I'm seeing in a lot of post people hating Exchanges.
From my point of view, they are offering a service and getting a cut for doing so. Sounds to me like every other single business in this planet.
The problem is with people if they keep in the exchange what they bought. Like if I'm buying a burrito at Chipotle, I leave it there, and then I'm surprised or mad because they don't have it 3 days laterπ
Ohh, that a corporation is doing shady stuff, buying politicians and the owners are trying to profit for their own benefit? Welcome to planet earth.
You don't need centralized exchanges. Buy peer to peer.
My question on the peer to peer is: Are you doing the contrary process of money loundry?
I mean, are you getting clean money after you pay taxes for your work and transforming it in black money?
I don't think things are that easy as just claiming strong principles. At the end of the day you need to live in society under the eye of the IRS or their equivalent in other countries
I think you don't really get bitcoin yet.
Good money is fungible, i.e. there is non clean or dirty money, that is a fiat concept.
What does trading bitcoin peer to peer have to do with the IRS?
Don't go the route you are smart and I dumb. We are all learning and Bitcoin is an evolving animal. Let's learn all together.
Right now, like it or not, legally Bitcoin is property and acts like that to the eyes of the IRS. For people who has all their wealth in BTC at this time, in case of a medical emergency, or a big down payment for example they might need to sell a big amount of BTC and like it or not, that's a taxable event. Without a trace or purchasing the IRS will considered you aquired your BTC at $0 and you would need to pay around 20% of the full amount of the sell. Do you ever thought about that?
Never called you dumb, just said youn didn't fully understand bitcoin, nothing to be ashamed at. Everyone starts there.
The point of bitcoin is to separate money and state.
When you opt-in bitcoin, you opt-out of fiat. You are choosing the money you want to use while forfeiting money you are forced to use. That money comes with its own rules, different from the rules of the state.
If you are ok with paying taxes for just holding money, be my guest. Free sovereign individuals do not comply nor fear violent bullies.
You can also sell your sats p2p in which case you just get money from randos. The IRS does not have the resources to track that unless you sell a big amount at once.
I have to push back and say that you are the one who don't understand. Those are very pretty words, and sure, an energy based monetary system it's a requirement of any modern society.
The thing is that we are not there, like it or not, we are living in today. Maybe you are trading a few bucks for Bitcoin and feel very good with yourself, but let's be honest, if you have to purchase $100,000 of Bitcoin, will you go the Peer to Peer route?
Why would I purchase 100k of bitcoin?
Stacking sats means accumulating gradually as you go. Not trading your entire net worth at once.
Nothing of what I said has anything to do with the world yesterday, today or tomorrow. Nor with some sort of utopia.
You can buy and sell bitcoin right now peer to peer. Many bitcoiners do it every day without issue. It's not hypothetical, it's real.
You were taking about the separation of Money and State, that's a must, but is not here yet.
I think it's important for everyone to understand what are the legal implications of selling $100K of Bitcoin in case you need to do a down payment for a house for example. And in that case would you do it peer to peer? It's even possible buy or sell 100k or more peer to peer or even a smart decision?
beyond the paper bitcoin topic, assuming you're wise enough to self-custody, the major concern is your loss of privacy through the kyc/aml process.
here's a good write-up on why "no kyc" is the optimal approach: https://bitcoiner.guide/nokyconly/
you could coinjoin following your kyc-exchange purchase, in an attempt to regain some forward privacy... id argue that not having your personal financial details in a centralized database is the best play. those details can and will be leaked given enough time.
you're still welcome to report any taxable events as you wish.
Thanks for your answer. The tax situation it's the least commented topic in the space. You can report the taxable event, but you will need to prove the purchase price, and if you can't, for my understanding it will be 0. So you will have to pay around a 20% of the full amount you sold? And not on the capital gain.
I'm not expert in this area, but I believe clarity is needed
it's a trust-based system where you need to maintain proper accounting records.
record your buy quantity and fiat amount, along with any sell quantity and fiat amount, and be sure to keep track of any fees separately. all timestamped.
most people use the first in, first out (FIFO) method when processing the data.
hire a professional tax adviser if you're worried about being flagged for audit.
Π²ΠΎΡ ΠΏΠΎΡΡΠΎΠΉ ΠΏΡΠΈΡΠΈΠ½Π΅ Π²ΡΠ΅ Π±ΠΈΡΠΆΠΈ Π±ΡΠ΄ΡΡ ΠΈΡΠΏΠΎΠ»ΡΠ·ΠΎΠ²Π°ΡΡ Π²ΡΠ΅ΠΌΡ Π² ΠΊΠ°ΡΠ΅ΡΡΠ²Π΅ Π΄ΠΎΠΊΠΎΠ·Π°ΡΠ΅Π»ΡΡΡΠ²Π° Π²Π»Π°Π΄Π΅Π½ΠΈΡ. ΠΊΠ°ΠΆΠ΄ΡΠΉ ΠΊΡΠΎ ΠΊΠΈΠΏΡΠ» ΠΏΡΠΎΠ΄Π°Π», Π΄ΠΎΠ»ΠΆΠ΅Π½ Π² 24 ΡΠ°ΡΠ° Π²ΡΠ²Π΅ΡΡΠΈ ΡΡΠ΅Π΄ΡΡΠ²Π°... ΡΡΠΎ ΠΎΠ΄Π½ΠΎΠ²ΡΠ΅ΠΌΠ΅Π½Π½ΠΎ ΠΈ ΡΠΏΠ°ΡΡΡ Π±ΠΈΡΠΆΠΈ ΠΈ ΡΠ°Π·ΡΡΡΠΈΡ ΠΈΡ Π΄ΠΎ ΠΎΡΠ½ΠΎΠ²Π°Π½ΠΈΡ...
Maybe you haven't heard.
FTX and other Bitcoin exchanges created their own shitcoin tokens. They operated them as Ponzi schemes and used them as collateral for loans that they used to speculate with leverage and using user funds.
They stole and lost billions of their depositor's investment dollars.
They preyed on new users who didn't understand anything about crypto. Their marketing focused on misleading the public about Bitcoin, while at the same time lying about how their Ponzi scheme was superior.
Lessons to learn:
I heard something about that, yes Lol
But that is like you are saying that there is shoes company that uses child labor in kind of slavery conditions, so I shouldn't buy shoes again from any shoes company. And my only options are making my own shoes or go barefoot?
I think in our case it would be fair enough to use bitcoin-only exchanges and services. For instance I'm still using the Ledger nano s, that I bought when I first heard about cold storage, but today I cringe every time I use their shitcoinful app. The only reason I'm not changing it is convenience - it works OK. But my next hardware key will most definitely NOT be a Ledger.
Coldcard is Bitcoin only.