Business

Crypto is Big Now. How Do You Pay Your Taxes? 0 76

There are 2070 kinds of tokens in circulation, with a total market cap of $209.5 billion. Bitcoin tokens alone account for $112.4 billion of that.

And while it’s been a bearish year for Bitcoin, a recent survey of fintech leaders anticipates its value to rise 220 percent by the end of 2019. Research by Stasis also supports a promising future for cryptos, projecting a trade volume growth of 50 percent through next year.

Cryptos are more popular than ever. A survey of the intersection between crypto enthusiasts and reddit users found first timers have tended to adopt crypto in step with valuation booms. “The peaks unsurprisingly follow the growth of the cryptocurrency market,” the results read, “with the two biggest years being 2013 and 2017 by a significant margin. Within 2017 the same trend shows, with most people entering crypto May through to August which coincided with the end of Ethereum’s big bull run up to $400 and Bitcoin’s run up to $5000.”

Those surveyed, overwhelmingly college educated males with a median age between 26 and 30, are confident in their knowledge about blockchain and tend towards crypto evangelism. About 40 percent said they check the price of their coins over ten times per day, with 94 percent checking at least once daily.

All This Interest in Crypto Has Alerted the Old Guard

With crypto values rising, and public interest along with it, the federal government has lumbered to life and started investigating cryptospace to the best of their ability. Which apparently means paying others to do it for them. Paying a lot. According to research by Diar, public records show US government agencies like the FBI, ICE, the SEC, and of course the IRS, have cumulatively spent $5.7 million hiring blockchain analysis companies. Two thirds of that spending has been in the last year, since Bitcoin’s big surge.

Perhaps all that analysis will help the IRS to finally clarify how they intend to tax cryptocurrencies. As of now, the only information they’ve released is a brief notice from 2014 mumbling to the public that the IRS is “aware” of “virtual currency,” and they consider it “property.” It’s very little to go on, but their silence and their heavy spending on analysis suggests they’re trying to catch up.

Investors Are Wondering How to Fulfill Their Tax Obligations

Meanwhile, we’re in the fourth quarter of crypto’s most popular year yet, and investors are looking back at the fiscal year wondering what they can do to stay in good standing. But bookkeeping gets complicated with crypto, because transaction data isn’t standardized.

With thousands of cryptos being traded across many different exchanges and every exchange reporting differently, not to mention wallet-to-wallet transactions that don’t involve an exchange, there’s no consistency in how to keep crypto books. If there were industry standards for recording and reporting transactions, that would be another story. But crypto is still young, and let’s be honest, nobody really knows what they’re doing.

So squaring up with tax responsibilities is no simple task. In fact, it’s a bit of a mystery at this point.

Who’s Solving the Problem?

While the fed scratches its noggin, champions of the private sector are stepping in to deliver solutions for companies and investors who need crypto bookkeeping. Libra is one that offers real time blockchain auditing tools “to automate and optimize middle and back office processes and reporting, while improving operational and financial analysis and control.”

Another SaaS to look into, one that’s optimized for the single investor while still useful to a company or a fund, is Profitstance. Their tools are designed to keep you up to speed on the tax consequences of every crypto transaction, again in real time. They say they guarantee the 100 percent accuracy of their calculations, and they’ll pay your IRS fines and interest if they’re wrong. With someone else taking on that much responsibility for your numbers, hopefully you can sleep (and trade) a little bit easier.

Alternatively, you can hire a team of CPAs who know crypto, like those at Camuso, and just let them handle everything for you. For the DIY types, you can use utilities like CryptoTrader.Tax to autofill your 8949 (it’s under development, but you can sign up to get the latest release when it’s ready).

So don’t stress about taxes, even if you’re among the many newcomers to the ever-expanding crypto game. We’re making this up as we fly forward into it, but there are plenty of people offering support to make sure you don’t get caught in a wrestling match with the IRS.

Previous ArticleNext Article
A tribal member of the Choctaw Nation, Brian grew up in the Silicon valley under the technological mentorship of Steve Wozniak. He's lived, worked and traveled all over the world, and now writes and makes films in the Pacific Northwest.

Leave a Reply

Your email address will not be published. Required fields are marked *

Bow To Your New God, Blockchain. Bow Down. 0 131

It’s pronounced ‘Zero Ex Omega’.

It’s the brainchild of two people who apparently have lots of time on their hands and a penchant for publicity stunts: artist Avery Singer, child of Ramona Singer, who seems to be someone on television, and Bay Area whiz kid slash former CEO of Augur Matt Liston.

Together at a conference at New York City’s New Museum, Singer and Liston unveiled 0xΩ. It’s a blockchain religion they invented.

Do we need a blockchain religion? Of course we do. Look at it this way: blockchain has always been a religion. Singer and Liston are just making it official—and, of course, decentralizing it.

Not a Critique of Capitalism, But…

“In our secular culture, we have sort of replaced religion with capitalism or, rather, this rampant consumerism,” Liston told Wired. “0xΩ isn’t a direct critique of that, but I think it’s definitely a clear point to make.”

Put that way, 0xΩ isn’t so different from the Church of the SubGenius, which satirizes everything on Earth to rough sketch a core dogma of meaninglessness and mayhem transcendable only by the attainment of ‘slack’. Or more recently, it resembles trends in chaos magick, which asserts that “nothing is true and everything is permissible.”

These anarchic belief systems (or anti-belief systems?) can be seen as responses to some of late capitalism’s gaping failures, namely the frenzied fervors of consumerism, epidemic feelings of void and alienation resulting from an absence of cultural roots, and the general collapse of institutional religion as a place to find any meaning or value.

From this climate emerges the great and terrible Dogewhal.

Yes, Dogewhal.

“We have this avatar I’ve created who is a narwhal with a doge head, a beret, tattoos, an infinity tail, an ethereum logo,” said Singer at the unveiling, while muffling laughter.

Is this a joke? Yes! Is there more to it than that? Also yes!

The rest of the crypto world takes itself so seriously, it can stand a little shake up from time to time. If nothing else, 0xΩ brings that relief. While ostensibly the meaningless antics of the clever, it could actually have some new ideas about how we approach belief systems, and some new applications of the block.

The Block X Religion

0xΩ is a custom religion, but it’s also a platform for existing religions. On 0xΩ, everyone in the religion has an equal say in which beliefs prevail, and what will be the content of sacred texts.

It’s a takedown of traditional hierarchies in which acolytes apply themselves to the instruction of a master who holds the keys to the kingdom, hierarchies which people are less and less interested in.

“We’re incentivizing mindsharing, and eventually mind upload to use consensus to form a structure of collective consciousness,” Liston said. This deliberate manufacturing of consensus reality, if it works, would make Peter J. Carroll proud.

Where Did This All Come From?

The name ‘0xΩ’ itself has gnostic overtones. The void, or the original nothingness, multiplied by the sum total of all material existence, signified by the character Ω. Nothing times everything. Whence comes the universe? From what void does it all spring? You could ask the same of Bitcoin, which spontaneously emerges from nothingness just as the universe did, or does, maybe.

Liston, who also previously worked with a decentralized prediction company called, ironically, Gnosis, says he “grew up Jewish.”

He was pushed out of his position as CEO of Augur in a series of legal battles surrounding one of the world’s first ICOs. Augur, a betting tool that rewards users for correct predictions on elections, markets, or even the weather, seems an apt place to start for someone whose business aspirations seem to revolve around the ethereal nature of belief.

Regarding his approach to blockchain, Liston says “I’m obsessed and very driven by what these technologies can do, but I’m bored with it being a space that’s dominated by engineers and finance people.”

Like What Does Religion Even Mean, Dude?

It raises questions like: Is a democratized religion even a religion? Do the people know best on matters concerning the secret laws of nature? What is the point of all this? The best answer to the latter is probably ‘well, what is the point of anything?’

Sure, 0xΩ may be dismissive of the cultural post that world religions occupy. It’s a bit like someone mouthing a bunch of gibberish and declaring they’ve just founded a language. But it disrupts the evangelical fervor of blockchain enthusiasts, and that, if nothing else, is a service to humanity.

These Entrepreneurs Are Building the Blank Canvas of the New Internet 1 549

Photo by Kelly Sikkema on Unsplash

We need a new internet. This HTTP stuff is left over from the ‘90s. It’s corporate controlled in the post neutrality world, susceptible to government censorship, inaccessible to many with nearly half the world’s population still unable to connect. It increasingly needs a more streamlined makeover.

Or at least a little house cleaning. How many apps can we possibly have? How many passwords and accounts? How much content can we cram in here? What do we do with the ever growing graveyard of dead links, old MySpace accounts and cat memes, to say nothing of the emptying, generic cruise ship we call Facebook drifting steadily away from relevance? One possible answer: clean the slate. Start again. This time with something more efficient.

Imagining the Internet 2.0

By some indicators, blockchain could be the thing to supplant the internet as the de facto way we create, communicate and store data. But how will we see it widely implemented without it first becoming more user friendly to the layperson? SMBs and entrepreneurs don’t necessarily have a background in programming, nor have the skills to set their business up on the blockchain. Learning to program or hiring a team of blockchain devs isn’t always within reach to the average SMB, to say nothing of individual artisans or small nonprofits.

By contrast, consider how easy it is to start up a website. You can do it in a few hours, thanks to software platforms that make it easy. You get your URL from GoDaddy, a visual template from WordPress or SquareSpace, who also might bundle in your ecommerce space if you haven’t set that up with Shopify already. It’s because of these SaaS and PaaS third parties that we can web.

If we want to go blockchain, we’ll need a third parties like these to help facilitate it. So where are these platforms? Who’s building them?

The Deregulated Ecommerce Toolkit

Well, Eric Tippetts, for one. Tippetts expects the 2020s to see a shift to blockchain much like the 90s shift to the information superhighway and the 2010s shift to mobile. To speed things along, his company NASGO has created a toolkit called BlockBox, the goal of which is to be the ‘GoDaddy of blockchain’ so people and businesses can start building.

Through BlockBox, which Tippetts cocreated with a development team, you can find and secure a blockchain domain address, like you would with a URL, adapt your existing website for blockchain, and create a custom token. Instead of having to wrap your head around lines of code or hire a dev team, it just takes a couple minutes and a couple hundred bucks.

Tippetts describes NASGO itself as “a decentralized hosting environment that allows content to be seen in every part of the world, opening up blocked boundaries for communication and collaboration.” It also includes a platform for decentralized apps (DAPPS) that could compete with Apple and Google’s app stores.

Their website repeatedly emphasizes the deregulated nature of the product, ostensibly gearing their platform toward the “businesses, developers and consumers” of a sharing and open ecommerce.

A Platform for Public and Private Good

Amber Baldet’s company Clovyr has similar goals, but with a distinctly different tone. She wants people to use their DAPP platform to “build the systems we want to see in the world.”

Baldet left JP Morgan Chase, where she was hired to spearhead their out-of-character blockchain experiments, to found her startup. She recently testified before congress about blockchain regulation and the importance of protecting human rights and privacy early on, while the technology is still in its infancy.

She says that there needn’t be a divide between public and private interests when it comes to blockchain. “It’s very divided, the people that are building things for public chain and people that are building things for ‘permissioned’ or business enterprise kind of chains,” said Baldet in an interview with Fortune. She says that nomenclature isn’t helpful, “because it creates this kind of animosity where we’re saying that big business is on one side and the people or the proletariat are on the other side, when really it should just be about information residing where it makes sense and creating security boundaries that are logical.”

Building a Blank Canvas

In a way, the blockchain is a platform much like the internet itself, a canvas available for anybody to use, whatever their interests and intentions are.

So whatever direction the blockchain internet-nouveau of the future takes, if that’s really what we’re in for, people like Tippetts and Baldet are the architects of its structure. It’ll be up to the rest of to fill it up with content. Hopefully good content. Bring the memes, leave the corporate derelicts.

Most Popular Topics

Lifestyle
Fashion
Business
Travel

Editor Picks