Bitcoin is still early

[East coast]

Isn't spending Bitcoin a taxable event?

If I buy BTC at a price of 20k, it rises to 40k, and then I use 0.0001 BTC to buy a cup of coffee, I think I have to pay taxes on the gains of that 0.0001 BTC.

That's currently what would prevent me from using crypto in day-to-day situations.

Haha, that’s actually a really good point and I’m disappointed I hadn’t given thought to that aspect earlier. I reiterate the comment I made 2 pages back. It’s not practical, it’s not non correlated (or at a minimum won’t be going forward) and it’s not a hedge against inflation. Doesn’t mean it’s going to disappear or anything. At the end of the day anything where there is vol and professional traders can make money/gatekeepers to the financial system can make money = job security for me personally, so I hope it does stick around, but what a mess.

[NapoleanDynamite]

Isn't spending Bitcoin a taxable event?

If I buy BTC at a price of 20k, it rises to 40k, and then I use 0.0001 BTC to buy a cup of coffee, I think I have to pay taxes on the gains of that 0.0001 BTC.

That's currently what would prevent me from using crypto in day-to-day situations.

Right now, yes it is a taxable event.
4 things to keep in mind with this:

1. There is currently a bill in the Senate that would allow for any purchases/transfers of $200 or less in cryptocurrency and they would not be taxable events.
2. If Congress doesn't clear this picture up over the next 1-3 years then it will eventually be decided by the supreme court or the IRS will change their definition to meet the definition of a currency. The more countries that adopt BTC as legal tender, the less taxable it becomes as property (as it is currently).
3. Even if you were to use it right now and make some small purchases as I have just to play with it (think 20 bucks or less), the IRS is very unlikely to have the time, the know how, or the care to come after a few bucks right now. They just don't care right now. By the time it gets problematic for them, it will likely be too late to stop it.
4. If you are US based, then there is little/no reason to use BTC right now to make purchases. However, Apple products are world wide. And if/when Apple adopts it, Google and others won't be far behind. Outside of US this is a big thing.

[NapoleanDynamite]

Haha, that’s actually a really good point and I’m disappointed I hadn’t given thought to that aspect earlier. I reiterate the comment I made 2 pages back. It’s not practical, it’s not non correlated (or at a minimum won’t be going forward) and it’s not a hedge against inflation. Doesn’t mean it’s going to disappear or anything. At the end of the day anything where there is vol and professional traders can make money/gatekeepers to the financial system can make money = job security for me personally, so I hope it does stick around, but what a mess.

Good luck ma'am/sir. You should probably do some studying though before making statements like this.

[billy]

4. If you are US based, then there is little/no reason to use BTC right now to make purchases. However, Apple products are world wide. And if/when Apple adopts it, Google and others won't be far behind. Outside of US this is a big thing.

Or you can just pay with a credit card that doesn't charge foreign transaction fees... I fail to see how bitcoin would be a better choice for me to buy apple (or other) products made worldwide, or to use as tender when traveling. I'm pretty sure most of us WCI are US based.

[SpacemanSpiff12]

Haha, that’s actually a really good point and I’m disappointed I hadn’t given thought to that aspect earlier. I reiterate the comment I made 2 pages back. It’s not practical, it’s not non correlated (or at a minimum won’t be going forward) and it’s not a hedge against inflation. Doesn’t mean it’s going to disappear or anything. At the end of the day anything where there is vol and professional traders can make money/gatekeepers to the financial system can make money = job security for me personally, so I hope it does stick around, but what a mess.

I think it's just early. Crypto currently seems to behave like a risk-on asset... but there are fine reasons to believe it could become a hedge against inflation. I think it's practical - right now I can easily send $1 or $100,000 via BTC in 15 seconds if I wanted. Have you tried buying some crypto or creating a wallet? It's pretty easy.

There are barriers to using crypto for small everyday purchases right now, but as NapoleanDynamite describes, I think those are solvable problems. Bitcoin just hasn't become fully functional as a medium of exchange (or unit of account).

But I think it's become a store of value (albeit one that's highly volatile). Just read reports from Ukranians who were able to flee the country with only a suitcase... and their entire net worth held in a thumb drive, because they kept funds in BTC or ETH.

[billy]

But I think it's become a store of value (albeit one that's highly volatile). Just read reports from Ukranians who were able to flee the country with only a suitcase... and their entire net worth held in a thumb drive, because they kept funds in BTC or ETH.

Do you think people in the US will need to carry their entire net worth in cash if they dont have access to bitcoin? No, we use credit cards and our money is stored online with banks. And if I lose my credit or debit card, I don't lose my entire net worth unlike if I lose my thumbdrive.

[jacoavlu]

Do you think people in the US will need to carry their entire net worth in cash if they dont have access to bitcoin? No, we use credit cards and our money is stored online with banks. And if I lose my credit or debit card, I don't lose my entire net worth unlike if I lose my thumbdrive.

that works until it doesn’t, such as a canadian trucker who participates in a protest that the gov doesn’t approve of and freezes your assets held by a trusted third party

[billy]

that works until it doesn’t, such as a canadian trucker who participates in a protest that the gov doesn’t approve of and freezes your assets held by a trusted third party

Im talking re: US citizens. Yes you can have accounts frozen for illegal things, but for a protest? seems extreme. Anyway, in that scenario, cash is actually still king and I would think be more useful than bitcoin.

[SpacemanSpiff12]

Do you think people in the US will need to carry their entire net worth in cash if they dont have access to bitcoin? No, we use credit cards and our money is stored online with banks. And if I lose my credit or debit card, I don't lose my entire net worth unlike if I lose my thumbdrive.

Of course not.

But you could, if you wanted to.

And more importantly, you and I have the luxury of living in a country where we don’t have to even consider this possibility.

(Also, if we’re splitting hairs, the physical thumb drive isn’t even necessary. If you can memorize a 12 word seed phrase you can transport your net worth anywhere in the world without needing a physical device.)

[jacoavlu]

Im talking re: US citizens. Yes you can have accounts frozen for illegal things, but for a protest? seems extreme. Anyway, in that scenario, cash is actually still king and I would think be more useful than bitcoin.

seems extreme eh who would have thought?

go ahead and try carrying your net worth in cash around.

[billy]

seems extreme eh who would have thought?

go ahead and try carrying your net worth in cash around.

in the US, you wouldn't need to carry your whole net worth in cash (or bitcoin) unless you did something illegal. Enough cash for a month to clear your name/ unfreeze your assets/get credit sure. But if our government is seizing all your assets, bitcoin wont help you either unless you are fleeing the US and never plan to return.

I'm specifically referring to US citizens, not people of venezuala, ukraine, china, etc.

[SpacemanSpiff12]

Im talking re: US citizens. Yes you can have accounts frozen for illegal things, but for a protest? seems extreme. Anyway, in that scenario, cash is actually still king and I would think be more useful than bitcoin.

https://www.nytimes.com/2022/02/22/world/americas/canada-protest-finances.html?referringSource=articleShare

Can you think of a country more similar to the US than Canada? This happened.

I don’t personally support the convoy or their tactics, but the fact that people’s personal bank accounts were frozen due to support of this protest is wild.

[billy]

https://www.nytimes.com/2022/02/22/w...e=articleShare

Can you think of a country more similar to the US than Canada? This happened.

I don’t personally support the convoy or their tactics, but the fact that people’s personal bank accounts were frozen due to support of this protest is wild.

IAnd applied to cryptocurrency assets- https://www.deseret.com/2022/2/25/22...-of-wrongthink "This measure applied not only to regular banking accounts, but also cryptocurrency accounts."

Also it only lasted 2-3 days. And very unlikely to happen in the US for protests- the ACLU would have a field day with it if the government did it to us for non illegal activity. I agree that it was a wild overreach by the canadian government

[jacoavlu]

important is who gets to define illegal

the point is bitcoin is value that you can actually own and cannot be confiscated if you take self custody. There is nothing else that exists that is the same

[G]

So bought a little GBTC last year (I know, I know, it's not BTC). But, I'm looking at my Vanguard brokerage statement and I have a squillion trades listed on my transaction history (which I didn't trade). I didn't even notice it, but just got a call from my accountant asking what that is all about. Any ideas from the forum before I go to Dr Google?