|From: Graystone||3/25/2021 1:29:26 PM|
Decentralized finance is going to take some getting used to.
I am currently staking a liquidity token and gathering another token for doing so.
The token I staked to the liquidity pool used to have no value at all.
The staking involved placing a crytpocoin paired with the token into a pool.
The pool then issues a new token, representing a share of the pools liquidity.
The new token (representing the other token paired with the crytpocoin) is the one that can be staked.
It takes a lot of getting used to these ideas and a lot of practice.
There are over 4,300 active current crypto projects involving a number of brand new ideas.
Everyone has a favourite idea, and decentralized finance may be here to stay.
A satoshi still isn't much money, one US penny is still worth a few satoshis.
My original tokens, which were valueless, have become worth about one US penny. (20 sats)
The original cryptocurrency I paired with the token is worth about 00.35USD. (700 sats)
There is a lure for every fish and we are all fish, it is just the way things work.
And if you are the fisherman the lures are obviously lures, it is always clear.
The lures differ depending on what fish you want to catch, but we can all be the fish.
I recently fell for a simple lure, crafted to catch a fish like me.
I saw the lure through a tweet I was sure to notice pointing out the site and extolling the promotion.
The promotion was timed to the last price surge and crafted to seem reasonable to some.
Over a period of a few hours a well known figure was airdropping his crytpocoin.
If you passed a certain amount of coins they would be doubled and returned until the pool was dry.
It seems stupid that I feel for it in retrospect but it all happened quickly.
If you have ever been involved in major airdrops or a contentious hard forks it is an exciting time.
That is what they exploited in making their lure and creating the fake traffic on the chain.
The site used for the scam is now gone, it looks like a Russian ploy but that could just be cover.
The site was ltc2.net
You can see it is deserted today but anything on Medium should have been suspect.
A track record is one of the most valuable things any cryptocurrency team can possess.
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|To: Savant who wrote (2694)||3/25/2021 3:48:55 PM|
|Keep good records|
There are very few jurisdictions where small miners can make money, electricity is expensive.
What you can do is mine, turn some electricity into crypto, you can mine many types of crypto.
Most of the mining that you undertake will generate tokens and cost you electricity and wear and tear.
Like any other businessman you have costs and a product that you create.
Rewards when mining might be many small amounts multiple times a day.
That product has a value when you tender it at an exchange, that conversion sets the USD value.
The rate is always between the pairs you utilize in exchanging, most cryptocurrencies have no USD pair.
When it comes to alt currencies that you can mine at home with a GPU,there are fewer choices.
Whatever you use to assign a value, your mining effort has costs and is sold via a pair.
When you sell what you mine it is almost always via a BTC pair.
And what you mine might make you a customer of a certain exchange.
In the past crypto you owned might make you a customer of certain exchange.
Anyone active in crytpo will have to adapt to the idea of Uniswap, it is a huge plan.
My accountant will only have to deal with my losses, they far exceed my gains.
Directly though I am staking two things that have a USD value that can be derived from uniswap markets.
The tokens that I am actually staking are simply a representation of that value.
The tokens I am earning have a lineage but are not represented, even on a uniswap market, yet.
At the time of their receipt they have no equivalent value in any pair on any exchange anywhere.
They are legitimate contracts on a chain and they create depth, the splendor is all in the plan.
Right now I am paying to create crypto coin with my miners, it costs me money.
I have lost everything I mined over years through a brokerage hack (Cryptopia).
I keep wallet passwords, the transactions are all on the chain, record keeping is part of the wallet.
I have many exchange accounts, I have been scammed often.
I have never held a lot of tokens before putting them through an exchange (I use Bittrex)
I have a fiat link back to my RBC account, I used Coinbase for awhile years ago, but today Bittrex.
When I am exchanging tokens using uniswap or decentralized exchanges the pairs have a USD value.
I do my best to try and keep up but I am way out on the fringe of what you think of when you think of bitcoin.
There are so many types of tokens offering real utility that the ball will be in the air awhile I think.
At some point true usability will appear, likely a token coupled with phones and QR codes and Pay.
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|From: Glenn Petersen||3/26/2021 10:30:53 AM|
|Bitcoin sleuthing start-up Chainalysis doubles valuation to $2 billion with Benioff backing|
PUBLISHED FRI, MAR 26 20219:30 AM EDT
UPDATED FRI, MAR 26 20219:48 AM EDT
Ryan Browne @RYAN_BROWNE_
-- Chainalysis, a start-up that sells blockchain data analytics tools, has doubled its valuation to $2 billion in a new investment round.
-- The round was led by crypto-focused venture capital firm Paradigm, with additional backing from Salesforce CEO Marc Benioff
-- .Michael Gronager, Chainalysis’ CEO, said the company’s latest round came at a time of heightened momentum for cryptocurrencies.
Chainalysis, a start-up that sells blockchain data analytics tools, announced Friday that it’s raised $100 million in an investment round valuing the company at $2 billion.
That’s double what Chainalysis was worth just four months ago. The round was led by crypto-focused venture capital firm Paradigm, with additional backing from Salesforce CEO Marc Benioff, who invested through his investment fund Time Ventures. Existing shareholders Addition and Ribbit increased their holdings, Chainalysis said.
Unlike some in Silicon Valley, Benioff hasn’t been that vocal about bitcoin. However, Time Magazine — which the billionaire bought last year — recently posted a job listing for a chief financial officer who is “comfortable with bitcoin and other cryptocurrencies.” Benioff declined to comment on his views about bitcoin when asked by CNBC.
What is Chainalysis?
Founded in 2014, Chainalysis helps governments and private sector companies detect and prevent the use of bitcoin and other cryptocurrencies in illicit activities like money laundering with its investigations and compliance software. The New York-based company competes with Ciphertrace, which is based in California, as well as London-headquartered firm Elliptic.
Chainalysis, Elliptic and CipherTrace aim to legitimize the cryptocurrency market, which has been fraught with high-profile hacks and other illicit activities. Last year, Chainalysis helped track down $1 billion worth of bitcoin linked to the darknet marketplace Silk Road, which was then seized by the U.S government.
Michael Gronager, Chainalysis’ CEO and co-founder, told CNBC that the company’s latest financing round came at a time of heightened momentum for cryptocurrencies, with institutional investors and companies like Tesla piling into bitcoin.
“When we raised our last round, we were basically seeing a lot of that in its infancy,” Gronager said in an interview. “What we see right now is that the market is growing and that some often traditional players are embracing crypto in a way that we haven’t seen before.”
“What has changed over the last four months is the opportunity and the speed by which we will grow into more customers and more revenue has simply gone up,” Gronager added. “That means we need to do a lot more building now.”
Chainalysis said its annual recurring revenue more than doubled over the past year — without disclosing an exact sum — while its client base has also doubled. The company now has 233 employees, according to LinkedIn, and plans to use the fresh cash to hire hundreds more.
Is bitcoin becoming mainstream?
Major Wall Street players have warmed to bitcoin in recent months as the cryptocurrency’s price surged to new records. Goldman Sachs restarted its cryptocurrency trading desk earlier this year, while Morgan Stanley last week became the first U.S. bank to offer wealth management clients access to bitcoin funds.
Bitcoin notched a fresh record price of more than $61,000 earlier this month. It’s currently trading around $53,000, yet is still up around 80% so far in 2021. Some investors say it’s appealing as an asset thanks to its scarcity, with total supply capped at 21 million units, and it’s also seen as a potential hedge against inflation.
Still, skeptics question the sustainability of bitcoin’s rally. The digital coin has been known to be wildly volatile in the past, having once climbed to almost $20,000 in 2017 before plunging 80% the following year. Meanwhile, officials like U.S. Treasury Secretary Janet Yellen and European Central Bank President Christine Lagarde have sounded the alarm about bitcoin’s use in illegal transactions.
“We are involved in conversations with regulators in the U.S. and the rest of the world,” Gronager said. “What is important to note is that this space has changed a lot and the amount of criminal activity is dropping a lot. It’s getting more and more legitimate use cases.”
Illicit activity made up just 0.34% of all cryptocurrency transaction volume last year, according to a report from Chainalysis, down from roughly 2% a year earlier. However, ransomware incidents — where hackers encrypt files and then demand a ransom to restore access — increased by 311% year over year as criminals exploited people working from home during the pandemic.
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|From: Glenn Petersen||3/28/2021 3:57:32 PM|
|BitClout Has Reaped $160M for Tokens Pegged to Celebs. Is It All a Scam?|
Some people are calling BitClout "Bitconnect 2.0".
By Robert Stevens
7 min read
Mar 19, 2021
Amid a white-hot craze for NFTs, a firm called BitClout is pitching itself as a "crypto celebrity network." The site offers consumers the opportunity to purchase tokens tied to the identities of 15,000 influential Twitter accounts, including the likes of Elon Musk and Katy Perry—albeit without their permission.
In the space of a week, BitClout has reportedly earned $160 million and attracted the interest of prominent investors and cultural figures. But already, crypto security firms are pointing to suspicious transactions patterns, and warning the site has all the appearances of a scam.
If BitClout is indeed a swindle, it would underscore how a new generation of crypto technology—this time NFTs—has given rise to new breeds of scammers.
Bids for an NFT of Jack Dorsey’s first tweet recently reached $2.5 million. Such prices have touched off a race to tokenize Twitter artifacts of all sorts. In the case of BitClout, the site has downloaded 15,000 of the most popular Twitter profiles and then assigned thousands of cryptocurrency tokens to each of them. The price of the tokens are loosely pegged to a given profile’s relative popularity—meaning that investing in the tokens is like investing in the social ranking of a given celebrity.
Meanwhile, an influencer who tweets about the site can claim a portion of the tokens associated with their identity. Elon Musk is theoretically entitled to $2.96 million worth of BitClout’s Elon Musk tokens, while lesser lights can redeem several thousand dollars.
Minor celebrities who have tweeted about BitClout include Neil Strauss, author of a controversial pick-up artist book:
BitClout appears to be an attempt to co-opt Twitter’s social media feed, operating in the same way Steemit provides a crypto version of Reddit and Voice.com maps Facebook onto a blockchain.
For those seeking to participate in BitClout’s marketplace, a necessary first step is to buy BitClout tokens with Bitcoin. And that has already given rise to a big red flag about the site: Namely, Blockchain explorer tools show that the funds ended up at just one address before getting transported across the cryptoverse.
Rich Sanders, who runs blockchain investigation firm CipherBlade, confirmed to Decrypt that almost all of the funds on the site are going to three exchanges—88.41% to Amber Group, 11.17% to Kraken, and 0.42% to Coinbase—and that the funds have since moved to other exchanges and wallets.
And one of the only non-exchange addresses that BitClout paid directly received money from Hydra, a darknet market. In other words: “They paid someone sketchy,” said Sanders.
Flow of transactions from BitClout’s wallet.
Signs point to the address being owned by a suspect individual from Nigeria, whom BitClout may have paid to drum up the Twitter bots to promote the project on social media, said Sanders. “Because social media shills = more proceeds.” Decrypt reached out to a Twitter account bearing BitClout’s name but received no reply.
Meanwhile, London-based Coinfirm, which specializes in tracing suspect crypto transactions, has also raised alarms about BitClout. In an interview with Decrypt, Coinfirm executives described the site as “ Bitconnect 2.0”—a reference to a notorious Ponzi scheme site whose tokens reached a value of nearly $400 during the crypto mania of 2017. Today, those tokens are worthless.
Where’s my money?
Although you can supposedly buy BitClout tokens with BTC, you can’t take your BitClout tokens out of the BitClout network. You can only send BitClout tokens to other BitClout users or use them to buy creator coins; there’s no way to redeem any of this for cash or Bitcoin.
Updating a profile picture, posting a status or messaging a chatbot is impossible without first buying the coins. And when Decrypt wired about $20 in Bitcoin to the platform, the site didn’t allow us to use our money to buy BitClout tokens. (Update: Bitclout now permits users to create a profile and obtain a minuscule amount of its tokens by sharing their phone number).
Nor is there any way to verify that such transactions would take place on a blockchain. While there is an explorer, the network fee is zero and there’s no obvious way to create a node or mine coins. The anonymous team hasn’t published the code for the project.
Despite some high-profile backing, just a few accounts are verified; even then, verification isn’t a sure-fire bet that an influencer associates their name with the project. Neither Chamath Palihapitiya nor Ashton Kutcher, two of the highest-profile ‘verified’ accounts, have tweeted about the project—necessary to verify an account.
Two of the largest Twitter accounts for r/WallStreetBets, another account registered as verified, told Decrypt that they had nothing to do with WSB’s BitClout persona, which gushes about the project in daily messages on BitClout.
Most of the BitClout fans on Twitter, a handful of followers each, have little other activity to their name save for their promotion of the project.
Take @Ssh_Just_Buy, an account created in February that sporadically pumped small-cap altcoins until March 12, when the account flipped to pumping BitClout. The account published a link to their own website explaining the project in detail just two days later.
Making the operation murkier still, BitClout’s network keeps going offline. “Diamondhands,” which appears to be the account on BitClout that’s behind the project, said on BitClout that this was because nodes kept rebooting and missing transactions.
So who’s buying in? One early investor is Chris McCann, a tousled Silicon Valley investor who caught wind of the project from friends. McCann, a general partner at Race Capital, told Decrypt that he has no connection to the project or its founders but got involved in an early access version of the project that launched last week.
McCann, whose coins boast a market cap of $55,400 on the site, said he’s invested “a little bit too much” money into the project but credits the anonymous team with the “smooth” website.
One of his friends, Andy Artz, an investor at Silicon Valley firm Social Capital, bet $18,000 on his success.
“Once you kind of get sucked in and start making some early bets on people and they get verified, it's fun—you actually want to want to use it,” said McCann, who gained access to almost $34,000 in unredeemable BitClout tokens when he tweeted about the project to verify his account.
Michael Arrington, a well-known Silicon Valley investor and media figure, received the equivalent of $290,000 in creator tokens. He did not respond to Decrypt’s request for comment.
McCann said that BitClout fills a demand for social crypto projects unmet by the current roster of such projects, such as social token sites Rally or Roll—the latter of which was hacked over the weekend, crashing the prices of the tokens tied to the influencers that use the platform.
McCann is well aware of the concerns, notably the inability to redeem money and the opportunity for imposters to profit from fake accounts. “It’s still ridiculously early,” he said. And it wouldn’t be the first of McCann’s investments—his other bets include crypto exchanges FTX and Binance—that got off to shaky starts and later flourished.
But for CipherBlade’s Sanders, it doesn’t look good and smacks of the pump n’ dump ICOs that wasted billions of investors’ money in 2017 and 2018. “What a dumpster fire,” he concluded.
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|From: w0z||3/29/2021 5:06:01 AM|
| How to Be Smart About Taxes on Bitcoin|
Savvy cryptocurrency investors can lower their capital-gains obligations. Heedless ones are asking for trouble.
By Alexis Leondis
March 26, 2021, 6:30 AM EDT
Are you among the estimated 15% of Americans who own digital currency? If you sold or traded it last year, you're probably sitting on big gains, and those will come with hefty tax bills.
There are smart ways to manage those obligations, and not-so-smart ones, too.
Lots of crypto investors might be tempted to hide their heads in the tax-planning sand, and it’s easy to see why. The tax issues are complex. Brokerage firms don’t do the hard work of tracking their holdings, as they typically do for owners of stocks and bonds. Guidance from the Internal Revenue Service can be confusing, too.
Still, they can’t afford to throw up their hands.
Just a few years ago, many taxpayers were simply unaware of the tax implications of trading Bitcoin or other digital currencies. In 2014, the IRS had said that crypto was considered property, like stocks, and would therefore be subject to capital-gains taxes when sold or traded. (If investors hold anything that's considered property for under a year, it’s taxed at ordinary income tax rates. If it's held for longer, it generally qualifies for lower long-term capital gains tax rates.)
Now, the question is less, "Wait, I owe taxes?" and more about how to reduce the capital gains tax owed, or at least how to pay it later.
The main way now to defer crypto tax bills for 2020 is to invest in an opportunity-zone fund. A provision in the 2017 tax law allows taxpayers to defer, and even reduce, capital gains taxes if they put the proceeds from the sale of say, a stock or business, into a fund created to promote investment in an economically disadvantaged area. Investors generally have six months to move the money.
Proceeds from crypto sales qualify, too, according to Ryan Losi, an accountant in Richmond, Virginia. Those who sold crypto toward the end of last year can still cut their 2020 capital-gains tax bills by acting now.
Under the rules, they'll be able to defer their capital gains tax until 2026, and if they hold the investment beyond that, cut their tax bill by as much as 10%.
There are also some moves taxpayers should consider before taxes are due next year. Those who are philanthropically inclined and itemize their deductions may want to donate their gains to a charity (provided the nonprofit accepts crypto, although there are third parties that can help if not). That’s doubly advantageous because the donor both escapes the capital-gains tax and gets a deduction for the full market value of the crypto holding up to a certain percentage of income, as long as it was held for at least one year, said Nicholas Marazza, an accountant at Marcum LLP.
Taxpayers may also want to start buying digital currencies in a self-directed Individual Retirement Account. Any trading of the currencies within the account wouldn't be subject to capital gains tax — taxes would just be triggered when the money is withdrawn. Beware of the fees though, which are typically higher than a traditional IRA.
As the end of 2021 draws near, remember an advantage that crypto owners have over stock investors: cryptocurrency doesn't have a wash/sale rule, which bars stock investors from taking a deduction for a loss if they repurchase the same security within 30 days. That means a crypto owner can sell unrealized losses by Dec. 31, 2021, to offset some gains, and then buy the crypto back in early 2022.
And here’s what not to do: use current crypto holdings as collateral to acquire a new crypto asset. Some investors do this in part because it avoids triggering capital gains tax, since they aren't selling or exchanging anything. But it’s a dangerous tactic because it’s banking on no market downturn. Crypto markets are way too volatile to make that a good bet.
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|From: Glenn Petersen||3/29/2021 7:07:29 AM|
|Visa moves to allow payment settlements using cryptocurrency|
PUBLISHED MON, MAR 29 20215:52 AM EDT
-- Visa said on Monday it will allow the use of the cryptocurrency USD Coin to settle transactions on its payment network.
-- It was the latest sign of growing acceptance of digital currencies by the mainstream financial industry.
Visa said on Monday it will allow the use of the cryptocurrency USD Coin to settle transactions on its payment network, the latest sign of growing acceptance of digital currencies by the mainstream financial industry.
Visa has launched the pilot program with payment and crypto platform Crypto.com and plans to offer the option to more partners later this year, it said.
The USD Coin (USDC) is a stablecoin cryptocurrency whose value is pegged directly to the U.S. dollar.
Visa’s move comes as major finance firms including BNY Mellon, BlackRock and Mastercard have embraced some digital coins, sparking predictions that cryptocurrencies will become a regular part of investment portfolios.
Tesla boss Elon Musk said last week that customers can buy its electric vehicles with bitcoin, marking a significant step forward for the cryptocurrency’s use in commerce.
“We see increasing demand from consumers across the world to be able to access, hold and use digital currencies and we’re seeing demand from our clients to be able to build products that provide that access for consumers,” Cuy Sheffield, head of crypto at Visa, said.
Traditionally, if a customer chooses to use a Crypto.com Visa card to pay for a coffee, the digital currency held in a cryptocurrency wallet needs to be converted into traditional money.
The cryptocurrency wallet will deposit traditional fiat currency in a bank account, to be wired to Visa at the end of the day to settle any transactions, adding cost and complexity for businesses.
Visa’s latest step, which will use the ethereum blockchain, strips out the need to convert digital coin into traditional money in order for the transaction to be settled.
Visa said it has partnered with digital asset bank Anchorage and completed the first transaction this month — with Crypto.com sending USDC to Visa’s Ethereum address at Anchorage.
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|To: w0z who wrote (2698)||3/29/2021 11:25:00 AM|
| Taxpayers may also want to start buying digital currencies in a self-directed Individual Retirement Account. Any trading of the currencies within the account wouldn't be subject to capital gains tax — taxes would just be triggered when the money is withdrawn. Beware of the fees though, which are typically higher than a traditional IRA.|
Do you understand the distinction between a self directed IRA and traditional IRA, and the comment about one having higher fees? I don’t.
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