Bitcoin Taxation: A Gift From The IRS And The Coffee Problem - InformationWeek

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Bitcoin Taxation: A Gift From The IRS And The Coffee Problem
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Brian.Dean
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Brian.Dean,
User Rank: Ninja
1/5/2015 | 2:09:38 PM
Re: Bitcoin Revisited
@Daniel, thank you for that insight. I had only heard of Bitcoin and Litecoin. However, with a quick Google search they are more than 500 crypto currencies that are showing up.

Bitcoin's algorithm executes the slowest on CPUs, it's relatively better on GPUs and specialized ASIC deliver the best results. If any of the 500 crypto currencies had an encryption method that executes best on general purpose CPUs and the world shifted to crypto currencies, it would be interesting to see the changes in the general price level of computational power.  
Ariella
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Ariella,
User Rank: Author
1/5/2015 | 8:53:56 AM
Re: Bitcoin Revisited
@danielcawrey Mining bitcoin now requires so much computational power that people buy special rigs and often work together in pools that work together to reveal the caches of digital currency. But there is already a lot of it in circulation. And if it were used as a real currency, meaning people don't immediately change it to dollars or euros but just spend the bitcoin directly, it shouldn't incur that kind of taxation.
danielcawrey
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danielcawrey,
User Rank: Ninja
1/4/2015 | 8:51:55 PM
Re: Bitcoin Revisited
At this point, mining in not really possible on a small scale in bitcoin. There are alternetive cryptocurrencies available on the market where you could possibly mine with a computer CPU, but many of them are not sound investments because the people behind them are essentailly running pump and dump scams. 
Brian.Dean
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Brian.Dean,
User Rank: Ninja
1/4/2015 | 6:38:23 PM
Bitcoin Revisited
The last time I research bitcoin mining was in late 2013, at the time E-sports Entertainment was fined $1 million, for infecting user computers with mining software. If I recall correctly, at the time the cost (in terms of compute resources + electricity) and hash rate were such, that the possibility to earn a profit was remote. If things have changed then it would be interesting.

Nevertheless, it is extremely interesting to ponder about a situation in which mining is profitable on a small scale, with a global view in which different economic regions all having a slightly different rate of energy.


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