Hell Yes, I Bitcoin

[Foxx]

Crypto Primer

Read time: 8 minutes 5 seconds

 

 

It will be hard to keep this brief because there are so many different aspects and tangents that are relatable to each one that one wouldn't want to leave something out for fear of not giving a complete picture. I shall try to keep it on topic, be cogent, and hit the high points while not meandering off into the weeds too much. No guarantees, though.

 

First and foremost, at this time, because of the volatility, crypto should only be considered as speculative vehicles.

 

In the fiat world, we take many of the aspects that it contains for granted because we have been conditioned basically from birth to be enmeshed in its various trappings. There are equally as many facets in the crypto world, but essentially being a digital platform, these may seem like a foreign entity until it becomes second nature. The many different aspects carry their own concerns, each important in their own right.

 

Aspects

• Entry/Exit points
• Coins/Tokens 
• Wallets
• Blockchains
• Taxation

 

Entry/Exit Points:

What is an entry/exit point? This is where you put fiat into and convert crypto back into government-sanctioned reserves.

 

In most instances, you will need to put fiat into the cryptoverse to obtain crypto. Though this is ever-changing (as more and more retailers are accepting crypto payments), to 'realize' your crypto holdings, you will probably have to convert it to fiat once again. Entry and exit points.

 

There are new entry/exit points coming online every day, it seems (they need to gain SEC and individual State approval, depending on the state), such as Crypto.com. And I'm sure there will be many, many more as time goes by. There are also many established ones such as Coinbase (perhaps the most popular), Kraken, Gemini, and many others. Google is your friend.

 

Paypal is offering crypto, but last I knew, they do not allow an off-ramp (taking your crypto off their platform). So I'm not sure what good they are other than to be utilized for speculation purposes.

 

As GUS (government US) has caught up to most things crypto, getting verified on any of these platforms will entail KYC and AML submissions. Depending upon your interest and involvement, there are different levels of information you will be required to submit. In addition to those levels, restrictions on what you can and can't do upon those respective levels.

 

Lastly, while I do not advocate anything that does not comply with the law, there are other 'exit points' where you work on a peer-to-peer basis.

 

I am of the opinion that, of all the various aspects, outside of being able to pay directly with crypto, it is these on/off ramps that are the weakness of the whole system: albeit an unavoidable one at this point in time.

 

 

Coins/Tokens:

What is a Coin/Token? They are digital assets that can only exist on a digital platform because of their decentralized nature.

 

What do I want, a coin or a token? The short answer is that it depends on what you are looking to do. At their essence, a coin exists on its own blockchain (Bitcoin, Ethereum, Litecoin, etc., a token does not have its own blockchain and is built upon others blockchains. Ethereum, because of its smart contract capability, is perhaps the most popular blockchain for tokens. Vitalik Buterin is one smart muther &#%$er. He had the vision.

 

A coin equates to money, and a token is representative of a product or application. In general, you are going to need coin to purchase token. Tokens can be viewed as investment vehicles or what might be termed as stocks in a company. Depending upon their nature, Tokens can also hold other capabilities, such as being used as a coin on its own network.

 

ICO (initial coin offering) is the new IPO. There may come a time when you want to participate in an ICO. Again, there will be certain KYC and AML restrictions that may/may not prevent/allow you to do so. 

 

 

Wallets:

What is a wallet? A wallet is nothing more than entry upon a blockchain that holds digital information. Every wallet has two keys, a 'public key' and a 'private key.'The public key is the location of said 'wallet' on the blockchain. The public key is also known as its 'address.' This 'public key' is what you are giving out to interact with other wallets, i.e., sending and receiving crypto. The private key is the information you enter to access the wallet, which allows you to interact with the contents therein. These private keys are usually quite long to make it hard to be hacked by running brute force attacks. You want to keep your private keys private, safe and secure.

 

This is important. I can't stress this in strong enough terms - If you don't have the private key to a wallet, you don't truly own the contents. Custodial services abound, and they do not give you private keys to any wallet's contents.

 

In the short history of crypto, there have been several cases where custodial wallet contents were stolen either by the platform's owners or hackers. Be careful when utilizing a custodial service.

 

To give you some idea of what I am talking about, perhaps the most iconic was the hacking of Mt.Gox. Over 840K BTC was stolen. BTC was worth roughly $550 each in February '14, making the haul at the time in the vicinity of $460 mm. At BTC's all-time high ($65K), those same 840K BTC would be worth... 56.6 billion dollars. So, I trust you can see the incentive for hackers. Bitfinex and Wex are two other custodial platforms that crypto was hacked/stolen.

 

In addition to the above, we also see where just last week, Canada wanted custodians to deny access by specific users to wallets and their contents. Again, be wary of custodial services.

 

All that said, custodial wallets are fine for what they are intended. My only recommendation is that you do not leave more in them than you are willing to lose. 

 

Take your holdings to a wallet that you have the keys for. Transfer in and out as needed. Regarding this aspect, though, I would recommend you develop 'clean' practices to minimize your risk exposure. As you probably know, hackers are everywhere, and they are even more prevalent and persistent in crypto.

 

Clean practices include but are not limited to, not using a computer that doesn't have a good antivirus program, not using a computer that visits dodgy content (i.e., porn and the like). Contracting key loggers, spyware, and other nefarious entities can affect your overall experience.

 

Another critical warning here: You can not send crypto to any address. You risk losing your asset if you send it to the wrong blockchain. Make sure you are sending/receiving it to the relevant blockchain. Bitcoin to a BTC address, Ethereum to an Ether address, Litecoin to an LTC address, Tokens to their respective blockchains, etc...

 

Specific types of wallets include paper, browser, software, and hardware ones. Paper wallets used to be considered the most secure because they are not connected to the internet and are generally used for cold storage (long term). However, there are now other cold storage methods considered the gold standard of cold storage today. Again, Google is your friend here. It is said that hardware wallets are the second most secure.

 

Hardware wallets include KeepKey, Ledger, and the dominant, Trezor. I know many people who have preferences for each, but, in my opinion, they are all generally pretty much as safe as the other. These wallets will most likely hold any crypto asset. However, please do not assume that they will. Make sure that your wallet supports the crypto you want to send to it before you hit that send button. 

 

Browser wallets include MEW (My Ether Wallet (the original Ethereum wallet), My Crypto, Metamask, Brave (which is actually part of the Brave browser), amongst a plethora of others. 

 

Software wallets include Exodus, Atomic, and others.

 

You could always run a BTC core wallet and help the network by having a record of every single transaction ever made on your computer. If you have a high-speed computer, it would probably take a week to download the entire BTC blockchain and catch up to current blocks. If you have a reasonably usable computer, it may take you two weeks of running it 24/7 to catch up.

 

I have probably used every specific wallet I have mentioned, and they all work fine. Which one(s) you will ultimately utilize will be a matter of your preferences and desired usage.

 

 

Blockchains:

What is a blockchain? A blockchain is a decentralized digital ledger that is a historical record of every transaction ever made. It is because they are decentralized and scrutable by anyone on the network that it is said they are an immutable, anti-fragile ledger and therefore the safest method of record-keeping there is.

 

When a transaction is submitted for validation, it goes out into what is known as a pool. This pool is where transactions await being picked up to be processed by 'miners' or 'stakeholders' (dependent upon what type of algorithm that blockchain operates upon, PoS or PoW) who process the transaction(s). There is a process for this where many potential transactions are batched into a 'block.' These blocks are often processed at regular intervals, dependent upon several factors. 

 

Once a miner/stakeholder has processed a block, it is submitted to the network for confirmation by 'nodes' (who also are the ones to initially broadcast the transaction(s) to be processed). This 'confirmation' involves checking that the rules of the network were followed. Depending upon the rules of the respective blockchain, there are a number of confirmations required before the transaction will be officially approved and recorded to the blockchain. Different standards apply, but generally, BTC requires six confirmations, while Ethereum requires 35.

 

 

Taxation:

No need to define what taxation is. It is one of the two certainties in this life. The other, well, when you meet that one, the IRS won't matter anymore.

 

Every individual's circumstance is unique and particular to them, so there is no one size fits all advice to be given here. I recommend consulting with a CPA knowledgeable about crypto and your specific circumstance to determine what they think is in your best interests.

 

What follows is just a generalization and is not intended to take the place of a financial professional's advice knowledgeable of your particular circumstance. Please do your due diligence.

 

The IRS rules and regulations have evolved this last decade. With those rules seemingly changing yearly. There was a time when you could trade crypto for crypto, and it would be considered much along the lines of the real estate 'like for like' transactions. Of which capital gains/losses were not incurred. You only had to worry about capital gains/losses when you off ramped. Those days, however, are long gone.

 

Today, anytime you do anything with crypto, you have to record and ultimately report it. This includes anything from simply moving an asset to another wallet to realizing a capital gain or loss. As anyone who has been in this world for any amount of time knows and who tries to do things by the book can tell you, it can be daunting. There are, however, crypto trackers out there that will make the recording of 'events' more manageable for you. If you are like me, though, and prefer to do your record keeping, recording these 'events' as they happen, will be the key to good record keeping and reporting practices. 

 

 

I believe this is about it. I am pretty sure I may have forgotten a thing or two, but I can't think of what it may be at the moment. If there is any aspect I have not covered or anything I have attempted to explain that is murky, or you have questions, please feel free to ask for clarification on any point or question you may have. If preferred, you can also PM.

 

I hope you find this little primer helpful, and if you do onboard and find that it was helpful, you can drop a bit of ETH in the tip jar. 0x2942bf9Ce0592e9E05d89AcEA935326834862102

 

 

[Foxx]

 

[Foxx]

this is a big deal.

 

After 5 years, Paypal becomes the first company to ever receive a BitLicense from NYS.

The new service makes PayPal one of the largest U.S. companies to provide consumers access to cryptocurrencies, which could help bitcoin and rival cryptocurrencies gain wider adoption as viable payment methods.

 

The San Jose, California-based company hopes the service will encourage global use of virtual coins and prepare its network for new digital currencies that central banks and companies may develop, President and Chief Executive Dan Schulman said in an interview.

 

“We are working with central banks and thinking of all forms of digital currencies and how PayPal can play a role,” he said.

 

U.S. account holders will be able to buy, sell and hold cryptocurrencies in their PayPal wallets over the coming weeks, the company said. PayPal plans to expand the service to its peer-to-peer payment app Venmo and some other countries in the first half of 2021. ...

 

... PayPal has secured the first conditional cryptocurrency licence from the New York State Department of Financial Services. The company will initially allow purchases of bitcoin and other cryptocurrencies called ethereum ETH=BTSP, bitcoin cash BCH=BTSP and litecoin LTC=BTSP, it said.

 

PayPal is teaming up with cryptocurrency firm Paxos Trust Company to offer the service.

 

 

it is planned that while you will be able to purchase select cryptos in just a few short weeks, you will not be able to spend them until early on in the new year.

 

and though this will more than likely change in the new year (it has to), for now it is not the best thing.

 

onboarding just got that much easier for 346 million people around the world.

[Sig1Hunter]

Geez it was like at 5k when covid hit. It’s now over 13k. I knew i shouldn’t have listened to my dad..i coulda been a thousandaire or something 

[Foxx]

FYI... BTC is approaching it's ATH. been on a tear since just before the election.

[mead107]

Meadcoin is a lot better 🤣

 

have not bought in on bitcoin 

[LeviF91]

“Buy Bitcoin” say the folks who stand to benefit from me buying Bitcoin. 
 

I own some. But it’s not an investment vehicle any more than forex trading is, IMO.  

[Foxx]

BTC's previous ATH was smashed to pieces today. we currently are sitting at, $21,340. the heights of this rise, you are going to see, you are not going to believe it possible.

 

[mead107]

You can still buy a meadcoin for $500

[Foxx]

Happy Birthday Bitcoin!

 

Historic prices on Jan 3rd

 

2009 - $0

2010 - $0.05

2011 - $0.29

2012 - $5

2013 - $13

2014 - $797

2015 - $302

2016 - $429

2017 - $1,021

2018 - $14,944

2019 - $3,827

2020 - $7,238

2021 - $34,200

[KD in CA]

^ I guess I missed the buying opportunity!   Crazy the change in the past few days.

[Foxx]

59 minutes ago, KD in CA said:

^ I guess I missed the buying opportunity!   Crazy the change in the past few days.

not for nothing KD, but I see no reason why the 4 year cycle that BTC has had since being born will not continue. this means that January '22 would complete this current cycle.

[plenzmd1]

On 1/3/2021 at 5:32 PM, Foxx said:

not for nothing KD, but I see no reason why the 4 year cycle that BTC has had since being born will not continue. this means that January '22 would complete this current cycle.

ro everyone here, and he will get pissed i say this..  @Foxx was early in this thing. We were discussing BTC ATOP in late 17, early18. He called this back then...knows more than anyone I know about this stuff.

[KD in CA]

On 1/7/2021 at 5:08 AM, plenzmd1 said:

ro everyone here, and he will get pissed i say this..  @Foxx was early in this thing. We were discussing BTC ATOP in late 17, early18. He called this back then...knows more than anyone I know about this stuff.

 

No doubt about that!  

[Foxx]

On 1/7/2021 at 8:08 AM, plenzmd1 said:

ro everyone here, and he will get pissed i say this..  @Foxx was early in this thing. We were discussing BTC ATOP in late 17, early18. He called this back then...knows more than anyone I know about this stuff.

Thank you for the kind words Plenz.

 

Back when I started that thread ATOP, I think the price per BTC was right around 1K. Back before that, on the BBmB, when I started the thread there, they were $600 per. In '16 maybe? Don't know that I am all that smart though. If I was, I might not have given away the hundreds of them that I did back in '12 when I bought 'em for $5 a piece.

 

Today, we broke the $40k mark. It is simply astounding to me that before this next wave started back just before the presidential election we were hovering just under $15K.

 

Please don't anyone consider my musings financial advice, I'm really just some stupid keyboard jockey. After all, I was pretty sure my analysis said that we needed to revisit three figures before this next bubble could begin. Which we never really came close to doing though. That being said, again not financial advice, please do your own homework and analysis, as I posted above, I really see no reason why the 4 year cycle that has been in place since BTC's inception will not hold. And that this current bubble/run will last into 2022.

 

The heights this run is going to reach are going to be unbelievable.

 

 

[devnull]

Anyone bought Dogecoin?

 

 

 

 

https://www.cnbc.com/2021/01/29/dogecoin-cryptocurrency-rises-over-400percent-after-reddit-group-talks-it-up.html

[CarpetCrawler]

On 10/21/2020 at 4:35 PM, Foxx said:

the price of BTC is soaring today as news of Paypal's new service makes headlines around the globe. this is more of the long awaited news regarding institutional money flowing into the crypto sphere.

 

 

https://twitter.com/PayPal/status/1318930492381523971

 

 

https://twitter.com/TheCryptoLark/status/1318993243674152962

 

 

 

I wish I had listened to you way back when.

[Foxx]

8 minutes ago, CarpetCrawler said:

 

I wish I had listened to you way back when.

It is not too late, my friend. You don't have to buy a whole BTC just ladder in by buying some Satoshi.  Additionally, there are alts out there, just make sure and do your due diligence.

 

Just remember, unless you control the keys to the wallet where they will ultimately reside, they are held in custodial hands.

[Foxx]

21 hours ago, devnull said:

Anyone bought Dogecoin?

 

 

 

 

https://www.cnbc.com/2021/01/29/dogecoin-cryptocurrency-rises-over-400percent-after-reddit-group-talks-it-up.html

The funny thing about this is that it was created with BTC's source code and originally was a joke made to mock crypto speculators.

 

At one point back in 2017, I had mined over 120K of these.

[CarpetCrawler]

4 hours ago, Foxx said:

The funny thing about this is that it was created with BTC's source code and originally was a joke made to mock crypto speculators.

 

At one point back in 2017, I had mined over 120K of these.

 

Please explain "mining".