Bitcoin, Cryptocurrency and Blockchain Discussion Thread

[bkp_duke]

The price in USD is stable. The price in Bitcoin fluctuates.

This is due to most of Tesla’s business being transacted in USD.

Ask yourself this: would you rather have a volatile appreciating asset or a stable depreciating asset?

Cherry-picked argument. BTC has been a volatile DEPRECIATING asset as many times as it has been the opposite.

 

[thx1139]

The price in USD is stable. The price in Bitcoin fluctuates.

This is due to most of Tesla’s business being transacted in USD.

Ask yourself this: would you rather have a volatile appreciating asset or a stable depreciating asset?

Depends on how volatile the appreciating asset or how fast the asset is depreciating. Yes over time the USD loose purchasing power. Yet it is something you can price a product with and occasionally change the price. Same with income. You can offer someone a salary in USD and then adjust each year. If you paid someone a salary in bitcoin, imagine they hassle it would be to keep adjusting it. You offer them a job and then a month later it is totally different compensation. Simply put bitcoin is a speculative investment, not a currency.

 

[mekberg]

Depends on how volatile the appreciating asset or how fast the asset is depreciating. Yes over time the USD loose purchasing power. Yet it is something you can price a product with and occasionally change the price. Same with income. You can offer someone a salary in USD and then adjust each year. If you paid someone a salary in bitcoin, imagine they hassle it would be to keep adjusting it. You offer them a job and then a month later it is totally different compensation. Simply put bitcoin is a speculative investment, not a currency.

If you don't want to buy a car in Bitcoin then don't.

This isn't a hard technical problem. Tesla sets the price in USD and hooks up the payment mechanism to account for the exchange rate. ¯\_(ツ)_/¯

Edit: What percentage of buyers do you think will pay in Bitcoin? 0.5%? If Tesla were to keep 8% of its (growing) cash reserves in Bitcoin this will simply reduce the amount they actively have to convert on a go-forward basis.

 

[bkp_duke]

If you don't want to buy a car in Bitcoin then don't.

This isn't a hard technical problem. Tesla sets the price in USD and hooks up the payment mechanism to account for the exchange rate. ¯\_(ツ)_/¯

Edit: What percentage of buyers do you think will pay in Bitcoin? 0.5%? If Tesla were to keep 8% of its (growing) cash reserves in Bitcoin this will simply reduce the amount they actively have to convert on a go-forward basis.

0.5%? 1 in 200?

More like 1 in 10,000 I would estimate.

 

[heltok]

If you don't want to buy a car in Bitcoin then don't.

This isn't a hard technical problem. Tesla sets the price in USD and hooks up the payment mechanism to account for the exchange rate. ¯\_(ツ)_/¯

Edit: What percentage of buyers do you think will pay in Bitcoin? 0.5%? If Tesla were to keep 8% of its (growing) cash reserves in Bitcoin this will simply reduce the amount they actively have to convert on a go-forward basis.

Would think like 100-500. Lots of people have gotten very rich recently. The meme used to be to buy a lambo, some people did just for the meme. Chamath bought a house with Bitcoin, sure at least a handful of known Twitter handles would buy a Tesla with Bitcoin. Then there Chinese citizens in Canada, US, EU etc. And plenty of Bitcoin companies founders and ceos. Some WSB people for sure.

 

[ZeApelido]

If I pay for something with bitcoin, do I have to pay capital gains tax on the transaction?

 

[MP3Mike]

If I pay for something with bitcoin, do I have to pay capital gains tax on the transaction?

Yes.

 

[SomeJoe7777]

If I pay for something with bitcoin, do I have to pay capital gains tax on the transaction?

As far as the IRS is concerned, all cryptocurrency is treated exactly like a stock for tax purposes. Any realized gains from converting the cryptocurrency back to USD is treated as short-term or long-term capital gains and is taxed accordingly.

There are websites like cointracker.io that will monitor all of your crypto wallets, log all of the transactions, and at the end of the year can prepare a report to give to your tax professional that will have everything on it. (I have no affiliation with Cointracker other than I use that site to track my crypto portfolios).

 

[ZeApelido]

Yeah I have paid capital gains tax in BTC before. I just dont know how that works if I buy something with btc directly since it is never converted back to USD.

 

[MP3Mike]

Yeah I have paid capital gains tax in BTC before. I just dont know how that works if I buy something with btc directly since it is never converted back to USD.

The IRS treats Bitcoin as property. So it is just like trading your house that you paid $100k for, and is now worth $200k, for a different house that is worth $200k. You have realized $100k of capital gains. (And depending on when you bought the other house those gains are either short or long term.)

So you have to track your Bitcoin cost basis just like you have to track your TSLA cost basis.

 

[Prunesquallor]

The IRS treats Bitcoin as property. So it is just like trading your house that you paid $100k, and is now worth $200k, for a different house that is worth $200k. You have realized $100k of capital gains. (And depending on when you bought the other house those gains are either short or long term.)

So you have to track your Bitcoin cost basis just like you have to track your TSLA cost basis.

But I don’t track it at all. My broker does and reports to the irs. What’s the crypto equivalent?

 

[MP3Mike]

But I don’t track it at all. My broker does and reports to the irs. What’s the crypto equivalent?

Who tracks the cost basis on your house? Your cars? Your collectibles? (art work, baseball cards, jewelry, etc.) You are responsible for tracking. Technically while your broker tracks the cost basis of your stocks you are ultimately responsible for the accuracy.

 

[Matias]

So - all those processors (or some of them, anyway), are still going to be churning through the kWhs. What are their incentives to do such validation? Will it still be the case that the fastest, or the one with the otherwise most oomph, will be the early bird getting the worm?

Yes. The fastest will get all the transaction fees.

 

[Matias]

Gonna rant a little. Now with crypto getting exposure, so many people are starting to talk about Bitcoin. Youtubers, twitters, forum members etc. And they think that they have figured out something that all crypto commonity must have missed, Bitcoin no workie because deflation, Bitcoin no workie because chinacoin, Bitcoin no workie because energy etc. Like we haven’t heard these arguments every months for the last decade. Like the genius who came up with the idea and implemented it all by himself never considered this. Like they are smarter than all the people before them.

Today I heard DaveT saying that Tesla bough in early in Bitcoin. Sure, there is a lot more that will happen, but so much has already happened. Before the first valuation of Bitcoin ever happened someone said like “just imagine that one day these might be worth 10M dollars each”. The first price was set to 1337, that is $1=1337BTC. Today we are around $45000:1BTC. On a log scale Bitcoin only have two more magnitudes to grow to reach that imagined number. If we count the 0->1/1337 step, which imo was the hardest, as one step, it has grown more than 7 magnitudes since. So on a log scale Bitcoin has completed 8/10 steps. We are in the lategame of Bitcoin, newcomers seem to act as if Bitcoin is something new and untested, when in fact it is already battle hardened and extensively tested.

If you are just now catching up with Bitcoin, before you start saying why it is bad or why it cannot work, please try to first read the wiki, the faq, watch some Eric Voorhees or Andreas Antonopoulus video, read Digital Gold book etc. Then when you have some basic understanding you can start to argue for or against, why it can or cannot, what will or will not happen.

Hi otherwise great post, but how can you know what is the final value of btc ( when you say there are only two steps to go)?

edit; I see, you’re referring to 1btc =1 M usd value. That is of course completely arbitrary.

 

[heltok]

Hi otherwise great post, but how can you know what is the final value of btc ( when you say there are only two steps to go)?

edit; I see, you’re referring to 1btc =1 M usd value. That is of course completely arbitrary.

10M

Here is the background:

Hal was the second user of Bitcoin. RIP Hal.

 

[Nocturnal]

One thing people attack crypto for is processing speed, comparing it to credit card transactions. I have been thinking about that one. Sure your credit card authorization is very fast, but the actual processing of the payment is not. That still takes a couple days. Visa for example just tells the merchant that you are "good for it".

It would be a trivial matter for Visa or another company to do the same with Bitcoin. "ok, this person is a trusted buyer and has a credit line OR collateral in our accounts of 2 BTC so go ahead and approve this purchase for a hamburger". And of course bitcoin is far faster than ACH which takes days sometimes and even bank wires.

I hope my fellow TSLA investors who are skeptical of Bitcoin keep an open mind. The investment opportunity is comparable to buying Tesla at the 2019 lows IMO.

 

[Matias]

10M

Here is the background:
View attachment 635814View attachment 635815

Hal was the second user of Bitcoin. RIP Hal.

Thank you. I wasn’t aware of that.

 

[Matias]

I believe btc is more a storage of value than medium of exchange.

Most people who have paid something with btc regret it

 

[ZeApelido]

I believe btc is more a storage of value than medium of exchange.

Most people who have paid something with btc regret it

Exactly why it would be deflationary if it was the main currency.

 

[thx1139]

If you don't want to buy a car in Bitcoin then don't.

This isn't a hard technical problem. Tesla sets the price in USD and hooks up the payment mechanism to account for the exchange rate. ¯\_(ツ)_/¯

Edit: What percentage of buyers do you think will pay in Bitcoin? 0.5%? If Tesla were to keep 8% of its (growing) cash reserves in Bitcoin this will simply reduce the amount they actively have to convert on a go-forward basis.

That isnt purchasing in bitcoin. That is automating the bitcoin sale step. I can take bitcoin today sell it to $ and wire the money to Tesla to pay for a car. I can take stock today sell it to $ and wire the money to Tesla to pay for a car.