  2. Waves: Decentralized exchange and crowdfunding platform. Let’s companies and projects to issue and manage their own digital coin tokens to raise money.
  3. Salt: Leveraging blockchain assets to secure cash loands. Plans to offer cash loans in traditional currencies, backed by your cryptocurrency assets. Allows lenders worldwide to skip credit checks for easier access to affordable loans.
  4. CHAINLINK: ChainLink is a decentralized oracle service, the first of its kind. Oracles are defined as an ‘agent’ that finds and verifies real-world occurrences and submits this information to a blockchain to be used in smart contracts.With ChainLink, smart contract users can use the network’s oracles to retrieve data from off-chain application program interfaces (APIs), data pools, and other resources and integrate them into the blockchain and smart contracts. Basically, ChainLink takes information that is external to blockchain applications and puts it on-chain. The difference to Aeternity is that Chainlink deploys the smart contracts on the Ethereum blockchain while Aeternity has its own chain.
  5. WTC: Combines blockchain with IoT to create a management system for supply chains Interesting
  6. Ethos unifyies all cryptos. Ethos is building a multi-cryptocurrency phone wallet. The team is also building an investment diversification tool and a social network
  7. Komodo: The Komodo blockchain platform uses Komodo’s open-source cryptocurrency for doing transparent, anonymous, private, and fungible transactions. They are then made ultra-secure using Bitcoin’s blockchain via a Delayed Proof of Work (dPoW) protocol and decentralized crowdfunding (ICO) platform to remove middlemen from project funding. Offers services for startups to create and manage their own Blockchains.
  8. Aion: Today, there are hundreds of blockchains. In the coming years, with widespread adoption by mainstream business and government, these will be thousands or millions. Blockchains don’t talk to each other at all right now, they are like the PCs of the 1980s. The Aion network is able to support custom blockchain architectures while still allowing for cross-chain interoperability by enabling users to exchange data between any Aion-compliant blockchains by making use of an interchain framework that allows for messages to be relayed between blockchains in a completely trust-free manner.
  9. Tenx: Raised 80 million, offers cryptocurrency-linked credit cards that let you spend virtual money in real life. Developing a series of payment platforms to make spending cryptocurrency easier.

Market 4 - Privacy

The 4th market are privacy coins. As you might know, Bitcoin is not anonymous. If the IRS or any other party asks an exchange who is the identity behind a specific Bitcoin address, they know who you are and can track back almost all of the Bitcoin transactions you have ever made and all your account balances. Privacy coins aim to prevent exactly that through address fungability, which changes addresses constantly, IP obfuscation and more. There are 2 types of privacy coins, one with completely privacy and one with optional privacy. Optional Privacy coins like Dash and Nav have the advantage of more user friendliness over completely privacy coins such as Monero and Enigma.
  1. Monero: Currently most popular privacy coin, though with a very high market cap. Since their privacy is all on chain, all prior transactions would be deanonymized if their protocol is ever cracked. This requires a quantum computing attack though. PIVX is better in that regard.
  2. Zcash: A decentralized and open-source cryptocurrency that hide the sender, recipient, and value of transactions. Offers users the option to make transactions public later for auditing. Decent privacy coin, though no default privacy
  3. Verge: Calls itself privacy coin without providing private transactions, multiple problems over the last weeks has a toxic community, and way too much hype for what they have.
  4. Bytecoin: First privacy-focused cryptocurrency with anonymous transactions. Bytecoin’s code was later adapted to create Monero, the more well-known anonymous cryptocurrency. Has several scam accusations, 80% pre-mine, bad devs, bad tech
  5. Bitcoin Private: A merge fork of Bitcoin and Zclassic with Zclassic being a fork of Zcash with the difference of a lack of a founders fee required to mine a valid block. This promotes a fair distribution, preventing centralized coin ownership and control. Bitcoin private offers the optional ability to keep the sender, receiver, and amount private in a given transaction. However, this is already offered by several good privacy coins (Monero, PIVX) and Bitcoin private doesn't offer much more beyond this.
  6. PIVX: As a fork of Dash, PIVX uses an advanced implementation of the Zerocoin protocol to provide it’s privacy. This is a form of zeroknowledge proofs, which allow users to spend ‘Zerocoins’ that have no link back to them. Unlike Zcash u have denominations in PIVX, so they can’t track users by their payment amount being equal to the amount of ‘minted’ coins, because everyone uses the same denominations. PIVX is also implementing Bulletproofs, just like Monero, and this will take care of arguably the biggest weakness of zeroknowledge protocols: the trusted setup.
  7. Zcoin: PoW cryptocurrency. Private financial transactions, enabled by the Zerocoin Protocol. Zcoin is the first full implementation of the Zerocoin Protocol, which allows users to have complete privacy via Zero-Knowledge cryptographic proofs.
  8. Enigma: Monero is to Bitcoin what enigma is to Ethereum. Enigma is for making the data used in smart contracts private. More of a platform for dapps than a currency like Monero. Very promising.
  9. Navcoin: Like bitcoin but with added privacy and pos and 1,170 tps, but only because of very short 30 second block times. Though, privacy is optional, but aims to be more user friendly than Monero. However, doesn't really decide if it wants to be a privacy coin or not. Same as Zcash.Strong technology, non-shady team.

Market 5 - Currency Exchange Tool

Due to the sheer number of different cryptocurrencies, exchanging one currency for the other it still cumbersome. Further, merchants don’t want to deal with overcluttered options of accepting cryptocurrencies. This is where exchange tool like Req come in, which allow easy and simple exchange of currencies.
  1. Cryptonex: Fiat and currency exchange between various blockchain services, similar to REQ.
  2. QASH: Qash is used to fuel its liquid platform which will be an exchange that will distribute their liquidity pool. Its product, the Worldbook is a multi-exchange order book that matches crypto to crypto, and crypto to fiat and the reverse across all currencies. E.g., someone is selling Bitcoin is USD on exchange1 not owned by Quoine and someone is buying Bitcoin in EURO on exchange 2 not owned by Quoine. They turned it on to test it a few months ago for an hour or so and their exchange was the top exchange in the world by 4x volume for the day because all Worldbook trades ran through it. Binance wants BNB to be used on their one exchange. Qash wants their QASH token embedded in all of their partners.
  3. Kyber: network Exchange between cryptocurrencies, similar to REQ. Features automatic coin conversions for payments. Also offers payment tools for developers and a cryptocurrency wallet.
  4. Achain: Building a boundless blockchain world like Req .
  5. Centrality: Centrality is a decentralized market place for dapps that are all connected together on a blockchain-powered system. Centrality aims to allow businesses to work together using blockchain technology. With Centrality, startups can collaborate through shared acquisition of customers, data, merchants, and content. That shared acquisition occurs across the Centrality blockchain, which hosts a number of decentralized apps called Scenes. Companies can use CENTRA tokens to purchase Scenes for their app, then leverage the power of the Centrality ecosystem to quickly scale. Some of Centrality's top dapps are, Skoot, a travel experience marketplace that consists of a virtual companion designed for free independent travelers and inbound visitors, Belong, a marketplace and an employee engagement platform that seems at helping business provide rewards for employees, Merge, a smart travel app that acts as a time management system, Ushare, a transports application that works across rental cars, public transport, taxi services, electric bikes and more. All of these dapps are able to communicate with each other and exchange data through Centrality.
  6. Bitshares: Exchange between cryptocurrencies. Noteworthy are the 1.5 second average block times and throughput potential of 100,000 transactions per second with currently 2,400 TPS having been proven. However, Bitshares had several Scam accusations in the past.
  7. Loopring: A protocol that will enable higher liquidity between exchanges and personal wallets by pooling all orders sent to its network and fill these orders through the order books of multiple exchanges. When using Loopring, traders never have to deposit funds into an exchange to begin trading. Even with decentralized exchanges like Ether Delta, IDex, or Bitshares, you’d have to deposit your funds onto the platform, usually via an Ethereum smart contract. But with Loopring, funds always remain in user wallets and are never locked by orders. This gives you complete autonomy over your funds while trading, allowing you to cancel, trim, or increase an order before it is executed.
  8. ZRX: Open standard for dapps. Open, permissionless protocol allowing for ERC20 tokens to be traded on the Ethereum blockchain. In 0x protocol, orders are transported off-chain, massively reducing gas costs and eliminating blockchain bloat. Relayers help broadcast orders and collect a fee each time they facilitate a trade. Anyone can build a relayer.

Market 6 - Gaming

With an industry size of $108B worldwide, Gaming is one of the largest markets in the world. For sure, cryptocurrencies will want to have a share of that pie.
  1. Storm: Mobile game currency on a platform with 9 million players.
  2. Fun: A platform for casino operators to host trustless, provably-fair gambling through the use of smart contracts, as well as creating their own implementation of state channels for scalability.
  3. Electroneum: Mobile game currency They have lots of technical problems, such as several 51% attacks
  4. Wax: Marketplace to trade in-game items

Market 7 - Misc

There are various markets being tapped right now. They are all summed up under misc.
  1. OMG: Omise is designed to enable financial services for people without bank accounts. It works worldwide and with both traditional money and cryptocurrencies.
  2. Power ledger: Australian blockchain-based cryptocurrency and energy trading platform that allows for decentralized selling and buying of renewable energy. Unique market and rather untapped market in the crypto space.
  3. Populous: Populous is a platform that connects business owners and invoice buyers without middlemen. Furthermore, it is a peer-to-peer (P2P) platform that uses blockchain to provide small and medium-sized enterprises (SMEs) a more efficient way to participate in invoice financing. Businesses can sell their outstanding invoices at a discount to quickly free up some cash. Invoice sellers get cash flow to fund their business and invoice buyers earn interest.
  4. Monacoin: The first Japanese cryptocurrency. Focused on micro-transactions and based on a popular internet meme of a type-written cat. This makes it similar to Dogecoin. Very niche, tiny market.
  5. Revain: Legitimizing reviews via the blockchain. Interesting concept, though market not as big.
  6. Augur: Platform to forecast and make wagers on the outcome of real-world events (AKA decentralized predictions). Uses predictions for a “wisdom of the crowd” search engine. Not launched yet.
  7. Substratum: Revolutionzing hosting industry via per request billing as a decentralized internet hosting system. Uses a global network of private computers to create the free and open internet of the future. Participants earn cryptocurrency. Interesting concept.
  8. Veritaseum: Is supposed to be a peer to peer gateway, though it looks like very much like a scam.
  9. TRON: Tronix is looking to capitalize on ownership of internet data to content creators. However, they plagiarized their white paper, which is a no go. They apologized, so it needs to be seen how they will conduct themselves in the future. Extremely high market cap for not having a product, nor proof of concept.
  10. Syscoin: A cryptocurrency with a decentralized marketplace that lets people buy and sell products directly without third parties. Trying to remove middlemen like eBay and Amazon.
  11. Hshare: Most likely scam because of no code changes, most likely pump and dump scheme, dead community.
  12. BAT: An Ethereum-based token that can be exchanged between content creators, users, and advertisers. Decentralized ad-network that pays based on engagement and attention.
  13. Dent: Decentralizeed exchange of mobile data, enabling mobile data to be marketed, purchased or distributed, so that users can quickly buy or sell data from any user to another one.
  14. Ncash: End to end encrypted Identification system for retailers to better serve their customers .
  15. Factom Secure record-keeping system that allows companies to store their data directly on the Blockchain. The goal is to make records more transparent and trustworthy .

Market 8 - Social network

Web 2.0 is still going strong and Web 3.0 is not going to ignore it. There are several gaming tokens already out there and a few with decent traction already, such as Steem, which is Reddit with voting through money is a very interesting one.
  1. Mithril: As users create content via social media, they will be rewarded for their contribution, the better the contribution, the more they will earn
  2. Steem: Like Reddit, but voting with money. Already launched product and Alexa rank 1,000 Thumbs up.
  3. Rdd: Reddcoin makes the process of sending and receiving money fun and rewarding for everyone. Reddcoin is dedicated to one thing – tipping on social networks as a way to bring cryptocurrency awareness and experience to the general public.
  4. Kin: Token for the platform Kik. Kik has a massive user base of 400 million people. Replacing paying with FIAT with paying with KIN might get this token to mass adoption very quickly.

Market 9 - Fee token

Popular exchanges realized that they can make a few billion dollars more by launching their own token. Owning these tokens gives you a reduction of trading fees. Very handy and BNB (Binance Coin) has been one of the most resilient tokens, which have withstood most market drops over the last weeks and was among the very few coins that could show growth.
  1. BNB: Fee token for Binance
  2. Gas: Not a Fee token for an exchange, but it is a dividend paid out on Neo and a currency that can be used to purchase services for dapps.
  3. Kucoin: Fee token for Kucoin

Market 10 - Decentralized Data Storage

Currently, data storage happens with large companies or data centers that are prone to failure or losing data. Decentralized data storage makes loss of data almost impossible by distributing your files to numerous clients that hold tiny pieces of your data. Remember Torrents? Torrents use a peer-to-peer network. It is similar to that. Many users maintain copies of the same file, when someone wants a copy of that file, they send a request to the peer-to-peer network., users who have the file, known as seeds, send fragments of the file to the requester. The requester receives many fragments from many different seeds, and the torrent software recompiles these fragments to form the original file.
  1. Gbyte: Byteball data is stored and ordered using directed acyclic graph (DAG) rather than blockchain. This allows all users to secure each other's data by referencing earlier data units created by other users, and also removes scalability limits common for blockchains, such as blocksize issue.
  2. Siacoin: Siacoin is decentralized storage platform. Distributes encrypted files to thousands of private users who get paid for renting out their disk space. Anybody with siacoins can rent storage from hosts on Sia. This is accomplish via "smart" storage contracts stored on the Sia blockchain. The smart contract provides a payment to the host only after the host has kept the file for a given amount of time. If the host loses the file, the host does not get paid.
  3. Maidsafecoin: MaidSafe stands for Massive Array of Internet Disks, Secure Access for Everyone.Instead of working with data centers and servers that are common today and are vulnerable to data theft and monitoring, You can think of SAFE as a crowd-sourced internet. It’s an autonomous network that automatically sets prices and distributes data and rents out hard drive disk space with a Blockchain-based storage solutions.When you upload a file to the network, such as a photo, it will be broken into pieces, hashed, and encrypted. Then, redundant copies of the data are created as well so that if someone storing your file turns off their computer, you will still have access to your data. And don’t worry, even with pieces of your data on other people’s computers, they won’t be able to read them. You can earn MadeSafeCoins by participating in storing data pieces from the network on your computer and thus earning a Proof of Resource.
  4. Storj: Storj aims to become a cloud storage platform that can’t be censored or monitored, or have downtime. Your files are encrypted, shredded into little pieces called 'shards', and stored in a decentralized network of computers around the globe. No one but you has a complete copy of your file, not even in an encrypted form.

Market 11 - Cloud computing

Obviously, renting computing power, one of the biggest emerging markets as of recent years, e.g. AWS and Digital Ocean, is also a service, which can be bought and managed via the blockchain.
  1. Golem: Allows easy use of Supercomputer in exchange for tokens. People worldwide can rent out their computers to the network and get paid for that service with Golem tokens.
  2. Elf: Allows easy use of Cloud computing in exchange for tokens.

Market 12 - Stablecoin

Last but not least, there are 2 stablecoins that have established themselves within the market. A stable coin is a coin that wants to be independent of the volatility of the crypto markets. This has worked out pretty well for Maker and DGD, accomplished through a carefully diversified currency fund and backing each token by 1g or real gold respectively. DO NOT CONFUSE DGD AND MAKER with their STABLE COINS DGX and DAI. DGD and MAKER are volatile, because they are the companies of DGX and DAI. DGX and DAI are the stable coins.
  1. DGD: Platform of the Stablecoin DGX. Every DGX coin is backed by 1g of gold and make use proof of asset consensus.
  2. Maker: Platform of the Stablecoin DAI that doesn't vary much in price through widespread and smart diversification of assets.
  3. USDT: is no cryptocurrency really, but a replacement for dollar for trading After months of asking for proof of dollar backing, still no response from Tether.
EDIT: Added a risk factor from 0 to 10. Significant scandals, mishaps, shady practices, questionable technology, increase the risk factor. Not having a product yet automatically means a risk factor of 6. Strong adoption and thus strong scrutiny or positive community lower the risk factor.
EDIT2: Added a subjective potential factor from 0 to 10, where its overall potential and a small or big market cap is factored in. Bitcoin with lots of potential only gets a 9, because of its massive market cap, because if Bitcoin goes 10x, smaller coins go 100x.
submitted by galan77 to ethtrader [link] [comments]

The Great Bitcoin Bull Market Of 2017 by Trace Mayer

By: Trace Mayer, host of The Bitcoin Knowledge Podcast.
Originally posted here with images and Youtube videos.
I just got back from a two week vacation without Internet as I was scouring some archeological ruins. I hardly thought about Bitcoin at all because there were so many other interesting things and it would be there when I got back.
Jimmy Song suggested I do an article on the current state of Bitcoin. A great suggestion but he is really smart (he worked on Armory after all!) so I better be thorough and accurate!
Therefore, this article will be pretty lengthy and meticulous.
BACKGROUND
As I completely expected, the 2X movement from the New York Agreement that was supposed to happen during the middle of my vacation flopped on its face because Jeff Garzik was driving the clown car with passengers willfully inside like Coinbase, Blockchain.info, Bitgo and Xapo and there were here massive bugS and in the code and miners like Bitmain did not want to allocate $150-350m to get it over the difficulty adjustments.
I am very disappointed in their lack of integrity with putting their money where their mouths are; myself and many others wanted to sell a lot of B2X for BTC!
On 7 December 2015, with Bitcoin trading at US$388.40, I wrote The Rise of the Fourth Great Bitcoin Bubble. On 4 December 2016, with Bitcoin trading at US$762.97, I did this interview:

As of 26 November 2017, Bitcoin is trading around US$9,250.00. That is an increase of about 2,400% since I wrote the article prognosticating this fourth great Bitcoin bull market. I sure like being right, like usual (19 Dec 2011, 1 Jul 2013), especially when there are financial and economic consequences.
With such massive gains in such a short period of time the speculative question becomes: Buy, Hold or Sell?
FUNDAMENTALS
Bitcoin is the decentralized censorship-resistant Internet Protocol for transferring value over a communications channel.
The Bitcoin network can use traditional Internet infrastructure. However, it is even more resilient because it has custom infrastructure including, thanks to Bitcoin Core developer Matt Corrallo, the FIBRE network and, thanks to Blockstream, satellites which reduce the cost of running a full-node anywhere in the world to essentially nothing in terms of money or privacy. Transactions can be cheaply broadcast via SMS messages.
SECURITY
The Bitcoin network has a difficulty of 1,347,001,430,559 which suggests about 9,642,211 TH/s of custom ASIC hardware deployed.
At a retail price of approximately US$105/THs that implies about $650m of custom ASIC hardware deployed (35% discount applied).
This custom hardware consumes approximately 30 TWh per year. That could power about 2.8m US households or the entire country of Morocco which has a population of 33.85m.
This Bitcoin mining generates approximately 12.5 bitcoins every 10 minutes or approximately 1,800 per day worth approximately US$16,650,000.
Bitcoin currently has a market capitalization greater than $150B which puts it solidly in the top-30 of M1 money stock countries and a 200 day moving average of about $65B which is increasing about $500m per day.
Average daily volumes for Bitcoin is around US$5B. That means multi-million dollar positions can be moved into and out of very easily with minimal slippage.
When my friend Andreas Antonopolous was unable to give his talk at a CRYPSA event I was invited to fill in and delivered this presentation, impromptu, on the Seven Network Effects of Bitcoin.
These seven network effects of Bitcoin are (1) Speculation, (2) Merchants, (3) Consumers, (4) Security [miners], (5) Developers, (6) Financialization and (7) Settlement Currency are all taking root at the same time and in an incredibly intertwined way.
With only the first network effect starting to take significant root; Bitcoin is no longer a little experiment of magic Internet money anymore. Bitcoin is monster growing at a tremendous rate!!

SPECULATION
For the Bitcoin price to remain at $9,250 it requires approximately US$16,650,000 per day of capital inflow from new hodlers.
Bitcoin is both a Giffen good and a Veblen good.
A Giffen good is a product that people consume more of as the price rises and vice versa — seemingly in violation of basic laws of demand in microeconomics such as with substitute goods and the income effect.
Veblen goods are types of luxury goods for which the quantity demanded increases as the price increases in an apparent contradiction of the law of demand.
There are approximately 16.5m bitcoins of which ~4m are lost, ~4-6m are in deep cold storage, ~4m are in cold storage and ~2-4m are salable.
(http://www.runtogold.com/images/lost-bitcoins-1.jpg)
(http://www.runtogold.com/images/lost-bitcoins-2.jpg)
And forks like BCash (BCH) should not be scary but instead be looked upon as an opportunity to take more territory on the Bitcoin blockchain by trading the forks for real bitcoins which dries up more salable supply by moving it, likely, into deep cold storage.
According to Wikipedia, there are approximately 15.4m millionaires in the United States and about 12m HNWIs ($30m+ net worth) in the world. In other words, if every HNWI in the world wanted to own an entire bitcoin as a 'risk-free asset' that cannot be confiscated, seized or have the balance other wise altered then they could not.
For wise portfolio management, these HNWIs should have at least about 2-5% in gold and 0.5-1% in bitcoin.
Why? Perhaps some of the 60+ Saudis with 1,700 frozen bank accounts and about $800B of assets being targetted might be able to explain it to you.
In other words, everyone loves to chase the rabbit and once they catch it then know that it will not get away.
RETAIL
There are approximately 150+ significant Bitcoin exchanges worldwide. Kraken, according to the CEO, was adding about 6,000 new funded accounts per day in July 2017.
Supposedly, Coinbase is currently adding about 75,000 new accounts per day. Based on some trade secret analytics I have access to; I would estimate Coinbase is adding approximately 17,500 new accounts per day that purchase at least US$100 of Bitcoin.
If we assume Coinbase accounts for 8% of new global Bitcoin users who purchase at least $100 of bitcoins (just pulled out of thin error and likely very conservative as the actual number is perhaps around 2%) then that is approximately $21,875,000 of new capital coming into Bitcoin every single day just from retail demand from 218,750 total new accounts.
What I have found is that most new users start off buying US$100-500 and then after 3-4 months months they ramp up their capital allocation to $5,000+ if they have the funds available.
After all, it takes some time and practical experience to learn how to safely secure one's private keys.
To do so, I highly recommend Bitcoin Core (network consensus and full validation of the blockchain), Armory (private key management), Glacier Protocol (operational procedures) and a Puri.sm laptop (secure non-specialized hardware).
WALL STREET
There has been no solution for large financial fiduciaries to invest in Bitcoin. This changed November 2017.
LedgerX, whose CEO I interviewed 23 March 2013, began trading as a CFTC regulated Swap Execution Facility and Derivatives Clearing Organization.
The CME Group announced they will begin trading in Q4 2017 Bitcoin futures.
The CBOE announced they will begin trading Bitcoin futures soon.
By analogy, these institutional products are like connecting a major metropolis's water system (US$90.4T and US$2 quadrillion) via a nanoscopic shunt to a tiny blueberry ($150B) that is infinitely expandable.
This price discovery could be the most wild thing anyone has ever experienced in financial markets.
THE GREAT CREDIT CONTRACTION
The same week Bitcoin was released I published my book The Great Credit Contraction and asserted it had now begun and capital would burrow down the liquidity pyramid into safer and more liquid assets.
(http://www.runtogold.com/images/Great-Credit-Contraction-Liquidity-Pyramid.jpg)
Thus, the critical question becomes: Is Bitcoin a possible solution to the Great Credit Contraction by becoming the safest and most liquid asset?
BITCOIN'S RISK PROFILE
At all times and in all circumstances gold remains money but, of course, there is always exchange rate risk due to price ratios constantly fluctuating. If the metal is held with a third-party in allocated-allocated storage (safest possible) then there is performance risk (Morgan Stanley gold storage lawsuit).
But, if properly held then, there should be no counter-party risk which requires the financial ability of a third-party to perform like with a bank account deposit. And, since gold exists at a single point in space and time therefore it is subject to confiscation or seizure risk.
Bitcoin is a completely new asset type. As such, the storage container is nearly empty with only $150B.
And every Bitcoin transaction effectively melts down every BTC and recasts it; thus ensuring with 100% accuracy the quantity and quality of the bitcoins. If the transaction is not on the blockchain then it did not happen. This is the strictest regulation possible; by math and cryptography!
This new immutable asset, if properly secured, is subject only to exchange rate risk. There does exist the possibility that a software bug may exist that could shut down the network, like what has happened with Ethereum, but the probability is almost nil and getting lower everyday it does not happen.
Thus, Bitcoin arguably has a lower risk profile than even gold and is the only blockchain to achieve security, scalability and liquidity.
To remain decentralized, censorship-resistant and immutable requires scalability so as many users as possible can run full-nodes.
(http://www.runtogold.com/images/ethereum-bitcoin-scability-nov-2017.png)
TRANSACTIONS
Some people, probably mostly those shilling alt-coins, think Bitcoin has a scalability problem that is so serious it requires a crude hard fork to solve.
On the other side of the debate, the Internet protocol and blockchain geniuses assert the scalability issues can, like other Internet Protocols have done, be solved in different layers which are now possible because of Segregated Witness which was activated in August 2017.
Whose code do you want to run: the JV benchwarmers or the championship Chicago Bulls?
As transaction fees rise, certain use cases of the Bitcoin blockchain are priced out of the market. And as the fees fall then they are economical again.
Additionally, as transaction fees rise, certain UTXOs are no longer economically usable thus destroying part of the money supply until fees decline and UTXOs become economical to move.
There are approximately 275,000-350,000 transactions per day with transaction fees currently about $2m/day and the 200 DMA is around $1.08m/day.
(http://www.runtogold.com/images/bitcoin-transaction-fees-nov-2017.png)
What I like about transaction fees is that they somewhat reveal the financial health of the network.
The security of the Bitcoin network results from the miners creating solutions to proof of work problems in the Bitcoin protocol and being rewarded from the (1) coinbase reward which is a form of inflation and (2) transaction fees which is a form of usage fee.
The higher the transaction fees then the greater implied value the Bitcoin network provides because users are willing to pay more for it.
I am highly skeptical of blockchains which have very low transaction fees. By Internet bubble analogy, Pets.com may have millions of page views but I am more interested in EBITDA.
DEVELOPERS
Bitcoin and blockchain programming is not an easy skill to acquire and master. Most developers who have the skill are also financially independent now and can work on whatever they want.
The best of the best work through the Bitcoin Core process. After all, if you are a world class mountain climber then you do not hang out in the MacDonalds play pen but instead climb Mount Everest because that is where the challenge is.
However, there are many talented developers who work in other areas besides the protocol. Wallet maintainers, exchange operators, payment processors, etc. all need competent developers to help build their businesses.
Consequently, there is a huge shortage of competent developers. This is probably the largest single scalability constraint for the ecosystem.
Nevertheless, the Bitcoin ecosystem is healthier than ever before.
(http://www.runtogold.com/images/bitcoin-ecosystem.jpg)(/images/bitcoin-ecosystem-small.jpg)
SETTLEMENT CURRENCY
There are no significant global reserve settlement currency use cases for Bitcoin yet.
Perhaps the closest is Blockstream's Strong Federations via Liquid.
PRICE
There is a tremendous amount of disagreement in the marketplace about the value proposition of Bitcoin. Price discovery for this asset will be intense and likely take many cycles of which this is the fourth.
Since the supply is known the exchange rate of Bitcoins is composed of (1) transactional demand and (2) speculative demand.
Interestingly, the price elasticity of demand for the transactional demand component is irrelevant to the price. This makes for very interesting dynamics!
(http://www.runtogold.com/images/bitcoin-speculation.jpg)
On 4 May 2017, Lightspeed Venture Partners partner Jeremy Liew who was among the early Facebook investors and the first Snapchat investor laid out their case for bitcoin exploding to $500,000 by 2030.
On 2 November 2017, Goldman Sachs CEO Lloyd Blankfein (https://www.bloomberg.com/news/articles/2017-11-02/blankfein-says-don-t-dismiss-bitcoin-while-still-pondering-value)said, "Now we have paper that is just backed by fiat...Maybe in the new world, something gets backed by consensus."
On 12 Sep 2017, JP Morgan CEO called Bitcoin a 'fraud' but conceded that "(http://fortune.com/2017/09/12/jamie-dimon-bitcoin-cryptocurrency-fraud-buy/)Bitcoin could reach $100,000".
Thus, it is no surprise that the Bitcoin chart looks like a ferret on meth when there are such widely varying opinions on its value proposition.
I have been around this space for a long time. In my opinion, those who scoffed at the thought of $1 BTC, $10 BTC (Professor Bitcorn!), $100 BTC, $1,000 BTC are scoffing at $10,000 BTC and will scoff at $100,000 BTC, $1,000,000 BTC and even $10,000,000 BTC.
Interestingly, the people who understand it the best seem to think its financial dominance is destiny.
Meanwhile, those who understand it the least make emotionally charged, intellectually incoherent bearish arguments. A tremendous example of worldwide cognitive dissonance with regards to sound money, technology and the role or power of the State.
Consequently, I like looking at the 200 day moving average to filter out the daily noise and see the long-term trend.
(http://www.runtogold.com/images/bitcoin-price-200dma-nov-2017.png)
Well, that chart of the long-term trend is pretty obvious and hard to dispute. Bitcoin is in a massive secular bull market.
The 200 day moving average is around $4,001 and rising about $30 per day.
So, what do some proforma situations look like where Bitcoin may be undervalued, average valued and overvalued? No, these are not prognostications.
(http://www.runtogold.com/images/bitcoin-price-pro-forma.png)
Maybe Jamie Dimon is not so off his rocker after all with a $100,000 price prediction.
We are in a very unique period of human history where the collective globe is rethinking what money is and Bitcoin is in the ring battling for complete domination. Is or will it be fit for purpose?
As I have said many times before, if Bitcoin is fit for this purpose then this is the largest wealth transfer in the history of the world.
CONCLUSION
Well, this has been a brief analysis of where I think Bitcoin is at the end of November 2017.
The seven network effects are taking root extremely fast and exponentially reinforcing each other. The technological dominance of Bitcoin is unrivaled.
The world is rethinking what money is. Even CEOs of the largest banks and partners of the largest VC funds are honing in on Bitcoin's beacon.
While no one has a crystal ball; when I look in mine I see Bitcoin's future being very bright.
Currently, almost everyone who has bought Bitcoin and hodled is sitting on unrealized gains as measured in fiat currency. That is, after all, what uncharted territory with daily all-time highs do!
But perhaps there is a larger lesson to be learned here.
Riches are getting increasingly slippery because no one has a reliable defined tool to measure them with. Times like these require incredible amounts of humility and intelligence guided by macro instincts.
Perhaps everyone should start keeping books in three numéraires: USD, gold and Bitcoin.
Both gold and Bitcoin have never been worth nothing. But USD is a fiat currency and there are thousands of those in the fiat currency graveyard. How low can the world reserve currency go?
After all, what is the risk-free asset? And, whatever it is, in The Great Credit Contraction you want it!
What do you think? Disagree with some of my arguments or assertions? Please, eviscerate them on Twitter or in the comments!
submitted by bitcoinknowledge to Bitcoin [link] [comments]

Crypto-Currency: A Guide to Common Tax Situations

Introduction
All,
Based on the rapid increase in popularity and price of bitcoin and other crypto currencies (particularly over the past year), I expect that lots of people have questions about how crypto currency will impact their taxes. This thread attempts to address several common issues. I'm posting similar versions of it here, in several other major crypto subs, and in personalfinance.
I'd like to thank the /personalfinance mod team and the /tax community for their help with this thread and especially for reading earlier versions and offering several valuable suggestions/corrections.
Finally, please note that this thread attempts to provide information about your tax obligations as defined by United States law (and interpreted by the IRS under the direction of the Treasury Department). I understand that a certain portion of the crypto community tends to view crypto as "tax free" due to the (actual and perceived) difficulty for the IRS to "know" about the transactions involved. I will not discuss unlawfully concealing crypto gains here nor will I suggest illegal tax avoidance activities.
The Basics
This section is best for people that don't understand much about taxes. It covers some very basic tax principles. It also assumes that all you did during the year was buy/sell a single crypto currency.
Fundamentally, the IRS treats crypto not as money, but as an asset (investment). While there are a few specific "twists" when it comes to crypto, when in doubt replace the word "crypto" with the word "stock" and you will get a pretty good idea how you should report and pay tax on crypto.
The first thing you should know is that the majority of this discussion applies to the taxes you are currently working on (2017 taxes). The tax bill that just passed applies to 2018 taxes (with a few very tiny exceptions), which most people will file in early 2019.
In general, you don't have to report or pay taxes on crypto currency holdings until you "cash out" all or part of your holdings. For now, I'm going to assume that you cash out by selling them for USD; however, other forms of cashing out will be covered later.
When you sell crypto, you report the difference between your basis (purchase price) and proceeds (sale price) on Schedule D. Your purchase price is commonly referred to as your basis; while the two terms don't mean exactly the same thing, they are pretty close to one another (in particular, there are three ways to calculate your basis - your average cost, a first-in, first-out method, and a "specific identification" method. See more about these here and here). If you sell at a gain, this gain increases your tax liability; if you sell at a loss, this loss decreases your tax liability (in most cases). If you sell multiple times during the year, you report each transaction separately (bad news if you trade often) but get to lump all your gains/losses together when determining how the trades impact your income.
One important thing to remember is that there are two different types of gains/losses from investments - short term gains (if you held an asset for one year or less) and long term gains (over one year; i.e. one year and one day). Short term gains are taxed at your marginal income rate (basically, just like if you had earned that money at a job) while long term gains are taxed at lower rates.
For most people, long term capital gains are taxed at 15%. However, if you are in the 10% or 15% tax bracket, congrats - your gains (up to the maximum amount of "unused space" in your bracket) are tax free! If you are in the 25%, 28%, 33%, or 35% bracket, long term gains are taxed at 15%. If you are in the 39.6% bracket, long term gains are taxed at 20%. Additionally, there is an "extra" 3.8% tax that applies to gains for those above $200,000/$250,000 (single/married). The exact computation of this tax is a little complicated, but if you are close to the $200,000 level, just know that it exists.
Finally, you should know that I'm assuming that you should treat your crypto gains/losses as investment gains/losses. I'm sure some people will try and argue that they are really "day traders" of crypto and trade as a full time job. While this is possible, the vast majority of people don't qualify for this status and you should really think several times before deciding you want to try that approach on the IRS.
"Cashing Out" - Trading Crypto for Goods/Services
I realize that not everyone that "cashes out" of crypto does so by selling it for USD. In fact, I understand that some in the crypto community view the necessity of cashing out itself as a type of myth. In this section, I discuss what happens if you trade your crypto for basically anything that isn't cash (minor sidenote - see next section for a special discussion on trading crypto for crypto; i.e. buying altcoins with crypto).
The IRS views trading crypto for something of value as a type of bartering that must be included in income. From the IRS's perspective, it doesn't matter if you sold crypto for cash and bought a car with that cash or if you just traded crypto directly for the car - in both cases, the IRS views you as having sold your crypto. This approach isn't unique to crypto - it works the same way if you trade stock for something.
This means that if you do trade your crypto for "stuff", you have to report every exchange as a sale of your crypto and calculate the gain/loss on that sale, just as if you had sold the crypto for cash.
Finally, there is one important exception to this rule. If you give your crypto away to charity (one recognized by the IRS; like a 501(c)(3) organization), the IRS doesn't make you report/pay any capital gains on the transaction. Additionally, you still get to deduct the value of your donation on the date it was made. Now, from a "selfish" point of view, you will always end up with more money if you sell the crypto, pay the tax, and keep the rest. But, if you are going to make a donation anyway, especially a large one, giving crypto where you have a big unrealized/untaxed gain is a very efficient way of doing so.
"Alt Coins" - Buying Crypto with Crypto
The previous section discusses what happens when you trade crypto for stuff. However, one thing that surprises many people is that trading crypto for crypto is also a taxable event, just like trading crypto for a car. Whether you agree with this position or not, it makes a lot of sense once you realize that the IRS doesn't view crypto as money, but instead as an asset. So to the IRS, trading bitcoin for ripple isn't like trading dollars for euros, but it is instead like trading shares of Apple stock for shares of Tesla stock.
Practically, what this means is that if you trade one crypto for another crypto (say BTC for XRP just to illustrate the point), the IRS views you as doing the following:
  • Selling for cash the amount of BTC you actually traded for XRP.
  • Owing capital gains/losses on the BTC based on its selling price (the fair market value at the moment of the exchange) and your purchase price (basis).
  • Buying a new investment (XRP) with a cost basis equal to the amount the BTC was worth when you exchanged them.
This means that if you "time" your trade wrong and the value of XRP goes down after you make the exchange, you still owe tax on your BTC gain even though you subsequently lost money. The one good piece of news in this is that when/if you sell your XRP (or change it back to BTC), you will get a capital loss for the value that XRP dropped.
There is one final point worth discussing in this section - the so called "like kind exchange" rules (aka section 1031 exchange). At a high level, these rules say that you can "swap" property with someone else without having to pay taxes on the exchange as long as you get property in return that is "like kind". Typically, these rules are used in real estate transactions. However, they can also apply to other types of transactions as well.
While the idea is simple (and makes it sound like crypto for crypto should qualify), the exact rules/details of this exception are very fact specific. Most experts (including myself, but certainly not calling myself an expert) believe that a crypto for crypto swap is not a like kind exchange. The recently passed tax bill also explicitly clarifies this issue - starting in 2018, only real estate qualifies for like kind exchange treatment. So, basically, the vast majority of evidence suggests that you can't use this "loophole" for 2017; however, there is a small minority view/some small amount of belief that this treatment would work for 2017 taxes and it is worth noting that I'm unaware of any court cases directly testing this approach.
Dealing with "Forks"
Perhaps another unpleasant surprise for crypto holders is that "forks" to create a new crypto also very likely generate a taxable event. The IRS has long (since at least the 1960s) held that "found" money is a taxable event. This approach has been litigated in court and courts have consistently upheld this position; it even has its own cool nerdy tax name - the "treasure trove" doctrine.
Practically, what this means is that if you owned BTC and it "forked" to create BCH, then the fair market value of the BCH you received is considered a "treasure trove" that must be reported as income (ordinary income - no capital gain rates). This is true whether or not you sold your BCH; if you got BCH from a fork, that is a taxable event (note - I'll continue using BTC forking to BCH in this section as an example, but the logic applies to all forks).
While everything I've discussed up to this point is pretty clearly established tax law, forks are really where things get messy with taxes. Thus, the remainder of this section contains more speculation than elsewhere in this post - the truth is that while the idea is simple (fork = free money = taxable), the details are messy and other kinds of tax treatment might apply to forks.
One basic practical problem with forks is that the new currency doesn't necessarily start trading immediately. Thus, you may have received BCH before there was a clear price or market for it. Basically, you owe tax on the value of BCH when you received it, but it isn't completely clear what that value was. There are several ways you can handle this; I'll list them in order from most accurate to least accurate (but note that this is just my personal view and there is ongoing disagreement on this issue with little/no authoritative guidance).
  • Use a futures market to determine the value of the BCH - if reliable sources published realistic estimates of what BCH will trade for in the future once trading begins, use this estimate as the value of your BCH. Pros/cons - futures markets are, in theory, pretty accurate. However, if they are volatile/subject to manipulation, they may provide an incorrect estimate of the true value of BCH. It would suck to use the first futures value published only to have that value plummet shortly thereafter, leaving you to pay ordinary income tax but only have an unrealized capital loss.
  • Wait until an exchange starts trading BCH; use the actual ("spot" price) as the value. Pros/cons - spot prices certainly reflect what you could have sold BCH for; however, it is possible that the true value of the coin was highelower when you received it as compared to when it started trading on the exchange. Thus this method seems less accurate to me than a futures based approach, but it is still certainly fairly reasonable.
  • Assume that the value is $0. This is my least preferred option, but there is still a case to be made for it. If you receive something that you didn't want, can't access, can't sell, and might fail, does it have any value? I believe the answer is yes (maybe not value it perfectly, but value it somewhat accurately), but if you honestly think the answer is no, then the correct tax answer would be to report $0 in income from the fork. The IRS would be most likely to disagree with this approach, especially since it results in the least amount of income reported for the current year (and the most favorable rates going forward). Accordingly, if you go this route, make extra sure you understand what it entails.
Note, once you've decided what to report as taxable income, this amount also becomes your cost basis in the new crypto (BCH). Thus, when you ultimately sell your BCH (or trade it for something else as described above), you calculate your gain/loss based on what you included in taxable income from the fork.
Finally, there is one more approach to dealing with forks worth mentioning. A fork "feels" a lot like a dividend - because you held BTC, you get BCH. In a stock world, if I get a cash dividend because I own the stock, that money is not treated as a "treasure trove" and subject to ordinary income rates - in most cases, it is a qualified dividend and subject to capital gain rates; in some cases, some types of stock dividends are completely non taxable. This article discusses this idea in slightly more detail and generally concludes that forks should not be treated as a dividend. Still, I would note that I'm unaware of any court cases directly testing this theory.
Ultimately, this post is supposed to be practical, so let me make sure to leave you with two key thoughts about the taxation of forks. First, I believe that the majority of evidence suggests that forks should be treated as a "treasure trove" and reported as ordinary income based on their value at creation and that this is certainly the "safest" option. Second, out of everything discussed in this post, I also believe that the correct taxation of forks is the murkiest and most "up for debate" area. If you are interested in a more detailed discussion of forks, see this thread for a previous version of this post discussing it at even more length and the comments for a discussion of this with the tax community.
Mining Crypto
Successfully mining crypto coins is a taxable event. Depending on the amount of effort you put into mining, it is either considered a hobby or a self-employment (business) activity. The IRS provides the following list of questions to help decide the correct classification:
  • The manner in which the taxpayer carries on the activity.
  • The expertise of the taxpayer or his advisors.
  • The time and effort expended by the taxpayer in carrying on the activity.
  • Expectation that assets used in activity may appreciate in value.
  • The success of the taxpayer in carrying on other similar or dissimilar activities.
  • The taxpayer’s history of income or losses with respect to the activity.
  • The amount of occasional profits, if any, which are earned.
If this still sounds complicated, that's because the distinction is subject to some amount of interpretation. As a rule of thumb, randomly mining crypto on an old computer is probably a hobby; mining full time on a custom rig is probably a business.
In either event, you must include in income the fair market value of any coins you successfully mine. These are ordinary income and your basis in these coins is their fair market value on the date they were mined. If your mining is a hobby, they go on line 21 (other income) and any expenses directly associated with mining go on schedule A (miscellaneous subject to 2% of AGI limitation). If your mining is a business, income and expenses go on schedule C.
Both approaches have pros and cons - hobby income isn't subject to the 15.3% self-employment tax, only normal income tax, but you get fewer deductions against your income and the deductions you get are less valuable. Business income has more deductions available, but you have to pay payroll (self-employment) tax of about 15.3% in addition to normal income tax.
What if I didn't keep good records? Do I really have to report every transaction?
One nice thing about the IRS treating crypto as an asset is that we can look at how the IRS treats people that "day trade" stock and often don't keep great records/have lots of transactions. While you need to be as accurate as possible, it is ok to estimate a little bit if you don't have exact records (especially concerning your cost basis). You need to put in some effort (research historical prices, etc...) and be reasonable, but the IRS would much rather you do a little bit of reasonable estimation as opposed to just not reporting anything. Sure, they might decide to audit you/disagree with some specifics, but you earn yourself a lot of credit if you can show that you honestly did the best you reasonably could and are making efforts to improve going forward.
However, concerning reporting every transaction - yes, sorry, it is clear that you have to do this, even if you made hundreds or thousands of them. Stock traders have had to go through this for many decades, and there is absolutely no reason to believe that the IRS would accept anything less from the crypto community. If you have the records or have any reasonable way of obtaining records/estimating them, you must report every transaction.
What if I don't trust you?
Well, first let me say that I can't believe you made it all the way down here to this section. Thanks for giving me an honest hearing. I would strongly encourage you to go read other well-written, honest guides. I'll link to some I like (both more technical IRS type guides and more crypto community driven guides). While a certain portion of the crypto community seems to view one of the benefits of crypto as avoiding all government regulation (including taxes), I've been pleasantly surprised to find that many crypto forums contain well reasoned, accurate tax guides. While I may not agree with 100% of their conclusions, that likely reflects true uncertainty around tax law that is fundamentally complex rather than an attempt on either end to help individuals unlawfully avoid taxes.
IRS guides
Non-IRS guides
submitted by Mrme487 to CryptoCurrency [link] [comments]

EOT - Encryption of things

 **EOT - Encryption of things** 
There is a huge surge in devices attached to the internet, known as the Internet of Things, and it is estimated that over 80 Billion devices will be connected to the internet by 2025, from industrial machines to devices in our home. The constant hacking and cyber attacks have increased not only the demand but the necessity of secure solutions. Our privacy and digital footprint are at risk.
[b]Some examples where encryption plays a role:
[b]Secure messaging - To make messages truly secure we need a process whereby a cryptography can be applied to encrypt transaction.
[b]Secure calling - Secure calling is a process whereby the caller and the recipient of the call are identified and linked via a blockchain enabled cryptocurrency transfer, again creating public and private encryption keys making the call truly private.
[b]Secure media storage - To safely and securely store media a process is required where 1.) Access to the media is encrypted via public and private keys of the person wanting to store the media. 2.) The media itself needs to be encrypted with a set of encryption keys and 3.) Media storage costs need to be paid via cryptocurrency
[b]Secure browsing - To browse the internet securely we need to create a process of verification whereby nodes on the blockchain can verify websites as “safe”. Furthermore, the entire process needs to be encrypted as well.
[b]Verification - This is one of the most important uses of a blockchain, we can verify websites as in the example above but also various other things such as identity, title and ownership, date stamps and source of products as with the verification of the source of agricultural or other products. These are just a few examples. All of this data needs to be encrypted as well.
[b]“Smart home” security - Wi-Fi is often used for remote monitoring and control. Home devices, when remotely monitored and controlled via the Internet, are an important constituent of the Internet of Things - all needing encryption, otherwise, hackers paradise.
[b]EOT in the future - The examples we mentioned above are only “scratching the surface” of where these technologies are applicable and who knows what will be invented in future. Google, Apple and Uber are all testing cars that drive themselves. A major issue with this technology is again the security aspect and the need to protect against hacking and who want’s to get into a spaceship to Mars that might be hacked or hijacked by ransomware?
So the future for the [b]“Encryption of Things” – EOT, looks very interesting indeed and the role of crypto currencies in this will be major.
Read the full white paper here - http://eottoken.com/index.php/whitepape
The first device using EOT Coin is the BitVault®[/b] - the World's first crypto communicator and blockchain phone. The BitVault is a revolutionary new product that is built around security and privacy enabled through Blockchain technology. Biometric Security enabled through fingerprint and iris scan. Iris patterns are unique to you and are virtually impossible to replicate. This means that iris authentication is one of the safest ways to keep your BitVault locked and the contents private. Proven Biometric technology brings a whole new level of security to your crypto currency and blockchain transactions. Creating Military grade security for your device through third party independent Multilayer security.
September 2017 – Swiss Bank in Your Pocket integrates EOT Wallet(Achived)
October 2017 – BitVault®, the world’s first blockchain phone launches in London with integration of EOT for secure calling, secure messaging and secure browsing (First batch shipped)
November 2017 – BitVault® Global App Store launches for developers to develop their own applications (Achived)
November 2017 – Website EOT Payment Gateway for WordPress and WooCommerce (ACHIVED)
December 2017 – Cryptodoc stores all your documents securely and encrypted on your PC
December 2017 – Password Wallet stores all your passwords for applications and websites encrypted on your PC January 2018 – Smart Router for secure, encrypted internet which is direct, safe and easy
January 2018 – EOT Camera, an Encryption of Things connected camera
February 2018 – EOT Development Kit for hardware devices
EOT payment gateway live on swissbankinyourpocket.com, Now you can buy SBIYP and BitVault using EOT coins
More on the BitVault here:- https://swissbankinyourpocket.com/bitvault/]https://swissbankinyourpocket.com/bitvault/ https://swissbankinyourpocket.com/bitvault-apps/]https://swissbankinyourpocket.com/bitvault-apps/ https://bitcointalk.org/index.php?topic=2152534.0]https://bitcointalk.org/index.php?topic=2152534.0
JOIN US ON REDDIT : http://www.reddit.com/EncryptionOfThings]www.reddit.com/EncryptionOfThings JOIN US ON SLACK : [url=https://join.slack.com/t/eot-coin/shared_invite/enQtMjc3NzkxNzY5NzQ0LTFjMWI5NTJjOGEzYjU5ZDk0ZjRjZWE3MzBkNmI0MmQ2NTUzMTBkOGQ1YmEyNTllMmNiYzA3MGZjOGVmY2IyZGU
The EOT Token is trading on the Waves Platform, TOKENS are 1:1 image of EOT coins, EOT coins can be converted to tokens and vice versa using gateway service in SBIYP hardware wallet. if you do not have that hardware wallet, you can contact members on slack who have purchased SBIYP to do that swap for you.
TOKEN DETAILS
Name : EOT Token (Verified)
Identifier : GdnNbe6E3txF63gv3rxhpfxytTJtG7ZYyHAvWWrrEbK5
Total supply : 100,000,000
EOT token (EOT) markets added on the Tidex Exchange https://tidex.com/exchange/eot/btc https://tidex.com/exchange/eot/waves
EOT Coin details (currently minable)
https://github.com/EmbeddedDownloads/EOTCoin
windows wallet[/b] https://github.com/EmbeddedDownloads/EOTCoin/releases/download/v1.0.0.1/EOTCoin-win.exe
windows Desktop wallet[/b] https://github.com/EmbeddedDownloads/EOT-Coin-Windows-Desktop-Wallet/releases/download/1.0/EOTCoinDesktopWallet1-0.zip
MAC Wallet [/b] https://github.com/EmbeddedDownloads/EOTCoin/releases/download/v1.0.0.1/EOTCOIN-Qt-OSX-v1001.dmg
WEB wallet [/b] http://eot.digital (Closing, please withdraw your coins)
ANDROID wallet [/b] https://github.com/EmbeddedDownloads/EOTAndroidWallet/releases
Block Explorer [/b] http://www.eot.digital:3622/
Block Explorer 2 [/b] http://www.eotcoin.info (created by [b]@Luanptit[/b])
[Block reward [/b] 100 Coins, [b] ALGORITHM [/b] SCRYPT, [b] BLOCK TIME [/b] 90 seconds
MINING POOLS
Official mining pool [/b] http://www.eot.digital:3001/ Getting Started [/b] minerd -a scrypt -o stratum+tcp://www.eot.digital:3256 -u WalletAddressWhereYouWantYourMiningCoins -p 1
unofficial Mining pools http://www.altminer.net
http://antminepool.com
http://coinminers.net/
http://www.vivocryptopool.com
[red]Currently EOT is traded on WAVES DEX, Crypto-Bridge DEX and TIDEX. Big exchanges will be available soon, exchanges are in comkmunication.
Opportunities are available with EOT - from Development, Mining, Trading as well as other business opportunities built around the EOT currency and the "Encryption of Things"
[size=34px]Bitvault on Yahoo Finance https://finance.yahoo.com/news/bitvault-worlds-first-blockchain-phone-201600279.html [/size] [center][img width=770]https://i.imgur.com/UMIlRoC.png[/img][/center]
[center][size=30px]Press release 4th October 2017 [/size] [size=30px]yahoo Finance https://finance.yahoo.com/news/bitvault-announces-london-launch-161000826.html?soc_src=community&soc_trk=tw [img]https://i.imgur.com/mBDZnN7.png[/img]
Some Helpful Information
[quote author=Story777 link=topic=2091616.msg21890405#msg21890405 date=1505551168]
You have been keeping a great secret.
I've been doing a bit of research with the technology behind this coin. It looks like ALOT of research has gone into this tech, since about 2004 and shortly after a patent for this P2P system was quickly issued.
Bitvault (https://swissbankinyourpocket.com/product/bitvault/) who are using the worlds first blockchain phone as a secure communication device and ultimately taking [font=Verdana][b]encryption[/b][/font] to the Internet Of Things (IoT) keeping our personal and business data secure. All this is done using [b]EOT coin [/b](Encryption of Things).
In todays world insecure devices are rampant. Here are a couple of links about the CIA being able to use insecure devices to 'cause accidents' http://www.sandiegouniontribune.com/news/cyber-life/sd-me-wikileaks-cia-20170307-story.html and https://www.washingtonpost.com/news/innovations/wp/2017/03/08/what-we-know-about-car-hacking-the-cia-and-those-wikileaks-claims/
It's scary to think a legal entity could posses such power over life. Just the mere fact alone the governing authority can request phone records (e.g. txt msgs, voice msgs or eavesdropping) proves most if not all telecommunication companies do not encrypt, otherwise whats the point on requesting the information!? (legal or not).
Commercially sensitive information needs to be protected and most importantly in my opinion our [font=Verdana][b]rights[/b][/font] and the privacy of all citizens of the human race need to be protected.
From my understanding BitVault is a platform for reference data. This would be data that is stored for compliance reasons such as e-mails, invoicing systems and check imaging (e.g. high quality imaging for x-rays, MRI scans etc) and a prototype was developed in 2004. This would means massive amount of data storage is required with fail-safe systems so a authorised user could access this information very very quickly.
Three goals were needed to be achieved: Low cost, high reliability/availability and simplicity. This is the birth of Bitvault via EOT.
Bitvault ultimately stores immutable objects with each new version being updated and identified with a 160-bit key.
System stability is very important and must be immune to failure sequences. Parallel repair via indexing is one of the many strengths Bitvault has been able to demonstrate.
BitVault is a back-end system that uses [u][b]Applications[/b][/u] to catalog object ID's. Using a catalog utility and indexing within an application prevented scalability bottlenecking under heavy loads.
Fast forward 3 years to 2007 a very important decision was to [u][b]decentralise[/b][/u] BitVaults system. This in my opinion is one of the fundamental principles of cryptocurrency - [u][b]No one entity or person has any control of the data stored and only the authorised user can access this info[/b][/u]. Ultimate Security and thus personal safety (see above articles CIA hacks). BitVault using applications have been able to use provable communication and data storage with ease of retrieval with vital security measures.
BitVault is not alone in researching solutions for security for the IoT, such as Venti and the like are making progress, however, BitVault is 'head and shoulders' above the few competitors and are already offering practical working solutions on the market with huge scalability that is cost effective.
Well Done BitVault, well done EOT your secret is out and let the world embrace.
author=Story777 link=topic=2091616.msg21462424#msg21462424 date=1504428317]
I have had a response in Slack and it has satisfied my questions. Thank-you.
For everyone information here it is:
The currency was created with 200 Million EOT total supply on 7 July 2017 [ we showed it to the community a London Fintech week with the demonstration of the BitVault - fintechweek.com ]
100 Million was pre-mined and another 100 Million are currently being mined, 1 block every 90 seconds @ 100 coins per block.
So the pre-mined coins were listed on waves as a token so that it can create a market for the coins while we are working to get listed on other exchanges.
The 100 Million coins listed were distributed in several ways. Firstly, this was not an ICO because our business is already funded via private capital. We wanted to get the currency distributed a widely as possible. So most of the initial coins were given away to a number of interested parties. We distributed this to our whole development team, business partners, employees as well as to the waves and other communities. So we did not sell all these coins for the current price, most of it was given away for free to people that have an interest in our products and business. The price now is formed by whoever owns these coins.
The tokens on the exchange is really a representation of the currency and as such has value because it can be interchanged, just like Bitcoin and Ethereum are on the waves exchange. This whole process is explained on page 4 of the waves whitepaper, I think they call it an asset-to-asset exchange which makes it possible to list any asset that exist on waves. Unfortunately waves only has gateways currently for Bitcoin, Ethereum, Waves, Euro and USD, so we have to develop our own gateway, which will be available on Nov 1.
So to clarify 100,000,000 tokens costing $190M were not sold. It is a combination of airdrops, private sales and sales on the exchange.
Some EOT coins are needed because: "A lot of EOT will be distributed through our devices. For example our encrypted routers are pre-loaded with EOT, so we need that stock and it will be distributed that way".
And with the response to tokens on the Waves Exchange "This is how Bitcoin works on waves: - They created 21 Million BTC Tokens.. When you deposit Bitcoin into waves account, you receive an equal amount of tokens which you can either trade or even sent via the waves blockchain to another user.. Once you withdraw your tokens are exchanged for BTC and you receive it back into your BTC wallet.. Exactly the same for USD or EUR - You don't send Euro's to another client on waves if you transfer - you send a token that represents EUR -- This works exactly the w0083".
These are the answers I was looking for and make a lot of sense now. This is indeed an exciting project. :)
It's time to trade....
Now I have one question left....
Is there anyone using NiceHash to mine this coin?? I keep being disconnected because of the difficulty being too low. Can any one help?
[quote author=Shews link=topic=2091616.msg22876983#msg22876983 date=1507755312] EOT (coin) is now tradable on the CryptoBridge Decentralised Exchange, you can sign up below.
Please note this is for the EOT COIN ONLY, do not send tokens to this dex. This is a secure means to trade with the backend being on a blockchain. It is still in beta stage but has been working flawlessly so far. If you'd like more info I will post their website link is below.
https://wallet.crypto-bridge.org/?r=388691
You can sign up with a local wallet mode, meaning you are the only one with access to your keys, this is most secure. There is also the option to sign up with and account if you require access to you funds on the go.
More info:
https://crypto-bridge.org/
submitted by johningreece to crypto_currency [link] [comments]

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