Trading Tip `The Wall´ – Meet the TA Gods

Trading Tip `The Wall´ – Meet the TA Gods

Trading Tip `The Wall´ - Meet the TA Gods

Whether TA works or not is a topic discussed ad nauseam in cryptocurrency circles. As a cryptocurrency trader with a fascination for engineering, math and science, I backtested the entire spectrum of the most popular bitcoin TA indicators in early 2015 using the now defunct Tradewave-platform, in search of that magic formula that would allow me to make money on auto-pilot. I did not find it.

Also read: Drop Tokens That Suffer From Overtokenization

Meet the TA Gods

Currently, I’m working on recreating a 2018 version of that experiment, the results of which I’m looking forward to sharing with you in a column post soon. However, I can already reveal that the results are not looking promising. I’ve long been disillusioned with the prospects of earning a steady income using predictive algorithms, to the point where I’ve stopped believing in them completely.

Trading Tip `The Wall´ - Meet the TA Gods

So, while I color myself a TA skeptic, I still tend to marvel at the near-surgical precision of which the market tends to move in certain cases. Observing the above picture, I’m yet again amazed to see the bitcoin price just reaching the descending trend line just under $12,000 before continuing its downward trajectory. How can it be, that while the empirical evidence for TA disproves its relevance, these TA bulls-eye calls appear again and again?

Enter Crypto Twitter

Look at the tweet above. That is just one of hundreds of such tweets I’ve seen in the past months; tweets listing various “TA Gods”, each with tens or hundreds of thousands of followers, who seemingly worship the chart analysis bestowed upon them by their holy prophets.

One such TA god is @angelobtc, who has undoubtedly earned that position as he’s the #1 trader by notional profit on Bitmex.

 Trading Tip `The Wall´ - Meet the TA Gods

That’s $30 million in profit.

Make note: the top trader on Bitmex, which is the largest exchange by notional volume, is not some Goldman Sach’s trading desk or some hedge fund algo-trader. It’s a Twitter guru, fully immersed in crypto Twitter memeology, slang and banter. He’s even a decent OC meme-lord himself.

So what does @angelobtc do then with his impressive, proven track-record of trading and his 93,800 follower base? Here are some examples:

Fibonacci lines (TA).

Price calls.


The Global Hivemind of Memes

Bitcoin traders are, demographically speaking, a pretty homogeneous group. Broadly speaking, we are 18-34 years old, male, and avid Internet users. As a group, we have since the evolution of Internet culture developed our own way of effectively spreading and sharing ideas on a global scale, and that is through viral memes. In a sense, that is how we, as a demographic, experience the world and the events in it together.

It is perhaps not that crazy to assume that this phenomenon has carried over to the bitcoin markets. I contend that at a micro scale there are certain “trading prophecies” that spread among cryptocurrency traders just like viral memes, through Twitter, Telegram and Discord trading chats. These prophecies then become real, through the belief and actions that their audience undertakes.

What are your thoughts on so-called “trading prophecies?” Let us know in the comment section below!

Images via Shutterstock, Twitter.

Disclaimer: Bitcoin price articles and markets updates are intended for informational purposes only and should not to be considered as trading advice. Neither nor the author is responsible for any losses or gains, as the ultimate decision to conduct a trade is made by the reader. Always remember that only those in possession of the private keys are in control of the “money.”

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Japanese Police Reveal 669 Money Laundering Cases Tied to Local Exchanges

Japanese Police Reveal 669 Money Laundering Cases Tied to Local Exchanges

Japanese Police Reveal 669 Money Laundering Cases Tied to Local Exchanges

Just recently Japanese investigators revealed they had obtained 669 reports concerning “suspected money laundering” tied to cryptocurrency transactions and domestic digital currency trading platforms. The linked data was derived from investigations spurred by the recent transaction reporting statutes licensed exchanges are required to follow.

Also read: Bitcoin Is Finding Its Way into High Schools

Japanese Police Are Reviewing 669 Alleged Money Laundering Cases Tied to Cryptocurrency Trading Platforms

Japanese Police Reveal 669 Money Laundering Cases Tied to Local ExchangesThis week Japanese police told the press that they are reviewing 669 cases that involve possible money laundering and cryptocurrency exchanges. The cases stem from transactions that took place between April and December of 2017. According to the regional reports, the data came from digital currency exchange ‘transaction reporting,’ a licensed cryptocurrency exchange requirement now tethered to the country’s existing AML/KYC laws.

The National Police Agency did not reveal why exchange operators were triggered to report the latest findings. However, while reporting on the recent investigation, Japan’s Nikkei Asia Review states the outcome was due to:

Questionable transactions repeated frequently in a short span of time.

Japanese Police Reveal 669 Money Laundering Cases Tied to Local Exchanges
There are only 16 licensed exchanges in Japan. The FSA is investigating 32.

Police Report That 2017 Had Fewer Cases Than the Year Prior

The news also follows the recent Coincheck hack where 58 billion yen ($540 million) worth of the cryptocurrency NEM was lost due to a hack. Coincheck was not among the 16 licensed exchanges in Japan and was waiting for licensure approval. 32 cryptocurrency exchange operators have been dealing with the Japanese Financial Services Agency (FSA) a government agency involved with regulations and reporting requirements.

The National Police Agency also explained that suspected money-laundering cases involved with digital currencies have dropped compared to AML/KYC matters found in 2016. Last year there were 400,043 AML/KYC investigations and that metric was 1,048 cases less than the year before.

Additionally, Japan’s police agency says that most of the transaction reporting derived from banks and other types of financial companies. The agency reports that these institutions reported a total of 346,595 cases. Credit card companies and local credit unions disclosed 28,707 cases to the police department.

What do you think about the Japanese police reporting 669 cryptocurrency exchange cases that involve alleged money laundering? Let us know what you think in the comments below.

Images via: Shutterstock, Mahathir Mohd Yasin, Japans NPA, and Pixabay.

At all comments containing links are automatically held up for moderation in the Disqus system. That means an editor has to take a look at the comment to approve it. This is due to the many, repetitive, spam and scam links people post under our articles. We do not censor any comment content based on politics or personal opinions. So, please be patient. Your comment will be published.

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Wendy McElroy: Privacy Is the Virtue That Sparked the American Revolution

Wendy McElroy: Privacy Is the Virtue That Sparked the American Revolution

Privacy Is the Virtue That Sparked the American Revolution

The Satoshi Revolution: A Revolution of Rising Expectations.
Section 2: The Moral Imperative of Privacy
Chapter 6: Privacy is a Prerequisite of Human Rights

Privacy is the Virtue that Sparked the American Revolution, Chapter 6, Segment 2

A general dissolution of principles and manners will more surely overthrow the liberties of America than the whole force of the common enemy. While the people are virtuous they cannot be subdued; but when once they lose their virtue then will be ready to surrender their liberties to the first external or internal invader.

— Samuel Adams

Many people are under attack from an internal invader: their government. Fortunately, history reveals a powerful weapon against the invasion.

Privacy is the revolutionary virtue that caused American colonists to slam the door in the face of British officials, both literally and figuratively. The Third Amendment of the U.S. Constitution prohibits the then-widespread practice of quartering soldiers in private homes, even during peace time, without the consent of owners. The Amendment sounds antiquated to modern ears. But correction of this travesty’s violation of privacy and property was important enough for revolutionaries to rank third in the list of liberties declared by the Bill of Rights. It follows the First Amendment (freedom of speech and religion) and the Second Amendment (the right to bear arms.)

Why? Because the Third Amendment asserted the right of domestic privacy against government intrusion into the most personal of realms – the home. It is the only language in the Constitution that addresses the relationship of the individual to the military, in both war and peace, and it gives priority to the individual. As outmoded as the Amendment may seem, it takes no great leap to apply its underlying principle to the current wars conducted by militarized law enforcement against terrorism and on “treasonous” crimes, such as money laundering. The individual comes first.

The Fourth Amendment also champions privacy. It opens by defending “[t]he right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures.” In terms of crypto-privacy, the important word is “papers.” The reference can be easily extrapolated into the 21st century to cover emails and other computer data. Moreover, the disparate history of how the law has treated “papers” and “effects” reiterates the message of the Third Amendment. When it comes to “papers,” individual privacy prevails. That is, it has until recently.

The Fifth Amendment also asserts the right to privacy by delineating the right of an individual not to bear “witness against himself” in criminal cases.

Fifty-six colonists signed the Declaration of Independence. They knew it was an act of treason, which was punishable by death. If the revolution failed, they would lose their lives, their fortunes, and endanger their families. Even when it succeeded, some paid a terrible price. “Five signers were captured by the British and brutally tortured as traitors. Nine fought in the War for Independence and died from wounds or from hardships they suffered. Two lost their sons in the Continental Army. Another two had sons captured. At least a dozen of the fifty-six had their homes pillaged and burned.” That’s how important the signatories–now called Founding Fathers–viewed the principles of the revolution, including the virtue of privacy.

Privacy was a revolutionary virtue worth dying for.

[Note: this discussion focuses on the U.S., but the principles expressed easily cross national borders and cultures. Also, I do not whitewash the many abuses of the American Revolution; I do not dispute that Loyalists were also colonists; I mean merely to highlight the pivotal role of privacy in the Revolution’s dynamic.]

What a Difference a Word Makes

When government confiscates or surveils smart phones and computers, the purpose is to snatch private information from those devices. In 18th-century parlance, the government seizes your “papers.” Compliant citizens obediently surrender the information on those devices; some even defend the intrusion on the grounds of “security.” Such people have every right to do so; it is their personal information to share or not. But they have no right whatsoever to require anyone else to comply with invasive laws and bureaucrats; they are morally wrong to demonize those who choose not to share. Yet those who say “no” to the gang rape of their privacy are literally treated as criminals.

Happily, history exists. Its invaluable lesson: things were not always this way, and it does not have to be this way now.

The world is experiencing what has been called a “technological crisis in modern legal doctrine.” Namely, the old rules do not always fit the new situation.  Physical-evidence rules do not cleanly apply to digital evidence, and inconsistent rulings by the courts on cryptocurrency further confuse the situation. No one definitively knows the legal status of your crypto-wallet or your private keys. A solution to the growing legal mess may lie in a word within the Constitution, upon which few people remark — “papers.”

Listen to history.

Again, the Fourth Amendment states, “The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.”

Aspects of the Amendment are clear. The government assumes the burden of proof before it can legally violate an individual’s privacy and property, for example. One aspect is commonly overlooked, however. It is the deliberate distinction between “papers” and “effects,” between personal information/expression and personal goods. The common law, upon which Western jurisprudence is based, has traditionally granted far greater protection to “papers.”

Law professor Donald A. Dripps opens his pioneering 2013 essay, “Dearest Property”: Digital Evidence and the History of Private “Papers” as Special Objects of Search and Seizure , with two  questions. “Why does the Fourth Amendment distinctly refer to ‘papers’ prior to ‘effects’? Why should we care?”

Dripps asks because he wishes “to ground special Fourth Amendment rules for digital evidence” within statute law in order to protect “the volume of innocent and intimate information that must be exposed [or demanded] before the criminal material is discovered.” Fortunately, a path forward can be found in the past. In the 1760s, the American colonies reflected “a great controversy over general warrants, libels, and seizure of papers that erupted in England.” The controversy resulted in a complex analysis of privacy.

Returning to the Revolutionary Role of “Papers” in America’s Birth

In 1761, the lawyer James Otis Jr. represented several dozen colonial merchants before the Massachusetts Superior Court. The case challenged the Writs of Assistance used by customs officials. The hated Writs were indiscriminate search and seizure warrants that instructed all local law enforcement to assist customs officials in searching private property for contraband or smuggled goods. The warrants expired only upon the death of the issuing authority, and they were often transferrable.

Otis took the case pro bono. Before a packed crowd, he rose in the Massachussetts State Court House to denounce King George III, the British parliament, and the entire English nation for oppressing American colonists. An impressionable young man in the audience was galvanized by Otis’ five-hour oration and by its passionate message. According to future President John Adams, Otis’ courtroom performance sparked the American Revolution:

“Otis was a flame of Fire!….American Independance was then and there born…. Every man of [the]…crowded Audience appeared to me to go away, as I did, ready to take up Arms against Writts of Assistants [sic]. Then and there was the first scene of the first Act of Opposition to the arbitrary Claims of Great Britain. Then and there the child Independance [SIC] was born. In fifteen years, i.e. in 1776, he grew up  to manhood, declared himself free.”

But colonial politics did not focus upon “papers”–letters, diaries, business records–which were not taxable items under customs law. English politics did.

In the 1760s, warrants for “papers” began to issue in Britain against authors and publishers who were suspected of “libel”–that is, sedition. Entick v. Carrington (1765) was, perhaps, the most influential legal case of the day. The presiding judge, Lord Camden, offered the famous dictim: “If it is law, it will be found in our books. If it is not to be found there, it is not law.” The government’s “right” to seize papers was not in the statutes. Therefore, it was not law.

The bare facts of the case: John Entick was the publisher of a paper that vigorously opposed the Crown. In 1762, the King’s Chief Messenger, Nathan Carrington, and three other officers broke into Entick’s home. They stole hundreds of papers in a search for evidence of sedition. Entick sued. Entick won.

Subsequent analysis of the Entick case revealed four aspects of the government’s action to be legally obnoxious. The warrant was indiscriminate, both in terms of the premises to be searched and the papers to be seized; the seizure expropriated the papers and denied use of them to the plaintiff; the warrant was unregulated because there was no neutral oversight or avenue of appeal; the seizure was inquisitorial because it gave the government information about the private workings of Entick’s mind. The latter point had special weight. Serjeant Glynn, counsel for Entick, declared: “[N]o power can lawfully break into a man’s house and study to search for evidence against him; this would be worse than the Spanish inquisition; for ransacking a man’s secret drawers and boxes to come at evidence against him, is like racking his body to come at his secret thoughts.”

American colonists paid close attention to Entick and to similar lawsuits in Britian. Penning the Fourth Amendment was not far behind.

“Papers” Versus “Effects” Plays Out in Law

Dripps explains, “Although the reception of English law in the newly independent American states was not automatic or uniform, a basic pattern emerged. The Americans adopted the English common law together with statutes in force at the time of Independence, unless the English rule conflicted with a natural right or a state constitution’s declaration of rights.” In short, any judge who considered issuing a warrant for papers ran up against the previously quoted principle of Entick‘s presiding judge; if it wasn’t in the statute books, it didn’t exist under law. Moreover, warrants on “papers” ran afoul of an increasing number of state constitutions.

Dripps continues, “America inherited the common law ban on searches for papers, adopted constitutional provisions that mentioned papers distinctly, and refused to modify the common law ban by statute until the Civil War.” The Civil War cost money, and the excise tax became the federal government’s major source of funding; tax evasion ran rampant. A unique statute was passed. An  opinion in the ensuing Boyd v. United States lawsuit stated, “[This] act of 1863 was the first act in this country, and we might say, either in this country or in England, so far as we have been able to ascertain, which authorized the search and seizure of a man’s private papers, or the compulsory production of them, for the purpose of using them in evidence against him in a criminal case, or in a proceeding to enforce the forfeiture of his property.” Seizure of “papers,” or compelled discovery, was now embedded in statute law.  Apparently, war was not the proper time to debate Constitutional protections.

The issue of “papers” versus “effects” legally zigzagged since the end of the Civil War. Arguably, the most important zig came in 1886, when Boyd was decided by the United States Supreme Court. “The story of the Boyd case,” Drips writes, “properly begins with a statute authorizing customs officers to seize the books and papers of importers suspected of evading taxes.”

Fast forward to an incident at the Port of New York. Customs officials seized 35 cases of plate glass for non-payment of import tax. The government required E.A. Boyd & Sons to produce the relevant invoice in order to fortify its case against the company. Boyd did so under protest, saying the involuntary disclosure was a form of self-incrimination that was prohibited by the Constitution; it also constituted unreasonable search and seizure. In short, the violation of “papers” denied due process. When a lower court backed the government, the case went to the Supreme Court.

The Supreme Court ruled in Boyd’s favor. It stated:

“The principles laid down in this opinion affect the very essence of constitutional liberty and security. They reach farther than the concrete form of the case then before the court…; they apply to all invasions on the part of the government and its employees of the sanctity of a man’s home and the privacies of life. It is not the breaking of his doors and the rummaging of his drawers that constitutes the essence of the offense; but it is the invasion of his indefeasible right of personal security, personal liberty, and private property, where that right has never been forfeited by his conviction of some public offense, it is the invasion of this sacred right which underlies and constitutes the essence of Lord Camden’s  judgment.”

The Boyd ruling reinstated greater Constitutional protection to “papers” than to “effects.” It also bears directly upon digital “papers” or information. The protection was never absolute, however, and it has been severely eroded in the last several decades.  Dripps explains, “[D]uring the last quarter of the twentieth century, the Supreme Court began effectively to equate ‘papers’ and ‘effects’. Another line of modern cases established ‘bright-line rules’ that  gave the same constitutional treatment to all ‘effects’.” In short, “papers” not only lost their special status under common and Constitutional law, they also became legally interchangeable with every other “effects.” Nevertheless, the precedent of Boyd prevailed for almost a century, and it is not toothless now.


Digital information was born into a new age of inquisition, in which privacy is viewed as guilt. Dripps observes, “Today, federal agents may obtain warrants to seize and carry away entire troves of digitally stored private papers and peruse those files at remote locations, one by one….[What] the common law condemned as a relic of the Star Chamber, and what no American legislature authorized for the first eighty years of Independence, has become standard law enforcement procedure.” Extracting private information used to require torture or other flexing of muscle. Today, the violation is so politically sanitized that it can be invisible and easy to ignore.


It has not always been this way, and it does not have to be this way.

Government wants people to believe that privacy is the antechamber of crime, a refuge for miscreants, and a danger to the innocent. The opposite is true. Privacy is a virtue upon which due process, freedom, and personal lives are built. Privacy is at the core of what it means to be human, because the essence of privacy is the individual mind as it assesses and experiences life.

The surest protection of privacy is to do exactly what government fears. Assert it; celebrate it; understand its pivotal importance to freedom. Do not respond to the spine-chilling demand — “Your papers!”

[To be continued next week.]

Reprints of this article should credit and include a link back to the original links to all previous chapters

Wendy McElroy has agreed to ”live-publish” her new book The Satoshi Revolution exclusively with Every Saturday you’ll find another installment in a series of posts planned to conclude after about 18 months. Altogether they’ll make up her new book ”The Satoshi Revolution”. Read it here first.

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What to Expect When You Order a Hardware Wallet

What to Expect When You Order a Hardware Wallet

What to Expect When You Order a Hardware Wallet

Over the past few months, well known hardware wallet manufacturers have been swamped with sales during and after the holiday season. Hardware wallet deliveries have been backed up and some people have had to wait weeks to get direct shipping from source manufacturers. Much of the demand has stemmed from the typical holiday season, but also because digital assets have gained a lot in value during the course of 2017 and into the new year.

Also read: Indians Look to Buy Bitcoin Overseas as Regulations Tighten  

Satoshi Labs Discloses the Company’s Processing and Shipping Procedure

This week the Prague-based hardware wallet manufacturer, Satoshi Labs, told the public how a Trezor order is processed utilizing the utmost security practices. The company explains that it puts a lot of focus on the procedure of shipping items that will store valuable cryptocurrencies after being sold and shipped.

What to Expect When You Order a Hardware Wallet

A lot of digital asset investors use hardware wallets to store their cryptocurrencies in a safer location. Most of the reputable hardware wallets are known for having very little vulnerabilities and most of the vectors are due to Man In The Middle (MITM) attacks. MITM attacks consist of an attacker obtaining a relay of the device’s private keys whether it be from extraction or during the shipping process. Satoshi Labs says that when it comes to the processing and shipping of every Trezor order the firm takes security very seriously. The team explains this week that since the company is very transparent with disclosures, and open source code they feel its only right to detail the shipping process and its delivery methods.

After receiving a payment for a new Trezor device, the company prepares to ship the unit and uses the company DHL as its default shipping service. Satoshi Labs also offers delivery by standard post which can be a much slower delivery time depending on the customer’s location. The first part of the processing begins with a logistics team that inspects the goods for a proper seal and makes sure the product is ready for delivery.

Satoshi Labs emphasizes Trezor devices do not have firmware loaded on the device when they are shipped. The device only runs signed firmware verified by a write-protected bootloader and when downloading further firmware updates the device will warn you if the protocol is not correctly signed. Satoshi Labs details that the case is also ultrasonically welded which means if the exterior is broken the device will be difficult to restore.    

If Ledger Wallet Went Out of Business “It Would Only Be An Inconvenience”

What to Expect When You Order a Hardware WalletLedger Wallet has also described in the past how its company protects the security of its devices. The company headquartered in France says that the hardware protocol used in its products uses a “decentralized wallet system.” Much like Trezor, the Ledger Wallet generates private keys during the initialization process and the keys are then stored on a secure ship within the confines of the products shell.

“Ledger never has the opportunity to make a copy of your private keys,” the company explains.

What to Expect When You Order a Hardware WalletBoth Ledger Wallet and Trezors use passphrase seeds (a sequence of 24 random words) during the initialization process which can be used for key restoration. This means if you lose your hardware wallet or the device gets damaged or stolen the seed phrase can be used to access the cryptocurrencies held on the device. Further, these seeds can be utilized to obtain the digital assets using another wallet as well just in case the company closed up shop and ran off into hiding. Ledger Wallet details how customers could handle the situation if the company went out of business.    

If Ledger shuts down all its activities, the Ledger Chrome app will most probably stop to function as our API servers would be stopped,” the company states on its website.

However, this would only be an inconvenience, as your bitcoins would stay completely safe so long as you have your 24 words recovery phrase. With your recovery sheet and your 24 words, you can anytime restore your balance to another BIP 39.

Responsible Disclosures and Bounties

A hardware wallet’s key generation and the shipping process are very important subjects to customers especially when it comes to storing precious cryptocurrencies. These companies also disclose possible MITM vulnerabilities and offer bounties to the community for testing their products for weaknesses. It’s also good to know that if the manufacturers go out of business you can restore your cryptocurrencies without the devices or using the company’s wallet software. Anyone can test their seeds out today with another wallet just to make sure.

What do you think about the manufacturing process and shipping procedures when it comes to hardware wallets? Do these things matter to you when buying a device like this? Let us know what you think in the comments below.

Images via Shutterstock, Pixabay, Ledger Wallet, and Satoshi Labs.

Need to calculate your bitcoin holdings? Check our tools section.

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Gifting Bitcoin Is One Way a Person Can Avoid Paying Crypto-Taxes

Gifting Bitcoin Is One Way a Person Can Avoid Paying Crypto-Taxes

Gifting Bitcoin Is One Way a Person Can Avoid Paying Crypto-Taxes

After the newly written U.S. tax laws recently passed, cryptocurrency investors realized the tax-free exemption filing 1031 for IRS reporting is no longer applicable to their digital asset investments. The law also implies that a lot of people will have to pay taxes on every single transaction they processed throughout the past twelve months. However, there is one loophole available to cryptocurrency investors, but it involves gifting the funds to another person or charity.

Also read: How Dorian Nakamoto Became Satoshi Nakamoto

Gifting Cryptocurrencies: The Only Crypto-Tax Loophole

Gifting Bitcoin Is One Way a Person Can Avoid Paying Crypto-Taxes
Robert Wood of Wood LLP.

The U.S. government is concerned about getting its taxes from American citizens who have invested in cryptocurrencies. Last year the IRS started to probe businesses that deal with digital assets like the exchange Coinbase. For the moment the tax agency is looking for individuals and groups who have spent over $20,000 using Coinbase. Following this initial probe, the San Francisco exchange has started to send customers the IRS tax form 1099-K. Additionally, investors have realized that 1031 tax-free exchanges won’t apply to digital currencies, and every transaction is also considered a taxable event.

Although, giving bitcoin as a gift is one way investors can avoid paying taxes on their cryptocurrency gains. Gifting money has to be more aligned with donating the funds as opposed to an employee bonus, and there is a fine line between the two financial events. According to Robert Wood, a tax lawyer based in San Francisco, an individual can gift up to $15,000 without documenting the transaction.  

“If you give crypto to a friend or family member — to anyone really — ask how much it is worth. If the gift is worth more than $15,000, it requires you to file a gift tax return,” explains Wood.   

For 2018, $15,000 is the amount of so-called “annual exclusion.” You can give gifts up to this amount each year to any number of people with no reporting required.

U.S. Citizens Can Gift $11.2 Million Per Lifetime

Gifting Bitcoin Is One Way a Person Can Avoid Paying Crypto-Taxes
Dorian Nakamoto was gifted 67 BTC ($669,000 USD) after he was accused of being Satoshi Nakamoto.

Wood details that the gift doesn’t trigger income tax requirements for both the giver and the recipient. If the recipient calculates gains or losses (cashes out) from the gift in the future, then the funds will be taxable based on the value the day the gifting happened. Wood details that documenting the gift is helpful because donating money is often written off improperly. If the donation exceeds $15K, then U.S. residents are required by law to file a ‘gift tax return.’ “For 2018, $15,000 is the amount of so-called ‘annual exclusion,’” Wood details.

Further, Wood explains that in 2018 the amount a person or married couple can give per lifetime has increased quite a bit. According to the tax attorney, a person can gift up to $11.2 million tax-free during their lifetime, and married couples can gift up to $22.4Mn. If the individual gives the money to a recognized  501(c)(3) charity, they can get an income tax deduction for the spot value of the digital asset at the time of filing.

A few years ago Dorian Nakamoto was accused of being the ‘real’ Satoshi Nakamoto, and he received thousands of dollars worth of bitcoin. If Dorian kept track of the cost bases across all the bitcoin donations, he received he may have been able to claim the contributions as tax-free gifts. However, if he treated the gifted funds as ordinary income, his gifts would face significantly higher tax rates for his gains.

What do you think about gifting people bitcoin? Do you think this is a good way to avoid paying taxes? Let us know in the comments below.

Images via Shutterstock, Pixabay, Forbes, and Wood LLP.

Do you like to research and read about Bitcoin technology? Check out’s Wiki page for an in-depth look at Bitcoin’s innovative technology and interesting history.

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Austria Wants to Regulate Bitcoin like Gold and Derivatives

Austria Wants to Regulate Bitcoin like Gold and Derivatives

Austria Wants to Regulate Bitcoin like Gold and Derivatives

Austria Finance Minister Hartwig Löger is urging both his country and the broader European Union to treat cryptocurrencies such as bitcoin in a regulatory fashion as they do now with regard to gold and derivatives.

Also read: How To Regain Control From Nanny Zuck

Austria Floats Ideas About Bitcoin Regulation

“The cryptocurrencies are in the process of massively damaging the reputation of the financial market,” Mr. Löger insisted, “and jeopardizing the reputation of a young but very important sector for the financial market of the future,” arguing it will be a challenge to both regulate and allow for the nascent industries to grow.

He went on to suggest financial experts and even the financial technology sector have both warned Oesterreichische Nationalbank, Austria’s central bank, and the country’s Financial Market Authority (FMA) about cryptocurrency’s danger, asking for regulation. The local press even used the verb “demanded.”

Austria Wants to Regulate Bitcoin like Gold and Derivatives
Hartwig Löger

Mr. Löger continued, “Cryptocurrencies are significantly gaining importance in the fight against money laundering and terrorism financing. That’s an important aspect for the changes we support. We need more trust and more security.” Among his recommendations is to treat bitcoin “similar to the trade in gold and derivatives,” including mandatory anti-money laundering (AML) reporting crypto transactions of more than €10,000.

Mr. Löger, 52, and his statements were openly welcomed by the Austrian FMA in a parallel statement released the same day, 23 February. “The Board of the Austrian Financial Market Authority (FMA), Helmut Ettl and Klaus Kumpfmüller, welcome the move by Finance Minister Hartwig Löger to subject cryptocurrencies such as Bitcoin to regulation and supervision.” Worriedly, the Board of Management stressed, “Since digital currencies are essentially a phenomenon of the Internet and are offered there without limits, regulation and oversight of cross-border cooperation are also of great importance.”

Austria Wants to Regulate Bitcoin like Gold and Derivatives

ICOs, Prospectus, and a New Council

His proposals would further empower the country’s Money Laundering Registration Office of the Federal Criminal Police Office in identifying holders of crypto, placing exchanges under the auspices of the FMA. Mr. Löger’s comments were not fixated solely on bitcoin, however, as he also addressed initial coin offerings (ICOs). All ICOs would be subject to registration requirements and would be required to offer something like a “digital prospectus.”

The borderless aspects so befuddling regulators when it comes to bitcoin are to be considered this March with the advent of a Fintech Regulatory Council. Reports suggest it will be comprised of experts who “consider regulatory approaches and coordinate the positions of various institutions” in an effort to reconcile wider “European initiatives…with national policies.”

Austria Wants to Regulate Bitcoin like Gold and Derivatives

Experts expect Mr. Löger’s will bring his case to Portugal’s Mario Centeno when the two meet as part of Eurogroup this weekend. EU Commission meetings on Monday will consider cryptocurrencies in relation to the European Money Laundering Directive.

What do you think about Austria’s plans? Let us know in the comments section.

Images courtesy of Pixabay.

Need to calculate your bitcoin holdings? Check our tools section.

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Bitcoin Hardware Manufacturer Bitmain Made a Profit of up to $4 Billion Last Year

Bitcoin Hardware Manufacturer Bitmain Made a Profit of up to $4 Billion Last Year

Bitmain Made a Profit of Up To $4 Billion Last Year

The wealth of bitcoin mining titan Bitmain has long been assumed to be north of “huge”. Thanks to its near-monopolization of the ASIC manufacturing business, Bitmain has effectively had a license to print money. This week, Bernstein analysts released a report into Bitmain’s operations. It estimates the Chinese firm to have made $3-$4 billion last year from mining cryptocurrency and for selling the equipment for others to do the same.

Also read: Montana Scores $250 Million Bitcoin Mining Campus

Big Bucks for Bitmain

Ask any serious cryptocurrency miner what brand of ASIC they use and you’ll be greeted by the same two-syllable reply. Bitmain isn’t just the main player in the mining game – it’s pretty much the only one for miners seeking to make a living from their trade. Bitmain is a controversial company for a number of reasons, including its dominance of the bitcoin mining game, which goes against the principles of decentralization. Its mining units are prized, however, for their robustness, effectiveness, and consistent performance.

If Bernstein’s figures are accurate, Bitmain pulled in the same amount as Nvidia last year. Yet while Nvidia is a household name, few people outside of the cryptocurrency space have even heard of Bitmain. Bernstein calculates Nvidia to have made $3 billion in 2017, but points out that it took 24 years for the company to attain that profit level; Bitmain has achieved the same feat in just four years. Neither Jihan Wu or Micree Zhan featured in Forbes’ recent Crypto Rich List, yet there is no doubt that Bitmain’s founders are very wealthy men.

Bitmain Made a Profit of Up To $4 Billion Last Year
Bernstein’s report highlights in grey, in the diagram, where Bitmain made its money

Perseverance Pays Off

While critics may resent the stranglehold their company has over cryptocurrency mining, Wu and Zhan have earned their reward for starting their business when bitcoin was still unfashionable, in 2013, and staying the course. The bulk of the company’s profits came in the past 12 months, as the price of bitcoin soared. For most of this period, Bitmain insisted on taking payment in bitcoin only, and later in bitcoin cash.

Bitmain CEO Jihan Wu
Bitmain CEO Jihan Wu

Bitmain is a company of a few words, preferring to let its hardware do the talking. Predictably, it had nothing to say in response to Bernstein’s report and earnings estimate. According to Bernstein, Bitmain’s dominance of bitcoin mining and ASIC manufacture stands at around 70%. One of the reasons why Bitmain has been so immensely profitable is that it has been able to hike the price of its Antminers in response to bitcoin’s rise, while the manufacturing costs have remained the same. As a result, a single Antminer went from a few hundred dollars to a peak of $5,000 last year.

The report went on to predict that Bitmain will further increase its dominance of the mining business this year, noting “Bitmain will likely lead the cryptocurrency asic industry and migrate some of its chips to 10nm and the most advanced 7nm. That will make the company one of the top five users of TSMC’s 7nm in 2018, with demand comparable with Qualcomm’s, HiSilicon’s, or AMD’s.”

Do you think Bitmain’s dominance of the mining business is unhealthy? Let us know in the comments section below.

Images courtesy of Bitmain and Bernstein.

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Finance Ministry Employees Caught Mining Cryptos in Kazakhstan

Finance Ministry Employees Caught Mining Cryptos in Kazakhstan

Finance Ministry Employees Caught Mining Cryptos in Kazakhstan

The Ministry of Finance in Kazakhstan has announced measures to improve security and oversight in its IT department after catching four employees mining cryptocurrencies on its servers. Joking that the miners have taken over the central bank’s main duty – money emission, a deputy called for crypto regulations. The National Bank is actually working on proposals to regulate the crypto sector.   

Also read: Kazakhstan, Kyrgyzstan, and Uzbekistan on the Crypto Radar

State Computers Used to Mint Digital Coins

IT specialists working for the Finance Ministry in four different regions of Kazakhstan have been implicated in using government hardware to mine cryptocurrencies. They were employed by local offices of the ministry’s Department of State Revenue, investigators said, quoted by Tengrinews. The miners have been exploiting the servers of the tax authority and the most powerful personal computers available to employees.

Finance Ministry Employees Caught Mining Cryptos in Kazakhstan“They have secretly installed mining software, which significantly decreased the speed of information processing and slowed down government computers”, Kazakhstan’s National Security Committee (KNB) said in a press release. “These programs have been added to the exceptions lists of antivirus applications”, the agency explained.

“Criminal investigations have been launched against four employees of different regional divisions. KNB is in charge but we have started an internal inquiry, as well”, said Ardak Tangebaev, head of the Department of State Revenue. “We are going to tighten control over our IT departments”, he added.

The employees have been charged with “impeding the work of information systems and telecommunications networks” and “creation, use or distribution of malicious computer programs and software products”. It is quite obvious that the current articles of the penal code do not specifically cover crypto-related crime.

“Mining Under Your Nose”

Kazakhstan’s financial authorities have been criticized for slowing down the introduction of regulations in the cryptocurrency sector. A deputy joked that the IT workers at the Finance Ministry have taken over one of the main responsibilities of the National Bank – emitting money. “They are mining under your nose and prosecutors have no idea about what charges to raise”, Gleb Shchegelskiy said, calling for crypto regulations in Kazakhstan.

The central bank is actually working on a set of legislative proposals. New restrictions on operations with cryptocurrencies, like bitcoin, and their exchange with the local fiat tenge are to be imposed soon, according to NBK’s chairman Daniyar Akishev. “The situation indicates a necessity to toughen the requirements for the use of cryptocurrencies. We believe it is expedient to introduce legal restrictions”, he said, quoted by Kaztag.

The measures are expected to affect cryptocurrency transactions and payments. Akishev added that the “appropriate amendments” are currently being prepared. Like many of his colleagues around the world, he warned Kazakhs about the risks of investing in cryptocurrencies.

A Look on the Bright Sight

Despite all that, Kazakhstan remains a country with long-standing ambitions to become a crypto hub in the region. Last year Astana announced intentions to create “the most favorable business climate” for fintech companies with a “highly progressive regulatory framework”. In 2018 the country’s leadership called for the launch of a “democratic, transparent and global cryptocurrency… backed by assets”. Kazakhstan’s financial authorities, however, are still struggling to grasp the realities of a rapidly developing crypto industry, justifying the latest criticism.

Finance Ministry Employees Caught Mining Cryptos in Kazakhstan

More than 1,000 investors, miners, startups and representatives of the blockchain industry took part in Cryptoconference-2018 in Almaty last week and shared their expectations for the near future. “If 2017 was the year of ICOs, 2018 will be the year of regulation”, Streamity’s representative Sergey Kolomiets told Tengrinews. The president of the Kazakhstani Association of Blockchain and Cryptocurrencies, Eset Butin, confirmed his prediction: “I think China is never doing anything just like that. In 2018 the PRC will decide about the crypto sector”. Participants in a panel discussion on the regulatory challenges in the Commonwealth of Independent States agreed that the industry needs regulations, not restrictions.

Do you think government institutions will one day use the excess capacity of their servers to mine cryptocurrencies? Tell us in the comments section below.

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Montana Scores $250 Million Bitcoin Mining Campus

Montana Scores $250 Million Bitcoin Mining Campus

$250Mil Bitcoin Mining Campus Calls Butte, Montana Home

The Big Sky Country state of Montana keeps raking them in. For the second time this month, a mining operation is announcing its moving to the Butte area. Power Block Coin LLC is reportedly plunking down a quarter of a billion dollars to upgrade existing facilities to mine the world’s most popular cryptocurrency, bitcoin.

Also read: How To Regain Control From Nanny Zuck

$250 Million Bitcoin Mining Campus Calls Butte, Montana Home

The Montana Standard reports, “A company called Power Block Coin, LLC, plans to invest $251 million in capital improvements over 36 months in Montana Connections, a special tax district west of Butte.”

“Earlier this year, we started receiving inquiries from blockchain miners interested in low cost electrical capacity,” explained Aaron Tilton, CEO of Blue Castle Holdings, the parent company of Power Block Coin, LLC. “Not just any electrical capacity, all electricity is not created equal. Blockchain mining power has to be globally cost competitive, readily available and quickly scalable. It also has to have the right power load profile, accompanied with dependable existing infrastructure, at the appropriate locations,” Mr. Tilton said at the end of last year.

$250Mil Bitcoin Mining Campus Calls Butte, Montana Home

Blue Castle is a Utah-based holding company best known for its work in nuclear power plant energy development. Moving into the cryptocurrency mining space “was a great fit for us, we are already doing this type of development. We are currently selling the right kind of low cost installed capacity to miners via bilateral contracts. Therefore, a good portion of the power can be put to use before our peer-to-peer, spot market Power Block Exchange platform goes live in the 2nd quarter of 2018. 500MWe is roughly enough power to supply the global Ethereum network or about one fifth of the global Bitcoin network,” Mr. Tilton insisted.

That Q2 forecast appears to be on track, as Butte-Silver commissioners voted to develop data centers in what’s known as Montana Connections, described as “a special tax finance district west of Butte.” Over two years and two phases, the hope is online 135 megawatts of power through infrastructure such as a substation and up to “200 separate units that would use large amounts of power, which would be transmitted through the new substation. Those units could be anything from larger warehouse buildings to small shipping containers,” according to The Montana Standard.

Montana’s Quiet Bitcoin Mining Revolution

Not all locals are exactly excited about bitcoin mining centers growing in their city. Worries about officials getting carried away with a fad, handing over valuable land to an industry where the product can jump wildly in price – not to mention nearly every financial expert has accused crypto of being a scam of one kind or another.

For his part Mr. Tilton responded, “Bitcoin is the fastest growing segment of cryptocurrency. If it tanks, the same processors can be used for medical research or AI (artificial intelligence).” He also suggested nearly 50 people will eventually be employed at the campus, with salaries averaging roughly $40,000.

$250Mil Bitcoin Mining Campus Calls Butte, Montana Home
Aaron Tilton

Mr. Tilton also said whatever extra energy generated could be sold to local businesses, and that the first data center, all things considered, should be up and running by Fall of this year. A county administrator doubled down on Mr. Tilton’s optimism: “Power Block Coin has to invest their money, build a substation, they’ll be a big power user. It’s not just a bitcoin facility. We’re not buying into bitcoin. They’re an aggregator, a campus to allow additional users to come in and use power.”

Whatever the eventual outcome, Montana is quietly growing a crypto mining empire of sorts. As reported in these pages mere weeks ago, a nearby Montana community sealed a $75 million mining deal with Crypto Watt, LLC to resurrect 53 acres. That followed “Project Spokane, LLC launched its site near Missoula. It’s already one of the largest energy consumers in the region, housing a 20 megawatt facility, employing at least 25 locals.” This will be the third such operation, each one larger than the next, in two years.

What do you think of more mining data centers opening? Let us know in the comments section below.

Images courtesy of Pixabay, Power Block.

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