Crypto Currencies?

[Derron]

Someone of you spending some money in crypto coins?

Bought some in early december: doge, monero, litecoin and ether. Started with 175 euros and sold my doge coins for 400 some days later. Bought back then when price sunk a bit. "anycoindirect" (as eur-cryptocoin-eur trader) took a big bite when buying/selling, so would have been more.

Since then I am pretty much holding my coins - and tried trading between coins (with no win/loss as the "fees" bite away my wins  - and not everything was a "win" on its own).

Now I am playing a bit with ripple the last days. Using bitstamp to buy/sell them. With big volatiles you can make 20-25% with luck, or at least 10% within some minutes now. Started with ripples 115 euros worth, am now at 400. Helped my little brother to buy some neos too ... when they were buyable for 50 (now at 120). Interesting questions will arise from that as "NEO" allows to claim another currency as some kind of "interest". Interest money has another tax rate than speculative gains ... but that interest is in another currency - so it depends on when you switch them to Euro. Will become interesting.

A pity all the money I win will be 35% for the government at the end (tax) as soon as I reach over 600/year (remember that the first sales were done in last year...so I nearly start afresh these days). Exception is holding - which Is why I am still holding my doge coins (they rised from 0.002 to 0.0012 since I am holding them). Holding them for > 1 year gets rid of the taxes.


Ok, and what about you? Some of you "hodling" crypto coins?

PS: I still remember arguing with a buddy some years ago in the university. He wanted to buy some bitcoins and I denied as I cannot imagine others to accept that widely so there would be no need for me to invest in a "20 euro/bitcoin" thing. I .. should have (while the buddy bought a handful) :-)

bye
Ron

[GW]

Ya, the more I research the coins the more I find myself deeper 'on the fence'. Part of the reason these coins continue to grow in value is because It's so difficult to get your money out. If everyone bought stock in a company and couldn't sell it, It would keep going up.
 

[Derron]

Getting them "on your bank" means paying a bit (spread value between "buy" and "sell" is sometimes higher than needed).

Gladly all these costs are taken into the calculation of your tax.  Basically it is some kind of blackbox: Max(0, "out minus in") = "something to pay tax for".

bye
Ron

[Xaron]

I'm in Spankchain. (no joke). Entered beginning of December at around 0.00011 ETH (~4.5cent at that point). I think this is one of the few altcoins which will rocket by the end of 2018/beginning 2019. I think they will hit $5-$10 by the end of this year (currently at about $0.40).

Regarding tax: There's no tax here in Germany for it when you hold it for at least 12 months.

[Derron]

Yes...12 months. If you sell earlier then ~35% of tax will need to get paid. At least, if you are honest to your government - smaller transactions might be "hideable" for now - until they get experienced enough with the new "thing". Do not forget that since 2018 banks in Europe need to ensure to be able to deliver a complete money-route for 10 years. Means as long as you do not spend your "wins" to China or USA (so you get nice packages of goods delivered - paid with your "coins") it might be traceable up to your bank account.

Spankchain is - like most other coins - not available in the systems I have accounts at (for now bitcoin.de, bitstamp.net and anycoin.eu). Also I somehow dislike the way of having to buy a "intermediate coin" first (in that case Ethereum). I understand that some coins are based on another coin's system.

Also some coins make trading rather complicated - but this is because of their nature of eg. having one single wallet/storage address and an individual "subadress" to allow nearly unlimited clients of one address. I prefer to have single sender-receiver connections and an _optional_ kind of identifier-ID (which might be a duplicate, so no complicate unique-hash-generation-thingy). Just similar to a "subject line" of an email. It is already unique because of its unique ID/Hash, so if one really needs he could store the association in a different table than in the coin's "block chain".

bye
Ron

[RemiD]

a bit late to the party... (i should have bought some BTC in december 2012, when i first discovered it  arrr!)

i have just bought some (fraction of) bitcoin a few days ago, and i plan to buy a least 1BTC (but i wait to see if the price decreases a little)

not to speculate but rather as a "safe" store of value. (i plan to buy some silver coins too)


@those who buy/sell cryptos :

->can you backup your "wallet"/account offline, regularly, but still have it on an exchange platform (i use coinbase), to buy/sell ?
i suppose that a backup must be done after each transaction to be considered as valid ?

->how do you manage to get back the money (in USD/EUR) without being taxed ? (maybe keep it on a paypal account ? or buy a "temporary money card" ? or open an online bank account which is tolerant regarding cryptos transfers ?)

[Derron]

@ backup

Not really. When you transfer your money from your wallets to an exchange, it lands on one of their wallets and they give you a "virtual" wallet on their system. On their platform you can trade without affecting the "outside" chain.
Your wallet can be backupped once - the "hash" of the wallet. The transactions are not needed to get backupped - as the chain already stores it - so the "network" keeps history of all your transactions (but as said not the ones on the exchanges/trading sites)


@ get back
Taxing is something your country does - so any cheating should not be discussed here. I assume you checkout your money ... and if the platform (bitstamp, binance, ...) cooperates with your tax office then they report it already then it happens automatically. Also if a monetary value bigger than X is transferred from "company X to you" (on your bank account) then your bank might be required to report too.
To "avoid" taxes in Germany you have to "hold" crypto for more than a year. If you "trade" (on a platform) then earnings from this trades are taxable. To minimize or avoid taxes you can need to trade in a way which creates losses.

Buy 1 BTC for 5000 on 01.01.2020
Sell 1 BTC for 5500 on 01.06.2020 -> 500 win (which you would need to pay taxes for)
Buy 1 BTC for 5100 on 01.07.2020
Sell 1 BTC for 4500 on 01.08.2020 -> 600 loss (so you would gain back from the taxes)
Buy 1 BTC for 4600 on 02.08.2020 -> hold this one (one day space is enough to be a new "bought coins to hold for a year")
Sell 1 BTC for 8600 on 01.09.2021 -> tax free win of 4000 (in Germany)


bye
Ron

[RemiD]

When you transfer your money from your wallets to an exchange, it lands on one of their wallets and they give you a "virtual" wallet on their system. On their platform you can trade without affecting the "outside" chain.

what ? so if i understand correctly what you wrote, it means that for now i am in the same situation than with a bank account, where the exchange platform owns my money/coins on its own account, and i only have an account on their website, not on the bitcoin system/network ?
so how do i get my own account (id/password) on the bitcoin system/network ?

[Derron]

@ exchange
Yes, you handed them over your money (so they "could" potentially use it to trade with it, which does not happen, they earn sooo much by the trading fees which are virtually "not costing anything except server + manpower costs"). So it works similar like a bank - hence the discussions about banking licences etc.

To avoid that:
You just create a wallet ... and use that to "withdraw" the money from the exchange. Each "transfer" costs something - depending on the coin this is the currency itself, or an extra currency (eg for "Neo" you pay in "Gas" - gas is also produced while holding the coin in your wallet, you just need to claim it regularly).

Selling your coins on an exchange is of course faster than having it in your "cold wallet" (password, hash, ... can be printed out on paper and that is your "bank account" then).
If you plan to have it stored for many years, then this is the way to go - but attention: loose your hash + backup data (eg the 15-words-list to recreate your hash) then the money is lost forever. A "secure" exchange (not hacked, not backupped financially in case of hacks, ...) would be more safe when your home is burning or such stuff.


Next to "print it out" cold wallets there is also wallet software (like Jaxx) which can store a lot of this stuff for you (you of course can still print out the "credentials" so it works without that software too). Such software helps if you want to send some coins (or parts of it) to an exchange to sell it there (or trade with it). They also incorporate "coin exchanges" so you just say "I want to buy XRP with my BTC" and then define the amount, it lists the costs and what coin amount you will receive.


So I have some hundred thousand dogecoin in a "cold wallet" (bought over a year ago - at a value similar to the current ones, I sold 50% of them when value was >200% of my buy value and rebought same amount again after it dropped back) while my XRP are stored on bitstamp - to trade them here and then. On Binance I have some penny stock coins (OAX, FUEL, ...) - coins which have nice fluctuations of 10-30% within weeks. So you can loose a lot - or win a lot. Started there with 50$ and am now at >200$ (including some losses and some wins) - sounds much (relatively) but expressed in BTC I started with 0.014BTC and am now at 0.027 - 2 months ago this was down to 0.017 or so, but even in that "everything is bleeding" phase you could have some good trades). Having only some dollars/euros at the exchange for trading means the potential amount of taxes is ... pretty low. It can be seen as a little "trading game" there.



bye
Ron

[RemiD]

thanks for the explanation about wallet, i will take a look

about trading, i met a guy who apparently bought a few bitcoins (for only a few hundreds euros) before the high rise in 2017, then sold a few before the fall of 2017, he must have felt happy
my goal is to own 1btc in case of another financial crisis... but for now it is too costly, i have only 0.01btc, just trying to understand how all this stuff work ! i am going to wait a little... (if only i had taken the risk in december 2012 !!!  )

[Kryzon]

I don't quite understand the sale process. 

Say, you have an X amount of a coin, and the market value went up, you want to sell it. 

For me it'd make sense if it were... 
"I want to sell X amount of coin" 

But it's not that, it's... 
"I want to sell X amount of coin, for Y dollars" 

1) What happens if you set Y below the market value? 
2) What if you set Y as the current market value? 
3) What if you set it higher than the market value? 

How long does it usually take for your sale operation to finish (i.e. someone buys it)? 
Have you ever had one of your sales not finishing, as in, no one was interested in it?

[Derron]

It depends on the kind of sale you do.
Market, Limit, Stopp-Limit, ...

Some act this way:
- buy what you could get for 100 Dollars (first for 10, then next 5 offered might be at 11, ... - you buy 1*10 + 5*11 + ... until you reach 100)
- buy at a given value ("limit"). You define "buy 10 for 10each" - it buys as soon as someone offers something for 10, it does so until it completes to have bought 10 for 10
- stopps ... you say "sell as soon as price falls below X" or "buy as soon as price climbs higher than X" and often you can add additional limits ("sell as soon as price falls below X% of value y" or "sell as soon as price falls below X after having raised above Y")
...

Stopp-Losses are there to avoid "total loss" but are dangerous on low-volume coins (in which a bigger transaction can result in 50% drops):

If you had a stopp loss here - saying "sell as soon as it drops below 0.50 - you would have lost over 20% (if you would buy it back some moments later)

Limit sell/buys are what you often use if you have "time": you do cascade buys.
buy 10 at 50
buy 10 at 45
buy 10 at 40

So if the price decreases to <50 it means you most probably bought the first 10. If it then lowers to 45 and then climbs to 55 ... you have bought the first 10 too expensive but buying the second ones leads to an average buy value of 47.5 (the buy-date has of course an impact on when you have your "hold for one year to save taxes" moment). This thing is called "cost averaging".


In the case of the image above I would better have had a limit buy with a very low value - but this requires you to have some "spare currency" (in this case "BTC"). So the more you can spend, the easier it is to participate in such "fat finger" things (someone maybe wanted to buy with "limit buy @ 0.000004" but misclicked and bought at "market" so it bought what it could for the given amount of money - leading to bots selling panically etc.). I would have been able to earn 50% wins within seconds but yeah, you never think such stuff happens (happens in the "uppersite" direction too - so have utopic limit sells at +40% of current prices!)

Same is done when selling. You see the price is climbing ... and somewhen will reach a maximum until falling again. If you set your sell price a bit too high you will not sell a single coin. So you sell in steps. If the price continues to climb you still are able to sell. If it falls then you at least were able to sell some of them (and are even able to buy them back if the drop is big enough to increase your coin holdings).

If you plan to "just sell my coins" then of course this cascade selling is not required. Sell it and never (!!) look back at the charts (to not feel unhappy "argh I should have waited to sell").


@ How long does it take
This depends on the activity of a coin. The more it is traded on a platform, the faster you might sell your stuff (at a "current price"). If your price differs from "current price" then it depends on which direction the price goes
Assume best buy offer is "pay 10 for 1 coin", best sell offer is "sell 1 for 12", then no trade will be made - no matter how many interest is there for the coin. So as long as nobody offers to sell for 10 - or buy for 12, nothing will happen. But as soon as you add this offer, it will "happen" (except you have a "only trade if I get all 10000 coins for that price" option - not all trading platforms allow this).


Then there is stuff like "anycoindirect(.eu)" they will buy your stuff (or sell) at their rates. No waiting time (but fees etc.). Also there are markets like "bitcoin.de" where people list their offers ("sell 4 for 20.000") and others can buy (so not 3, not 2 - but 4 for 20.000).



bye
Ron

[RemiD]

after some more research, i see some problems with bitcoin and others crypto moneys... (as a replacement of the current money system) :

bitcoin :
the good :
-limited amount of money units
-safe transactions and accounts
-no need of a third party to transfer money between 2 persons need of a third party app, but they are usually open source with several developpers/contributors

the bad :
-the creator of the original code apparently owns 1 000 000 bitcoins !
-and others early buyers own in the 100 000s
-1 bitcoin is currently (14/01/2020) "valued" at 7800eur
this is clearly not democratic, unfair and not a safe reserve of value imo... but good if you like playing / trading

for others alt coins :
the bad :
-some creators have given themselves a lot of coins for free
-some creators keep the possibility to create more coins at will (not different than the current money system we all use, clearly not democratic and unfair and inflationist)

the more i learn, the more i think that things like foods, natural ressources, construction pieces, tools, machines, electronic components, lands are a more safe reserve of value...

[Derron]

You are right about coins like XRP/Ripple - whose holders sell a fixed amount of coins each month - so "money for free".

But ... think if land you can buy. Who owns it? Why do they own it? Why aren't you able to claim your own part of the land? With coins it is the same: if you were there at the right time, you might have had the chance to buy and own land - or fresh crypto coins. But at the time where land was "claimable" (somehow) the possibilities with this piece of land were limited - "who would need it?". Same for the crypto coins - "who would need it?".
Believe in something (to have enough bravity to invest) and then a big portion of luck is required to make you rich (wealthy - or rich in knowledge or in something else you desire).


Gold and silver is also only expensive as others want it. It is not so much needed for electronics or other stuff. Jewelry can be made out of cheaper materials. So why is it expensive, just because more people want it and there is a limited offer (naturally or artificially).


bye
Ron

[RemiD]

i agree with you that a thing has the value that some people give to it.

but ! gold and silver have been used as money (and as a stable store of value) for thousand of years ! (until recently in 1971  when some  american politicians decided to scam the world, and of course some european politicians followed the scam, and those who were opposed to it, were defamed and rewarded with war...)

also silver 9999 can be used to make colloidal silver, a great and safe anti microbes (if used properly)

electronic components used in low tech circuits like arduino are, imo, a good reserve of value, because they are and will be useful to make all kinds of useful devices with real world applications, that you can assemble, disassemble, modify, repair, reuse.

the idea behind bitcoin is really good, a limited amount of money units, more safety, more freedom, more transparency, but the implementation is unfair and greedy, imo.

a more fair money system would be similar to bitcoin but :
each person is born with 1 coin (dividible)
each person can not accumulate 1000 times more than a newborn (so 1000 coins max) (or something like that, 1000 is arbitrary, it could be more, i don't know, you get the idea)
when a person dies, his money disappears.
so those who are more intelligent / smart /  strong / agile / fast / endurant / motivated / ingenious / courageous / etc..., could earn more, but with a limit...

and i say that with a pro liberal / anti welfare mindset, so you can see how unfair the current money system is !

(btw i can buy several btc if i decide to, but i don't think it is a safe store of value or what will replace the current money system...)