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Here's a dilemma about the extremely bullish Bitcoin market: I would be happy to get paid in Bitcoins, but do people want to pay in Bitcoins? Everyone I've hear
by ckocagil 9y ago
Here's a dilemma about the extremely bullish Bitcoin market: I would be happy to get paid in Bitcoins, but do people want to pay in Bitcoins? Everyone I've heard wants to hoard them ("hodl").
I only remember buying a single item with Bitcoins and that was because the online store had difficulty with my credit card.
- Frogolocalypse 9y agoI have a bitcoin debit card. I use it every other day. I call it my magic internet beer money card.
- p33p 9y agoLegitimately curious how a bitcoin debit card works
- Frogolocalypse 9y agoPut x$ in bitcoin on card exchange. Put y$ in card account. Use card from y$. 15 minutes or so later, y$ account is topped up from x$ account. Txn never touches the chain. Sure it's a risk having a bit of money on an exchange, but that is the price of convenience. When the amount on exchange is too high, i shift to my bitcoin wallet.
- dmoy 9y agoDoes this complicate filing your taxes?
- Frogolocalypse 9y agoNope. As long as the money i spend on the card is less than the money i place on it i only have unrealised capital gains. If and when i want to spend more than that, i will have to pay capital gains on that component. It's no different than a high interest savings account. That's what bitcoin is; A decentralized banking account. Except you are your own bank.
- dmoy 9y agoI thought what you meant by it reloading USD from btc would mean a sale of btc (which is taxable event?), no?
- Frogolocalypse 9y agoThe event doesn't lead to a capital gain.
- dmoy 9y agoOk my knowledge of tax is shaky at best, but this is confusing. Timeline: day 1: you buy bitcoin (or mine it and take tax as gross income), bitcoin is valued at $1k USD / bitcoin, you bought 1 bitcoin day 10: you use the $100 in your debit card to buy many beers, bitcoin is valued at $1.1k USD / bitcoin day 10 +15 minutes: something sells some of your bitcoin to replenish $100 in your debit card You now have 10/11th of a bitcoin, valued at $1000 USD, plus $100 of taxable gain for which you probably need to pay the IRS like $15 or something. Or what's wrong in my timeline there?
- Frogolocalypse 9y agoI would suggest contacting a tax-accountant in your jurisdiction if you are unclear of your obligations. Every place will have different requirements.
- dmoy 9y agoK I'll ask my CPA in a bit
- dmoy 9y agoOk yo, at least for US jurisdiction you would need to report those individual bitcoin sales as taxable cap gains events (either loss or gain depending on the cost basis). Does whatever exchange you're using make calculating cost basis easy? Like do they send you an 8949 or all the details easy to fill out? Otherwise that sounds like a huge pain to get everything straight for every purchase (even if it's just daily sales). If the exchange makes it easy it might not be that bad. My 8949 / sched D already got like dozen+ entries on it, what's a few dozen more? lol. But if the exchange doesn't provide easy cost basis and makes you calc it on your own, ugghh no thanks. They also went into some detail about wash sales, which is going over my head. But yea this sounds like it would vastly complicate your tax preparation. Unless you just don't report it and cross your fingers that you don't get audited I guess? Of course, this is now 3rd hand from a CPA, and only applies for US federal taxes.
- emodendroket 9y agoWhy is this preferable to using a credit card? The only "advantage" I ever see people mention is "no chargebacks," but that's not in my interest, as a buyer.
- Frogolocalypse 9y ago> Why is this preferable to using a credit card? My money isn't being debased while I hold it. Quite the opposite.
- emodendroket 9y agoIn that case the credit card is even better, because your debt is being "debased" until you get a bill.
- Frogolocalypse 9y agoI prefer to control my expenses thanks. Going into debt to pay for my consumption is not how I like to manage risk.
- emodendroket 9y agoAnybody sensible who is making a software engineer's salary pays off credit cards in full at the end of each month, which is only "going into debt" in the most technical sense and incurs no interest charges.
- Frogolocalypse 9y agoYou are, of course, always free to exercise whatever risk profile suits your requirements. I don't like that system thanks. If it works for you, who am I to criticize?
- emodendroket 9y agoWhat exactly is the "risk"? That I won't have the exact same money I would spend now in two weeks?
- solotronics 9y agoit's a visa card that you send BTC to your account and when you spend they remove the amount of BTC at the current exchange rate
- djellybeans 9y agoOne thing I've heard from people is that they would buy something with bitcoin, then exchange traditional money to replace the bitcoin they spent.
- Frogolocalypse 9y agoYep. Every two weeks when i get paid i put aside my spending money for the next two weeks by transferring to my bitcoin debit card. Then i use that card. The thing is, it is increasing in value faster than my pretty average spending requirements. Holding the money in my spending wallet in bitcoin just means it increases in value rather than being debased.
- stale2002 9y agoWell, companies can just convert instantly to Bitcoin on transaction. They can hold with their other money.
- JepZ 9y agoWe all want to get rich by hoarding money. The only difference is, that the value of bitcoins compared to classical currencies is currently increasing. And because the monthly increase is so high, so many want to join the game. As soon as everybody has some bitcoins the bitcoin value increase should slow down. At that point there would be no point in hoarding bitcoin more than any other currency.
- Frogolocalypse 9y ago> At that point there would be no point in hoarding bitcoin more than any other currency. Oh yes there is. Bitcoin is deflationary, so your money isn't debased while you hold it. I don't ever intend to exchange my bitcoin for any other currency unless I'm purchasing something.
- UncleMeat 9y agoWhy not just hold bonds?
- Frogolocalypse 9y agoMy banking account can never be seized by a govenment, and I can liquidate them whenever I choose, wherever I choose. Indeed, I can buy a beer with my bitcoin at any time of my choosing.
- bduerst 9y agoThat's not really a threat vector that most people worry about.
- Frogolocalypse 9y agoMost people don't understand or appreciate risk, no.
- 9y ago
- ryan-c 9y agoI've been taking a portion of my paycheck in Bitcoin (via bitwage) explicitly intended as spending money for a while. I buy things regularly with it. The payment flow using a mobile wallet is pretty great.
- amarpatel 9y agoGenuinely interested in your perspective: In January '17, 1BTC was $800 and it's currently >$10,000. How can you justify spending X BTC on a good or service as you've now paid ~10x the original asking price?
- nrhk 9y agoIf you save some of the wages you get in bitcoin from 800 - 10k I'm sure you'll be pretty happy, not like the fiat increased in value.
- ryan-c 9y agoThe same way I justify not having spent every cent I could spare buying BTC over the last eight years. I mined hundreds of BTC in 2011 to 2012, and sold pretty much everything as I went. If I'd saved it all, I'd have "fuck you money" right now, but at the time even $100/BTC seemed like a moonshot. I'm not going to beat myself up over not having prescient knowledge of BTC or any other thing I could have invested in.
- empath75 9y agoWould you still be happy to be paid in bitcoins in an environment where people would be happy to be paying you in them? Because that would only be in a bear market.
- deleted 9y ago[deleted]
- wyager 9y agoThis ad-hoc definition doesn’t make any sense. Everyone is happy to buy or sell bitcoins at a certain price. Whether that is (for you) higher or lower than market price depends on if you’re more bullish or bearish than the (weighted) average market actor.
- josephagoss 9y agoFrom what I have read people are using Bitcoin more and more for purchases. https://blog.bitpay.com/bitpay-growth-2017/ https://blog.bitpay.com/bitpay-growth-2017/
- thisisit 9y agoWelcome to the enigma - Is it a currency or an asset?