I’ve been thinking about buy some cryptocurrency, but I’m not that familiar with it.
I downloaded AtomicWallet. Now what?
The old lady needs some help…please?
f00l Yeah… That’s why I’m asking.
I’ve been following a few different ones, but I’m a complete novice with this. I thought there were some folks on here that were really into it and could give me some pointers.
Thanks for your response.
They’re like currency of countries, but there’s no country. Like collectible baseball cards, they’re worth what people will pay for them.
Underneath that very oversimplified description, they’re also used like private money to buy and sell stuff.
The magic part is that every payment gets published on a ledger, like your checkbook balance register. So there’s no “take-backs” or “check’s in the mail” or “your money never got here, so we sold the thing your bought to someone else”.
So who’s publishing stuff to the ledger? That would be the miners. In exhange for adding to the ledger, they get a reward, bit it’s left to chance that you get the reward - many will mine, only one eill win the reward. That’s what all those hard-to-find RTX3080 are doing right now…
@mike808 Yeah, I know most of that. It’s kinda like buying air, except there’s more to air. lol
I know you have to keep track in a wallet, and if you lose your wallet, you’re pretty well screwed unless you have a back up way to get to it.
I guess what I need to know is, how do you buy it, etc.
There are a couple of different kinds of wallets. There is an offline or “cold” wallet. That’s mostly like your physical wallet, it’s yours, whatever is in it is yours, and if you lose it (forget the password to unlock/open the wallet, or lose all copies of the wallet database/files), it’s gone forever. There’s a fair amount of work dealing with those and there are several hardware devices that function as cold wallets as well. Basically, they have a main “address” and you can generate more addresses if you need them. When you have crypto in your wallet, the ledger for that currency tells everyone how much is in that wallet address, when crypto goes in (you get paid in crypto) or goes out (you pay for something in crypto).
Then there’s a “hosted wallet”. That’s what Coinbase and other exchanges use. e.g. Binance, and a ton of others, many overseas and not subject to US law or oversight. So Caveat Emptor.
A useful service I’ve used is Uphold.com. It’s not really an exchange, but it is easy to use, and their main utility is in being able to pay people anywhere in the world in their local currency, or even in crypto. That’s helpful if you or your business deals with freelancers that may be anywhere in the world.
They’ve also added more assets like metals (gold, silver, palladium) and even stocks now. The innovation is that you can buy a partial share of the stocks they handle. I’ve not tried that feature.
It’s pretty easy to use and transfers to/from your bank are fairly fast (same day or next). This is much better than Coinbase, which will hold your money for the full 7-10 days, both before you can use a deposit and for withdrawals showing up in your bank account.
Also, there are some differences between Coinbase and CoinbasePro. The best rates and lowest fees are going to be on CoinbasePro, but it’s not as easy to use and the information on the charts dashboard is a bit overloaded, so not recommended for beginners.
If you sign up with the exchange Coinbase they give out small amounts of free crypto all the time as a reward for learning about that particular crypto and completing an easy test question.
You can keep your coins on the exchange itself or move them off to a separate wallet. There are small miners fees to pay if you do move your coins around.
@Tadlem43 I know nothing about atomic wallet, sorry. Coinbase is one of the safer exchanges since it is US based.
With a legit exchange it is fine to use your bank account, but it will take a day or so to verify it probably.
@f00l on Coinbase using a checking account will allow you to invest larger amounts or you can use a debit card for smaller amounts. A couple years ago some banks started charging a cash advance fee when sending funds to an exchange, not sure if they still do.
@f00l@Ignorant@Tadlem43
if you’re using Coinbase, it may be faster to deposit from a checking account into a regular Coinbase account, and then transfer the funds (in USD) from your Coinbase account to your CoinbasePro account. I hear that’s faster than going from your bank to CoinbasePro.
Note that the fees and spread are higher on Coinbase than they are on CoinbasePro.
Other exchanges often trade a simpler flat rate pricing (e.g. 1.5%) to cover fluctuations in price as the order executes, and you will pay a higher spread for the crypto you’re buying or selling on top of the fees. Also different exchanges have different prices for the crypto that flows through their exchange, so the price on smaller exchanges will be worse (higher for buys and lower for sells) than bigger exchanges. Coinbase and Gemini are the 800lb gorillas in the US markets and can be more competitive on pricing than smaller exchanges.
If you’re dabbling in crypto, note that there is a question on your IRS tax filing about having conducted any transactions in cryptocurrencies. The IRS considers them “assets”, like buying stocks, and you will have to convert every transaction, even buying something with crypto, into dollars at that time of the transaction, and you will have to calculate your basis (cost) for whatever crypto you sold or traded to determine your capital gains or losses, including whether they are short-term or long-term.
This is a huge PITA to track and to complete the all-important IRS Form 8949.
If you have less than 250 transactions, it’s $50/year. If you have more, it’s $175/year, but you have access to multiple tax year reporting, a read-only login access for your tax accountant to verify your info if they need to, and most importantly, they can optimize your individual transactions to maximize the losses and minimize the capital gains. Integrating with multiple exchanges and pulling your info is a set it and sync whenever deal. You download the 8949 transaction data as CSV ready for a spreadsheet or other analysis, or the PDF form 8949 ready to attach to your tax return.
It sounds confusing, but the 8949 is the detail, and you can summarize the overall sales gain/losses and short-term/long-term tax treatment in the “other asset investment income” forms in your 1040. You can’t use the schedule for stocks/bonds and those kinds of assets, though. But the idea is the same.
If you’ve made a bunch, you will have to cash out a bunch to pay the capital gains taxes at the 20% marginal rate. So just be prepared to budget for that.
Also, Coinbase will think that you are a business operating in crypto, and reports your overall total sales of any crypto to the IRS. What it does not do, is report or help you calculate the basis for those sales.
It’s a shocker to get that form from them and it says you’ve received $30,000 in “revenue” from selling crypto, like you are a store with $30,000 of sales revenue. Even though it is just normal buying and selling - because the buying isn’t on that form. That’s why a crypto tax service is so valuable. Figuring out your basis is a nightmare.
You might put in an order to buy 0.1 BTC, but the exchange might actually execute 3 different orders that total 0.1 BTC, but they will be at different prices and have different fees for each sub-transaction. That’s the details that TaxBit sorts out for me so I don’t have to. The $175 annual fee was a no-brainer.
What the IRS is looking for is your schedule of capital gains/losses showing the same (or more) overall total revenue/income from Coinbase transactions matching that overall sales revenue form Coinbase sends you and reports to the IRS.
I will also add that if you’re using your own wallet, you need to track all of that stuff manually yourself - for every transaction in your wallet. Although the wallet may have a transaction report or export as CSV you can upload to TaxBit (or other service).
Hence starting with a US-based exchange is probably a safer and better choice for starting out, just from a records-keeping perspective.
TaxBit can pull transactions from any of the following exchanges, in addition to Coinbase and Uphold, BinanceUS, and Gemini (the Winkelvoss brothers’ exchange):
1BTCXE, ACX, Adara, Allcoin, ANXPro, Bequant, Bibox, Binance, BinanceUS, Bit2C, bitbank, BitBay, Bitfinex, bitFlyer, BitMart, Bitso, Bitstamp, Bittrex, BlockFi, Braziliex, BTC-Alpha, BTC Markets, CEXio, COBINHOOD, Coinbase Prime, coincheck, CoinEx, CoinFalcon, COSS, CREX24, DSX, EXMO, GateIO, Gemini, HitBTC, ICE3X, KKEX, Kraken, Kucoin, Kuna, Latoken, Liquid, LiveCoin, luno, Mandala, OKCoin, Stronghold, TheRockTrading, Tidex, Uphold, YoBit.
If you’re wondering about all the different cryptocoins out there, they are each designed to address some sort of, generally speaking, tracking problem. What they track is the token, or “coin”. How many there are and in which wallets they are in. A wallet is just a serial number. it’s not tied to you, but the US exchanges will cough up your info if asked by LEOs or the IRS.
It is worthwhile to understand what the crypto is being used for to understand the “market” for that cryptocurrency.
For example, the BAT token is used for tracking rewards in video games. Think of the Steam trading cards exchange type scenario. Others, are used for “smart contracts”. That’s the killer use case for ETH, and variants that are spinoffs of ETH (but may be anchored to ETH to avoid the congestion of the ledger processing). Others, like LTC and DASH are targeting fast transaction posting/clearing, like a digital cash. BTC is mostly behaving like a savings account (stored value) where you park money, not buy and sell stuff with it. Then there’s XRP (Ripple) which was made for moving money, like between banks or a commercial Western Union money order service.
So do your homework on the market size, the volume (liquidity) of the cryptocurrency you’re investing in, and the use case. If the use case dries up or the use is really only for transactions between a small pool of business partners, then that may not be a great “investment”, if the purpose of the coin/token is to reduce transaction costs between a group of businesses or a specific industry (like a supply-chain token/currency).
@mike808 Yeah… I knew a little of that. Like Polkadot, for example, is used for transferring assets and data, not just coins, and is supposed to be an up and coming thing. So I know they all have a different purpose, but I didn’t realize how specialized it is.
I definitely need to study up on them some more before I buy in.
I’ve been watching some of them for awhile now, so I have an idea of what’s moving and what’s not, but I’d like to explore the purpose thing more.
Thank you so, so much for the info! I might be back with more questions, if you don’t mind. But you’ve really been great at answering a lot of my questions so far!
i bought some in the summer of 2017, and offered a ‘friend’ link here that eventually caused me to drop my level of participation on this site, but that’s a whole 'nother story.
they are super volatile, so be prepared to lose all of your money. i put in $2 (with an undisclosed number of zeros after) that i was prepared to lose.
i’ve since taken out $2 + $5 and my remaining balance is $3. if i had left it all in my balance would be ~$38.
i use coinbase. my advice - wait for it to go under $5k to buy.
@Yoda_Daenerys Ah, yes, the “If only I knew what the future holds…” story. I too had a bunch of BTC under 20K basis and when it hit 30K, got nervous and figured I’d get out before a correction in a repeat of 2017. 50% gains were my risk appetite. So I bailed. Then it went to 40K. So I missed another 50% gain.
Oh well. Can’t win them all. Then there’s the folks that bought at 40K who are stuck waiting or eating a 25% loss.
It is not for folks with a low appetite for volatility or risk. Remember, all the people who have gone broke in any investment aren’t the ones you see on YT or hear about. Many will enter, few will win.
The same for stocks. Valuations are ridiculous in today’s market. And taxpayers have the 10T McConnell Tax Cut and a couple more trillion in COVID relief costs to pay for real soon. So the dollar may lose some value, meaning inflation and higher costs. That’s what’s driving demand for “stonks” and assets, including virtual ones like crypto.
@Yoda_Daenerys Same here. Reached my tolerance and got out too early. Still ahead, and I can can live with that. Can’t win them all, and I didn’t lose money or was under water like on my house after Bush and wall street fucked main street America for a decade.
I know some forms can be purchased using square’s Cash app.
Don’t get into cryptocurrency without reading up. You need some tutorials and intro materials/videos. Perhaps extensive intro materials.
f00l Yeah… That’s why I’m asking.
I’ve been following a few different ones, but I’m a complete novice with this. I thought there were some folks on here that were really into it and could give me some pointers.
Thanks for your response.
They’re like currency of countries, but there’s no country. Like collectible baseball cards, they’re worth what people will pay for them.
Underneath that very oversimplified description, they’re also used like private money to buy and sell stuff.
The magic part is that every payment gets published on a ledger, like your checkbook balance register. So there’s no “take-backs” or “check’s in the mail” or “your money never got here, so we sold the thing your bought to someone else”.
So who’s publishing stuff to the ledger? That would be the miners. In exhange for adding to the ledger, they get a reward, bit it’s left to chance that you get the reward - many will mine, only one eill win the reward. That’s what all those hard-to-find RTX3080 are doing right now…
@mike808 Yeah, I know most of that. It’s kinda like buying air, except there’s more to air. lol
I know you have to keep track in a wallet, and if you lose your wallet, you’re pretty well screwed unless you have a back up way to get to it.
I guess what I need to know is, how do you buy it, etc.
@mike808 Do you know anything about AtomicWallet?
@Tadlem43 I’ve only played with Electrum wallet.
There are a couple of different kinds of wallets. There is an offline or “cold” wallet. That’s mostly like your physical wallet, it’s yours, whatever is in it is yours, and if you lose it (forget the password to unlock/open the wallet, or lose all copies of the wallet database/files), it’s gone forever. There’s a fair amount of work dealing with those and there are several hardware devices that function as cold wallets as well. Basically, they have a main “address” and you can generate more addresses if you need them. When you have crypto in your wallet, the ledger for that currency tells everyone how much is in that wallet address, when crypto goes in (you get paid in crypto) or goes out (you pay for something in crypto).
Then there’s a “hosted wallet”. That’s what Coinbase and other exchanges use. e.g. Binance, and a ton of others, many overseas and not subject to US law or oversight. So Caveat Emptor.
A useful service I’ve used is Uphold.com. It’s not really an exchange, but it is easy to use, and their main utility is in being able to pay people anywhere in the world in their local currency, or even in crypto. That’s helpful if you or your business deals with freelancers that may be anywhere in the world.
They’ve also added more assets like metals (gold, silver, palladium) and even stocks now. The innovation is that you can buy a partial share of the stocks they handle. I’ve not tried that feature.
It’s pretty easy to use and transfers to/from your bank are fairly fast (same day or next). This is much better than Coinbase, which will hold your money for the full 7-10 days, both before you can use a deposit and for withdrawals showing up in your bank account.
Also, there are some differences between Coinbase and CoinbasePro. The best rates and lowest fees are going to be on CoinbasePro, but it’s not as easy to use and the information on the charts dashboard is a bit overloaded, so not recommended for beginners.
@mike808 Awesome info! Thank you!
POPSOCKETS! SPA KITS! POLLY POCKETS! AWESOME!
If you sign up with the exchange Coinbase they give out small amounts of free crypto all the time as a reward for learning about that particular crypto and completing an easy test question.
You can keep your coins on the exchange itself or move them off to a separate wallet. There are small miners fees to pay if you do move your coins around.
@Ignorant Oh, cool! Thanks!
Do you know anything about AtomicWallet? Is it safe to use my regular banking accounts to fund purchases?
@Ignorant @Tadlem43
Will the exchanges take debit or credit cards for purchases?
if so consider using a virtual debit or credit card number with a spending limit attached to it for these purchases
some card you use for nothing else
You can set up virtual debit cards at privacy.com you may be able to set up virtual credit cards there as well
some credit cards I think particularly those from Bank of America allow virtual credit card numbers for special uses but I’m not certain of this info
@Tadlem43 I know nothing about atomic wallet, sorry. Coinbase is one of the safer exchanges since it is US based.
With a legit exchange it is fine to use your bank account, but it will take a day or so to verify it probably.
@f00l on Coinbase using a checking account will allow you to invest larger amounts or you can use a debit card for smaller amounts. A couple years ago some banks started charging a cash advance fee when sending funds to an exchange, not sure if they still do.
@f00l @Ignorant @Tadlem43
if you’re using Coinbase, it may be faster to deposit from a checking account into a regular Coinbase account, and then transfer the funds (in USD) from your Coinbase account to your CoinbasePro account. I hear that’s faster than going from your bank to CoinbasePro.
Note that the fees and spread are higher on Coinbase than they are on CoinbasePro.
Other exchanges often trade a simpler flat rate pricing (e.g. 1.5%) to cover fluctuations in price as the order executes, and you will pay a higher spread for the crypto you’re buying or selling on top of the fees. Also different exchanges have different prices for the crypto that flows through their exchange, so the price on smaller exchanges will be worse (higher for buys and lower for sells) than bigger exchanges. Coinbase and Gemini are the 800lb gorillas in the US markets and can be more competitive on pricing than smaller exchanges.
@f00l @Ignorant Thank you!!
@mike808 i thought coinbase got rid of pro, or made them the same?
i had moved stuff to coinbase pro some months/years ago, but moved it back to regular coinbase more recently.
@mike808 and now i just looked at the dates of this post, nevermind…
If you’re dabbling in crypto, note that there is a question on your IRS tax filing about having conducted any transactions in cryptocurrencies. The IRS considers them “assets”, like buying stocks, and you will have to convert every transaction, even buying something with crypto, into dollars at that time of the transaction, and you will have to calculate your basis (cost) for whatever crypto you sold or traded to determine your capital gains or losses, including whether they are short-term or long-term.
This is a huge PITA to track and to complete the all-important IRS Form 8949.
Pay for a crypto tax service!
I highly recommend TaxBit.com.
If you have less than 250 transactions, it’s $50/year. If you have more, it’s $175/year, but you have access to multiple tax year reporting, a read-only login access for your tax accountant to verify your info if they need to, and most importantly, they can optimize your individual transactions to maximize the losses and minimize the capital gains. Integrating with multiple exchanges and pulling your info is a set it and sync whenever deal. You download the 8949 transaction data as CSV ready for a spreadsheet or other analysis, or the PDF form 8949 ready to attach to your tax return.
It sounds confusing, but the 8949 is the detail, and you can summarize the overall sales gain/losses and short-term/long-term tax treatment in the “other asset investment income” forms in your 1040. You can’t use the schedule for stocks/bonds and those kinds of assets, though. But the idea is the same.
If you’ve made a bunch, you will have to cash out a bunch to pay the capital gains taxes at the 20% marginal rate. So just be prepared to budget for that.
Also, Coinbase will think that you are a business operating in crypto, and reports your overall total sales of any crypto to the IRS. What it does not do, is report or help you calculate the basis for those sales.
It’s a shocker to get that form from them and it says you’ve received $30,000 in “revenue” from selling crypto, like you are a store with $30,000 of sales revenue. Even though it is just normal buying and selling - because the buying isn’t on that form. That’s why a crypto tax service is so valuable. Figuring out your basis is a nightmare.
You might put in an order to buy 0.1 BTC, but the exchange might actually execute 3 different orders that total 0.1 BTC, but they will be at different prices and have different fees for each sub-transaction. That’s the details that TaxBit sorts out for me so I don’t have to. The $175 annual fee was a no-brainer.
What the IRS is looking for is your schedule of capital gains/losses showing the same (or more) overall total revenue/income from Coinbase transactions matching that overall sales revenue form Coinbase sends you and reports to the IRS.
I will also add that if you’re using your own wallet, you need to track all of that stuff manually yourself - for every transaction in your wallet. Although the wallet may have a transaction report or export as CSV you can upload to TaxBit (or other service).
Hence starting with a US-based exchange is probably a safer and better choice for starting out, just from a records-keeping perspective.
TaxBit can pull transactions from any of the following exchanges, in addition to Coinbase and Uphold, BinanceUS, and Gemini (the Winkelvoss brothers’ exchange):
1BTCXE, ACX, Adara, Allcoin, ANXPro, Bequant, Bibox, Binance, BinanceUS, Bit2C, bitbank, BitBay, Bitfinex, bitFlyer, BitMart, Bitso, Bitstamp, Bittrex, BlockFi, Braziliex, BTC-Alpha, BTC Markets, CEXio, COBINHOOD, Coinbase Prime, coincheck, CoinEx, CoinFalcon, COSS, CREX24, DSX, EXMO, GateIO, Gemini, HitBTC, ICE3X, KKEX, Kraken, Kucoin, Kuna, Latoken, Liquid, LiveCoin, luno, Mandala, OKCoin, Stronghold, TheRockTrading, Tidex, Uphold, YoBit.
@mike808 I can’t believe that I actually followed all of that, but I did. lol
I knew it was taxable, but that info is great! Thanks!!
If you’re wondering about all the different cryptocoins out there, they are each designed to address some sort of, generally speaking, tracking problem. What they track is the token, or “coin”. How many there are and in which wallets they are in. A wallet is just a serial number. it’s not tied to you, but the US exchanges will cough up your info if asked by LEOs or the IRS.
It is worthwhile to understand what the crypto is being used for to understand the “market” for that cryptocurrency.
For example, the BAT token is used for tracking rewards in video games. Think of the Steam trading cards exchange type scenario. Others, are used for “smart contracts”. That’s the killer use case for ETH, and variants that are spinoffs of ETH (but may be anchored to ETH to avoid the congestion of the ledger processing). Others, like LTC and DASH are targeting fast transaction posting/clearing, like a digital cash. BTC is mostly behaving like a savings account (stored value) where you park money, not buy and sell stuff with it. Then there’s XRP (Ripple) which was made for moving money, like between banks or a commercial Western Union money order service.
So do your homework on the market size, the volume (liquidity) of the cryptocurrency you’re investing in, and the use case. If the use case dries up or the use is really only for transactions between a small pool of business partners, then that may not be a great “investment”, if the purpose of the coin/token is to reduce transaction costs between a group of businesses or a specific industry (like a supply-chain token/currency).
@mike808 Yeah… I knew a little of that. Like Polkadot, for example, is used for transferring assets and data, not just coins, and is supposed to be an up and coming thing. So I know they all have a different purpose, but I didn’t realize how specialized it is.
I definitely need to study up on them some more before I buy in.
I’ve been watching some of them for awhile now, so I have an idea of what’s moving and what’s not, but I’d like to explore the purpose thing more.
Thank you so, so much for the info! I might be back with more questions, if you don’t mind. But you’ve really been great at answering a lot of my questions so far!
https://www.cnbc.com/2021/01/29/dogecoin-cryptocurrency-rises-over-400percent-after-reddit-group-talks-it-up.html
@Kyeh lol I might have to have that! lol
i bought some in the summer of 2017, and offered a ‘friend’ link here that eventually caused me to drop my level of participation on this site, but that’s a whole 'nother story.
they are super volatile, so be prepared to lose all of your money. i put in $2 (with an undisclosed number of zeros after) that i was prepared to lose.
i’ve since taken out $2 + $5 and my remaining balance is $3. if i had left it all in my balance would be ~$38.
i use coinbase. my advice - wait for it to go under $5k to buy.
/image another story
/giphy under 5k
/youtube i may be crazy
/8ball “will it ever happen?”
My sources say no
@Yoda_Daenerys Ah, yes, the “If only I knew what the future holds…” story. I too had a bunch of BTC under 20K basis and when it hit 30K, got nervous and figured I’d get out before a correction in a repeat of 2017. 50% gains were my risk appetite. So I bailed. Then it went to 40K. So I missed another 50% gain.
Oh well. Can’t win them all. Then there’s the folks that bought at 40K who are stuck waiting or eating a 25% loss.
It is not for folks with a low appetite for volatility or risk. Remember, all the people who have gone broke in any investment aren’t the ones you see on YT or hear about. Many will enter, few will win.
The same for stocks. Valuations are ridiculous in today’s market. And taxpayers have the 10T McConnell Tax Cut and a couple more trillion in COVID relief costs to pay for real soon. So the dollar may lose some value, meaning inflation and higher costs. That’s what’s driving demand for “stonks” and assets, including virtual ones like crypto.
@Yoda_Daenerys
Well, LOL. BTC is back to 38K. Buckle up.
@mike808 yea, my last liquidation was at $20k, felt good, until it went to $40k 10 days later.
@Yoda_Daenerys Same here. Reached my tolerance and got out too early. Still ahead, and I can can live with that. Can’t win them all, and I didn’t lose money or was under water like on my house after Bush and wall street fucked main street America for a decade.
@mike808 i went through foreclosure myself in that period.
I dont like crypto!