IRS sends warning letters to 10,000 cryptocurrency holders

The IRS knows about the cryptocoins and wants you to pay taxes on them. The Wall Street Journal reports that the warning letters are going out.

An IRS spokesman declined to say whether the letters stem from information turned over by digital-currency platform Coinbase. In mid-March of 2018, Coinbase provided data—under a federal court order—on about 13,000 accounts requested by the IRS. ... The Coinbase customers whose information was turned over bought, sold, sent or received digital currency worth $20,000 or more between 2013 and 2015. For federal tax purposes, cryptocurrencies such as as bitcoin are treated as investment property akin to stock shares or real estate.

You may not be interested in paying taxes, but the government is interested in the companies that helped you not pay taxes and it turns out those companies are happy to help the government help you pay your taxes. QED! Read the rest

Facebook is working on a crypto coin for WhatsApp

Facebook is said to be developing a 'stablecoin,' which is a kind of digital currency pegged to the U.S. dollar.

This digital piggybank has its own cryptocurrency

Pigzbe is a digital "piggy-wallet" for children that uses its own cryptocurrency called Wollo (WLO). It has gotten $100k on Kickstarter, but that's not where the real money is. According to ICO Bench, $7,200,000 worth of WLO was sold in an initial coin offering.

According to Coincodex, WLO is trading at $0.015 Read the rest

DJ Khaled and Floyd Mayweather fined over posts promoting fraud-tainted cryptocurrency

DJ Khaled and Floyd Mayweather both pitched deals to their followers, but did not disclose or admit they were paid to do so. Both are being fined as a result of the undisclosed sponsorships, which were, of course, for sleazy cryptocurrencies.

Both took money to promote Centra Tech, an ICO that eventually led to fraud charges for several of its masterminds. The SEC found that Mayweather took $100,000 to promote the Centra token, as well as $200,000 to promote two other ICOs, in posts like an Instagram message where he told his millions of followers "You can call me Floyd Crypto Mayweather from now on." DJ Khaled was paid $50,000 to promote Centra Tech -- facts neither mentioned in their social media posts. While they avoided admitting any wrongdoing, both will have to give up the money they were paid, along with an additional $300,000 penalty for Mayweather to go with a $100,000 fine for DJ Khaled (plus interest).

A phenomenon of the Twitter era is celebrities not really bothering with professional financial and business help beyond accountants. The dumb ones are easier marks than ever.

Here's the SEC press release on the Centra coin shenanigan. It peaked at a $240m market cap but quickly deflated and is now nearly worthless; the founders were arrested in April. Read the rest

Seasteading meets the shock doctrine in Puerto Rico, where ethnic cleansing precedes Going Galt

Naomi Klein's l(ooooo)ongread in The Intercept about the state of play in Puerto Rico is the comprehensive summary of the post-Maria fuckery and hope that has gripped America's colonial laboratory, the place where taxation without representation, austerity, chemical weapons, new drugs, and new agribusiness techniques get trialed before the rest of America are subjected to them. Read the rest

Atari joins blockchain mania

Atari is launching its own cryptocurrency, because of course it is.

The company’s Paris-listed stock rose as much as 111% between February 4 and February 15. The company says it is investing in a “crypto platform” that will use its own digital currency, the “Atari Token.” It can be used to – you guessed it – play video games.

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The founder of BitTorrent is on a quest to develop an eco-friendly cryptocurrency

I wrote an article for California Sunday Magazine about BitTorrent founder Bram Cohen's new cryptocurrency, called chia. It uses the Bitcoin codebase, but Bram is replacing the energy intensive proof-of-work validation algorithm with a combination of proof-of-unused-hard-drive-space and proof-of-wall-clock-time, which does not require much electricity at all.

No one owns the Bitcoin network — the code is open source — so Cohen is free to build off of it to develop his spinoff, Chia Network. With Chia, Cohen aims to replace the energy-greedy part of Bitcoin’s code, which rewards miners for generating trillions of numbers a second, with an energy-efficient system, which rewards miners (or “farmers” in Chia’s parlance) based on the amount of unused hard-drive space they have on their computers and how long they’ve had it. If you opt in, the Chia Network will essentially populate that unused space with bingo cards. If Chia calls the numbers on your card, you’ll be awarded newly minted chia.

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Just look at this banana-futures-speculation cryptocurrency

Just look at it. Read the rest

Financial consultancy says that Bitcoin's value is speculative, and as a currency, it should be worth $810

Wall Street consultants Quinlan & Associates have published "Fool's Gold: Unearthing The World of Cryptocurrency," a $5000, 156-page report that predicts that Bitcoin will drop to $1800 by next December, and down to $810 by 2020 (it is currently trading in the $14,000 range). Read the rest

Cryptocurrency: From Basic Definitions to Expert Issues in One Interview

You’d have to be living in some kind of a news blackout not to have heard chatter about cryptocurrencies recently. The granddaddy of ‘em all – BitCoin – has appreciated roughly 2000% over the past twelve months. This puts the total value of all BitCoin close $300B, making it more valuable than roughly 490 of the companies in the Fortune 500 – and far more valuable than any of the banks that were deemed too big to fail during the financial crisis.

So what in the world is going on here? As with all large markets, nobody fully knows. But my interviewee in today’s podcast, Fred Ehrsam, knows this area better than almost anyone. In 2012, he co-founded Coinbase, which is by far the world’s largest consumer-friendly service for storing and trading cryptocurrencies (though its users include many large nonconsumers as well).

Although our interview is a spontaneous conversation, Fred and I both put methodical thought into sequencing our topics, as well as the level of depth that we treat each with. The result is a robust introduction for who know nothing about cryptocurrencies, which can also truly fire the neurons of experts in this field. Will AI’s start running on the block chain? Could a full-fledged Uber, Lyft, or AirBnB competitor exist as a cloud-based Smart Contract? And how might the emergence of Ethereum stand in certain a line of historic events that stretches back before the Bronze Age?

Those who don’t yet know what a blockchain or a smart contract are should be able to follow the entire conversation, clear through to its complex and rather mindbending conclusions, just by listening carefully (although probably not on 2x speed!). Read the rest

List of dead and worthless cryptocurrencies

Deadcoins (by matixmatix) is a list of, well, dead coins: the Bitcoin-esque cryptocurrencies that failed to take off, which were scams or experiments, or which otherwise are now deceased. Or, perhaps they're all dead, the new Bitcoin boom notwithstanding. Speaking of which, Bitcoin is dead, long live Bitcoin.

If you want something truly, permanent, though, you can get a commemorative gold-plated bitcoin for... the grand sum of $7.88. Read the rest