The Good, the Bad and the Regulation.

Headline: Cryptocurrency Regulation?

Senators Gillibrand and Lummis introduced a till to help regulate cryptocurrency transactions.

The Wild West was known that way because presence of law and order were thin on the ground, most of the time.  Land owners had to patrol their own property, sometimes the sheriff had to call together a posse (they still do this today, in some places.)  Point is that there was very little legislation affecting citizens in the Wild West, and very little in the way of protections for them either.  This is kind of how cryptocurrency is today.  There is no limit on how much money you could make and no limit on how much you might lose either.  Well, 2 Senators, from opposite sides of the aisle, are trying to change this.  Senators Lummis and Gillibrand have co-sponsored the Responsible Financial Innovation Act (RFIA).

OK, we’re back to the same question.   Is this tranche of cryptocurrency a security?

This is an important question because it helps decide which federal agency oversees it, and helps decide which pieces of legislation apply.  In the past, the Howey Test was applied, to see if something was a security or not.  Believe me when I say that there are thousands of pages of legal decisions based on this, but, fundamentally, there is a 4-part test.   The attributes examined are the following:

• The existence of an investment contract
• The formation of a common enterprise
• A promise of profits by the issuer
• The use of a third party to promote the offering

If the subject at issue fails any one of these 4 tests, then it is a commodity.  Interestingly, if it is a security and it’s some kind of cryptocurrency (like a virtual token) it is now called an ancillary asset.  If an ancillary asset is not decentralized enough, then they have to make semi-annual disclosures to the SEC.  But, in observance of the new pressures on the much smaller CFTC, the agency can now charge fees to help support them.

So, what else does the bill propose?

1.  $200 exclusion on your taxes if that cryptocurrency is used on goods and services.
2. Mining and staking profits would be taxable when they are realized.
3. The bill orders and investigation on using digital assets in retirement accounts.
4. Establishes that a DAO is a taxable business entity and now must be organized under the Laws of a state or foreign country.
5. The bill demands another set of  mandatory disclosures about the issuer of the currency, and how previous cryptocurrency experiences went for them.
6. The bill would set up a “sandbox” where cryptocurrency firms could try different products and approaches for a set period of time.

So, what else can you tell me about the bill?

The RFIA begins like any other bill, by providing definitions.   But, since digital assets are so new on the scene, it seems appropriate

Ancillary Assets. Ancillary assets in compliance with U.S. Securities and Exchange Commission (SEC) disclosures are considered commodities. Under the bill, an ancillary asset is an intangible asset provided to a person in connection with the purchase and sale of a security through an investment contract, as defined by the Howey test. This may include a digital asset that is used to facilitate the governance of a distributed ledger technology network or DAO.

Digital Asset: A natively electronic asset that grants economic, proprietary, or access powers and is recorded using cryptographically secured distributed ledger technology. Includes virtual currency and payment stablecoins, and may comprise other financial assets, such as ancillary assets and securities.

• Digital Asset Intermediary: A person who holds a license, registration, or other similar authorization as specified by the related legislature that may conduct market activities relating in digital assets. Includes a person who holds a license, registration, or other similar authorization under state or federal law that issues a payment stablecoin, but not a depository institution.
• Distributed Ledger Technology: A digital ledger or database that is maintained on multiple nodes using a consensus mechanism that facilitates a means for users to independently verify the recording and ordering of data or any similar analogue.
• Payment Stablecoin: A digital asset that is denominated or pegged to the value of legal tender or in the legal tender of a foreign country (excluding cases in which a foreign country has adopted virtual currency as legal tender).
• Smart Contract: Computer code deployed to a distributed ledger technology network that executes an instruction based on the occurrence or nonoccurrence of specified conditions. Includes taking possession or control of a digital asset and transferring the asset or issuing executable instructions for these actions.
• Virtual Currency: A digital asset that: (1) is used primarily as a medium of exchange, unit of account, store of value, or any combination of such functions, (2) is not legal tender, (3) does not derive value from or is backed by an underlying financial asset (except other digital assets). Includes a digital asset or the reasonable expectation or denominated or pegged value will be maintained and be available upon redemption from the issuer or other identified person, based solely on a smart contract.

So, is this legislation going to work well for the American people?

I think I would characterize this bill as a good first step.  But, I am rather confident that the cryptocurrency industry will work very hard to find the loopholes.  The industry has hired more than 200 officials and staff from the White House, Congress, Federal Reserve and political campaigns, according to the Tech Transparency Project. Meanwhile, crypto executives have contributed more than $30 million toward federal candidates and campaigns since the start of the 2020 election cycle, according to Federal Election Commission data. 

There is also a good deal of concern about whether or not the CFTC has the horsepower to do the regulation it would be mandated to do.  Many point to how small the CFTC is and how little budgetary authority they are granted, and ask whether or not they have the staff and other resources to do a good job.  Even though they would be empowered to take some fees, Wall Street lobbyists have been working diligently for decades in an attempt to keep this agency under-powered.  There is concern that the fees taken would not be sufficient to make up the shortfall.

There are additional fears that this bill could suffer a similar fate as others.   Just recently Senator Toomey (R-PA) sponsored a bill to enact rules related to stablecoins.  This legislation was stalled in Congress.

The Verdict

So, it would seem that we finish where we started.  “Currently, we just don’t have enough investor protection in crypto finance, issuance, trading, or lending,” Gensler told lawmakers in September. “Frankly, at this time, it’s more like the Wild West or the old world of ‘buyer beware’ that existed before the securities laws were enacted.”   Problem is, if the new sheriff in town doesn’t have the right deputies, and the right personal reputation, the bad guys will ride right over them.  I rather like the comparison to the Wild West, though, because it points us towards one of the only solutions that WILL work: personal responsibility.  In the Old West, if your mining stake turned out to be very profitable, you were very careful to find a reputable assayer and read your contracts VERY carefully to understand how much risk you had to take on.  I think that with cryptocurrency, these lessons are still relevant today.

REFERENCES

Lummis-Gillibrand crypto bill comprehensive but still creates division (cointelegraph.com)

Lummis-Gillibrand Bill Could Establish Cryptocurrency Regulation (natlawreview.com)

Bipartisan crypto regulatory overhaul would treat most digital assets as commodities under CFTC oversight (cnbc.com)

Key US Senators Introduce Crypto Bill Outlining Sweeping Plan for Future Rules (coindesk.com)

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REFERENCES

Editor’s Note: Please note that the information contained herein is meant only for general education: This should not be construed as Tax Advice.   Personal attributes could make a material difference in the advice given, so, before taking action, please consult your tax advisor or CPA.

 

A True Legacy System.

Headline: What happens to your cryptocurrency investment when you die?

Body:  OK, this one will be a little tough, but it is interesting and worthy of thought.  We are going to talk about death.

No, I swear, this will be interesting.   The facet we will be focused upon is: What happens to all of your social media posts and webpages when you die?  I spend an inordinate amount of time each week updating my website with new blog entries, announcing them on LinkedIn and Facebook, and then (for fun) watching TikTok videos. (No, I don’t make any videos there… yet.)  Point is, we have spent a vast amount of time and energy curating the digital face we show to the world.   Some spend thousands or millions of dollars on NFTs like the Bored Apes.  So, it seems logical and interesting to ask, what is their “end” when we meet ours?

My great Aunt’s tea set is awful.  Why would I want to inherit her digital assets?

Well, digital assets are becoming more and more valuable.  Between cryptocurrencies and NFTs alone, we could be speaking of millions of dollars, easily.  And, it is important to note that all of these thing CAN be inherited, assuming that they are in the Estate Plan.  If not, they become consigned to the digital flotsam of the Internet.  Please note that the Estate Plan should define these digital assets as precisely as possible, including URLs and passwords.   But, the reasons for  doing this management  are easy to understand.   For instance, let’s assume that there was a man, who died while committing a bank robbery.  Thing is, before that, he was a 20-year Navy veteran, and the only reason he did this thing is because he could not afford the cancer treatment that his long-time wife needed.  How is he remembered?   Was he a gun-toting thug who terrorized dozens of people?   Or, was he a loving family man, who did everything he could to support his family?  I am guessing that remaining members of his family would tell one story, and a very different one could be found in the press.  The family would want to do everything they could to ensure that he was remembered… for the right reasons.

Are there different types of digital assets?

Good question.   There are 2 major flavors of  digital assets, transferrable and non-transferrable.  The non-transferrable assets most often encountered include e-mail accounts, social media accounts and subscriptions.   Plus, there are some that within the governing contract, spell out that they are non-transferrable.  (This is most often the case with domain names.)  So, when I shuffle off this mortal coil, my adglibenterprises domain cannot be transferred to any of my writer friends.  But, please note that trusted people should have access to these sites and accounts if only to formally close them or send out a final e-mail that no more traffic is coming from them.

So, what’s so different about digital assets?

In short, not much separates your great aunt’s tea set from the Bitcoin that you own.  They are both assets, and when listed on a Will, they can both be bequeathed to whomever you choose.  The difference is that tea sets have been around for millenia, and we know that we have to account for them, and we are good at doing this.   Digital assets are a different kettle of fish entirely.  They are very new, and many people don’t think about them at all, and they can be VERY valuable.  The key here is specificity.  With  digital assets, you need to delineate carefully which assets go to which person or group.  Further, your instrument must have some reminder of usernames and passwords so that your heirs can gain the access they are entitled to.  Many people just forget to do this, and the digital assets then just… sit.  This is painful when it involves money like cryptocurrency, but it can be devastating if it includes family pictures or videos that live on the Web.  For this reason, it is a very good idea to share your private key with at least one other person you trust implicitly.

Are there any examples of this kind of digital asset planning?

Yes, there is a great example, even now.  Facebook has something called the “legacy contract” where somebody else can manage your account.   Once it has been “memorialized” that person can manage the account as they see fit, or delete it altogether.

So, ok, I have some planning to do.  What if my attorney doesn’t ask about digital assets, and I forget to list them in my Will?

Your legal advisor should have access to something like “Safe Haven” to help this information stay secure.  It transfers the details in “shards”  and by themselves, each shard is useless.  Each heavily encrypted piece of data is sent to a “cold wallet” which is pretty secure too.  If your attorney does not ask about your digital assets, make sure that you initiate the conversation, and if not comfortable, you might want to select a different lawyer.

The Verdict

For most people, this is not a huge deal.   If you die, the pictures of you at the office Christmas party or nana’s secret recipe for lemon bars could fall into somebody’s clutches.   No big deal.  But, what if you are a public figure ?  Perhaps it is very important to you and your family that your memory remain positive within the public realm.  Maybe you are the only one with the complete formula for Coke syrup?  This would be a digital asset that you would very seriously want to consider passing on carefully.  The point is, in the Information Age, some of the most important and valuable assets we have are digital.   There have to be plans for what happens to these assets in case of our death.   Because,  you could be involved in a car accident tomorrow that kills you, and you have no way to know, in advance.  This is made even more acute when you consider that the Baby Boom generation is getting into the later stages of their lives.  In short, our laws must catch up to our circumstances as a society.

REFERENCES

https://trustandwill.com/learn/digital-inheritance

https://www.forbes.com/sites/andrewrossow/2018/04/03/what-is-digital-inheritance-and-the-future-of-your-assets-after-death/?sh=169268937e3e

https://finance.yahoo.com/news/why-estate-planning-attorneys-worrying-152255583.html

http://www.eislerlaw.com/blog

Editor’s Note: Please note that the information contained herein is meant only for general education: This should not be construed as Tax Advice.   Personal attributes could make a material difference in the advice given, so, before taking action, please consult your tax advisor or CPA.

Was BlockFi Block-headed?

Headline: What the heck happened to BlockFi?

Date:

Body: 

Not so long ago, I walked through Union Station to take a train home.  It was markedly different post-pandemic.   Except for the occasional employee, or police officer, the only activity seemed to be the errant piece of trash blowing through.  (Pre-pandemic, there were hundreds of people gathering in the food courts, and there was even a bookstore, now gone.)  All of these changes took a while.   But, some changes come quickly.   Just a few months ago, when I had a reason to walk the station, I saw many large video billboards for BlockFi, some sort of credit card paid for with cryptocurrency, or so I thought.  Now, just on the heels of FTX, BlockFi is also going bankrupt.   What happened to make this fall so quickly from grace?   Can we learn anything from it?

Ok, so what happened?

Less than a week ago, BlockFi filed for a Chapter 11 Bankruptcy protection.  Chapter 11 Bankruptcy gives a company breathing room from creditors, and allows them to remain in business.  The company will work with creditors to re-negotiate payment schedules, either extending the time period for payback and/or lowering the interest rate of the debt.   (Half a loaf is better than no bread at all, right?)  They are still in business through this period so that they can make good on the most debt possible.  In fact, every plan is reviewed by the Courts and the best interest of the creditors must be reflected. (This plan will almost  certainly include some degree of layoffs.)   Interestingly, it appears that the legal counsel for BlockFi went to some pains to explain why it is so incredibly different than FTX

Different, yes, but related, well, kind of…

Several years ago, BlockFi loaned Alameda Research (the hedge fund associated with FTX) $680 Million.  Then, when BlockFi was on the ropes (roughly May of this year), FTX received a $400 Million credit facility from FTX, along with a pledge that FTX planned to buy it in the future.  As it turns out, each participant declined to honor its obligations to the tune of several hundred million dollars.  As if this were not bad enough, BlockFi used FTX for their trading platform and lost $355 Million in cryptocurrency locked up since FTX had their public insolvency. 

One other issue that is interesting is confidentiality.   A hallmark of an organized bankruptcy is transparency between the debtor and all creditors.   But, central to their business model is a long list of names and e-mail addresses of customers.  In the wrong hands, this intangible asset could be worth a lot.  The court is currently doing its best to weigh these 2 issues against each other.  For instance, we have learned through Court filings, that BlockFi’s largest creditor is the Ankura Trust.   BlockFi owes them $729 milllion.

In its bankruptcy filing, BlockFi said it owed money to more than 100,000 creditors. The largest creditor listed is Ankura Trust, a company that represents creditors in stressed situations, which is owed $729 million. FTX, BlockFi’s second-largest creditor, is owed $275 million.  The company estimates that they have a similar amount of cash on hand to deal with all creditors, and a total of $10 Billlion in total liabilities.   This one’s going to be interesting to watch (Most interesting is that the assets might actually be valued at only $1 Billion.   Stay tuned.)  For now, BlockFi has suspended withdrawals, so, the lawsuits coming out of this might also be interesting.

 The Verdict

“We are deeply saddened to see the devastation that is cascading across an industry that we love and believe in, touching the lives of so many people,”   This was written by a BlockFi official, and it rams home the need for appropriate regulation.  Now, unfortunately, the alphabet agencies of the Federal Government face 2 large problems:

1,  They are all competing with each other to be the agency in the lead of regulating this industry.   This is an old blood sport within the Federal Government, where each agency fights to regulate new areas of law, in order to garner the additional budgetary authority that will accompany that expansion.

2.  Not many people within the Federal Government really understand the cryptocurrency industry.     Education will be really important here.

But, as investors, this is interesting.   In the long-term, I strongly believe that some form of cryptocurrency is here to stay.   Whether it is Bitcoin, Ethereum or some other coin, I have no idea.  But, in the short term, I find it quite likely that  cryptocurrency will lose a lot of value as the federal government gets to know how to regulate this industry.  It would seem to me that this combination gives us an opportunity for careful investment.

REFERENCES

BlockFi tells U.S. bankruptcy court it is ‘the antithesis of FTX’ | Reuters

BlockFi files for bankruptcy as contagion grips crypto markets | CNN Business

BlockFi Files for Bankruptcy as FTX Contagion Spreads (coindesk.com)

BlockFi Files for Bankruptcy. What It Means for Investors (fool.com)

BlockFi declares bankruptcy in aftershock of FTX’s collapse : NPR

Editor’s Note: Please note that the information contained herein is meant only for general education: This should not be construed as Tax Advice.   Personal attributes could make a material difference in the advice given, so, before taking action, please consult your tax advisor or CPA.

It’s Good to be a King!!

Headline: What is self-sovereign-identity?

Date:

Body:  Years ago, I was listening to an NPR article about a young woman in Texas, searching for her identity.     Many are thinking, “duh” because that’s what you do as a young adult.   But there was more to it.   The parents of this young woman saw to it that she didn’t have a birth certificate or a Driver’s License.  (She went to live with grandparents and the paperwork portion of her conundrum got straightened out, due to an action of the Texas legislature.)  I was feeling anger towards the parents, thinking that there could be no reason to do this but some form of child abuse.   But, there was another voice on the report, and that man suggested that this was a HUGE gift they gave her.   He referred to her as a sovereign.   He laid out an argument that had  the trappings of logic, but, reflecting upon it, I began to find holes in his logic.   Fast forward to today and I find a concept related to cryptocurrency, and this is called “self-sovereign identity.”   I wondered if this was the same concept I had heard of, or if this was something new.   Thus began this entry.

The idea of a self-sovereign identity (SSI) begins to make some level of sense when thinking of the Internet as it currently exists.   Want to do business with Amazon?  You have to give them detailed information and then, allow them to observe the products that you order.  Want to do business with Facebook?  You have to setup an account, and then you are trusting them with your pictures and occasionally very personal information.  The SSI paradigm (still very much in the sketch-pad stage of development) would introduce some type of passport that would allow you to reach out to anybody you’d like, directly.   If you are confused, please take comfort from the fact that EVERYBODY appears to be confused on this topic, even the evangelists. 

Is this a solution in search of a problem?

Well, I don’t think so.  In 2021, the average cost of a data breach was over $4,000,000.  But, if each person was effectively rrrr  But, think a little closer to home.   ( I don’t think I’m an outlier here.   Feel free to disagree.)  I live in a rather small apartment, but I still have a bunch of stuff that I could easily do without, and would love to  sell on E-Bay or some similar site.   Now, one problem is that I have mis-placed my password.   But, the second problem is that I don’t entirely trust my anonymous buyer.  The SSI system would go a long way toward solving this hesitation.

More importantly to me, is the robot testing that current websites use.  Whether it’s a CAPTCHA challenge (reproduce the letter string) or the challenge of “click on all pictures with a car in it” I have sincere problems since I am visually impaired.  If I had an SSI system, I could instantly prove my identity as myself, without the extreme frustrations caused by these tests.

Well, this sounds good.   So, what’s the problem?

There are a few problems that occur to me:

1.   Somebody has to issue this Master password.   If you accept that there is such a central repository, it seems to me that you are violating your own logic for SSI.
2. They claim that this would relieve us of the  problem remembering all of our 80 passwords.   They are correct here, but, having different passwords augments your security.  If somebody hacks your Facebook password, they do NOT have access to your banking records.   This problem would have to be fixed to make the SSI paradigm work.
3. Authors refer to the “post-truth society” and “fake newss I think this is an impossible goal within our society.   What MIGHT be possible is training our citizens how to critically think about the information they see.  There are some internet sources that are more credible than others, and if something is really important, people should go to 3-4 trusted sources of information.   If they agree on the larger outline of the issue, then it’s probably a good outline of the issue.   If details are disagreed upon , we should then consider why this person might feel this other way, and consider if we could learn something from this difference in opinion.
4. The author suggests that this system would be something like a combination of Yelp and Biticoin.  Well, if you are familiar with Yelp, you’ll know how easy it is to leave a savage bad review, in response to an imperfect experience we had there.     If this could be controlled, then, wouldn’t this be a GREAT thing?   I would argue  probably not.   For proof, look at any reports on the use of social scores in China.   This idea is very scary to me because now, one person can’t just destroy your reparation,  they can also impair your financial destiny.

Are there opportunities for you?

Yes, there are opportunities.  In fact, the SSI would allow you to monetize our memories.  For instance you could look at pictures and identify people presented as either a friend or an associate, and get paid for this, turning them into  a “data laborer.”   Or, if the SSI thing is truly thought out, there would be no reason why you couldn’t vote over the Internet.  Think of the participation rate if you could vote using your smart phone?  But the largest opportunity is that you could allow your SSI (which would essentially be an AI system) to become an executive assistant that can buy plane tickets or setup dinner reservations.

So, where are we now with this project?

Pilot projects are already being implemented.   The one we have the most information on is called MetaMUI.  It is an SSI system setup by an aboriginal group within Australia.  (Yeah, I had to look that one up myself too, no shame.)  The system allows members of the community to positively identify themselves when in the online environment, and the payment module (slowly coming online) allows the community members one single place to place all money, cryptocurrencies and other types of valuable assets.

A robust e-government system to digitize the entire government services, the MetaMUI SSID app can be employed by users to connect to other public entities such as banks, government organizations, shops, schools, etc, through Pairwise Trust authentication. Commercial sites that have a public identity on the MetaMUI identity blockchain can offer the Pairwise Trust login to their customers. The user no longer has to register the website and create an ID and password. Users can simply connect their SSID to the website through Pairwise Trust connection and login instantly. Users do not need to provide sensitive private information to every website they visit anymore. The MetaMUI SSID app provides seamless login capability without sacrificing private information. 

As exciting as this is, and it is, it is important to realize that this innovative product lives on one device at a time.   Most interesting is a future SSI system that will be interoperative with any device you happen to be on.   For instance, a personal story.   I was on a trip to Chicago when a job became open, but to get it, you had to take a test online.  If I had had  a portable SSI system, the IRS computer would have recognized my sign-on whether from my own smartphone or the hotel business center.  (And would have done so without any delay by asking verification questions.

The Verdict

SSI systems would go a long way to solving many problems related to the internet today.  The only thing that sticks in my craw is the authentication itself.  This whole discussion is wrapped around the idea of decentralized finance (DeFi) which suggests the unnecessary nature of intermediaries.   In its current  incarnation, in order for the SSI system to work, there MUST be a central authority to issue the SSI to begin with.  Perhaps in the future, somebody much smarter than myself will find a way around this issue, but for now, it appears to be quite intractable.  So, for right now, it seems to be a great thing to play around with the idea of, but, it doesn’t appear to be ready for Primetime.

REFERENCES

https://www.coindesk.com/policy/2020/10/01/self-sovereign-identity-explained/

https://www.ibm.com/blogs/blockchain/2018/06/self-sovereign-identity-why-blockchain/

https://cointelegraph.com/press-releases/metamui-and-sovereign-yidindji-government-launched-1st-self-sovereign-identity-based-national-id-system

Editor’s Note: Please note that the information contained herein is meant only for general education: This should not be construed as Tax Advice.   Personal attributes could make a material difference in the advice given, so, before taking action, please consult your tax advisor or CPA.

That’s How We Roll(up).

Headline: ZK-rollups?  IDKY?

What is a Rollup in cryptocurrency?

Anybody out there hate doing math homework in grade school?   I did.   I developed a terrible habit of keeping my homework paper “clean” by using a piece of scrap paper to do the actual calculations with the attendant strikethroughs and other marks.  The result was that each problem would be either wrong or right, and it took me a while to understand the importance of “partial credit.”  I just thought it made the evaluation process faster and cleaner.   In a similar manner, there is a thought that an Ethereum transaction might be more efficiently validated off chain and then added to the main.   This is referred to as a “rollup.”

It is done because it is more efficient.   First, gas fees are much lower as rollups are one of the scaling systems, like sidechains and state channels.  These speed-ups are likely to be used as complements to the Merge, and the combination is supposed to make Ethereum blockchain much more attractive. 

I remember rollups in my lunchbox.  Are there different flavors of these rollups?

Yes, there are several different varieties of rollups.  There are 2 very important flavors, Optimistic and Zero Knowledge.   In an optimistic rollup, the transactions are verified (think of a very first-draft verification), but most of the data on these transactions are stored at a different location.  This allows verifiers to verify a block of transactions quickly, and minimize gas fees.  Zero knowledge rollups use a nifty piece of cryptology called zero-knowledge proofs, and these allow the particular transaction data to be rather scant/    Because it runs on thin data, the gas fees will likely be much less.   Said another way, the “block” of transactions might be  a thousand transactions, are executed off the main Ethereum net.   When done, a summary of these transactions is posted to the mainnet of Ethereum.   While both are more efficient in gas fees, they are also less secure as they have less frequent audits and rely on external tools for reliability.  ZK rollups are much faster because optimistic rollups require a “cooling off period” (my words) which gives people sufficient time to challenge the new transaction block.  Because the ZK rollups rely upon off-chain computation and on-chain posting, they are considered “hybrid scaling solutions.”  ZK rollups are likely to rotate the operator role by using a proof-of-stake system.     Their stake also keeps them honest because if incorrect blocks are posted, they lose their stake.

OK, with a little less hand waving this time, what is a ZK rollup?

The information concerning accounts and balances comprises a Merkle tree.    A cryptographic hash of this tree’s root (a Merkle root) is stored on-chain.   Since the root of the function is stored on-chain, the information encoded is easily derived, but stored off-chain.   This makes calculation much faster and serves to minimize gas fees.  A batch root can also be saved to recognize a series of related transactions.  Now, when a verifier wants to add the block to the blockchain, there is a validity proof demanded, which is another mathematical function for the verifier to prove, this one not related to the transaction.  Once this commitment is made and the function solved, the block of transactions can be added to the mainnet.

What is a ZK-SNARK v. a ZN-STARK?

These functions share the purpose of verifying the correctness of off-chain calculation.  First, there were ZK-SNARKs,  and these used a Common Reference string to aid the cryptography behind a block of transactions.   Later, these same functions were improved as they used “trusted individuals” in groups, to derive the cryptographic functions.   ZK-STARKs were an improvement on these, as they use publicly available data to aid in the cryptography, and the “trusted individual” problems are avoided.  Further, they are more scalable and can get exponentially more difficult to derive very quickly.

All of this techno-speak is giving me gas…

How much users pay for transactions on ZK-rollups is dependent on the gas fee, just like on Ethereum Mainnet. However, gas fees work differently on L2 and are influenced by the following costs:

First, there is something called “State write.”   This has nothing to do with the Constitution.    It is simply a fee charged to submit a transaction to the blockchain.  ZK rollups serve to spread this “pain” among a series of transactions such that each participant pays less than they might have alone.

Second there is a fee for data publication.   This fee will grow larger  as the size of data kept on the mainnet expands.  (This is why optimistic rollups might be a more efficient option because so little data is stored on-chain.

Third, there are L2 operator fees, and you can think of these as fees to pay the miners on the mainnet.

Fourth, and finally, there are proof generation and verification fees.   Operators of the ZK-rollups must complete validity proofs, and this is the fee to encourage them.

It should be stressed that all of these aggregated fees are minimal and a dwarfed by the fees charged by real banks.

.Pros and cons of ZK-rollups

Pros	Cons
Validity proofs ensure correctness of off-chain transactions and prevent operators from executing invalid state transitions.	The cost associated with computing and verifying validity proofs is substantial and can increase fees for rollup users.
Offers faster transaction finality as state updates are approved once validity proofs are verified on L1.	Building EVM-compatible ZK-rollups is difficult due to complexity of zero-knowledge technology.
Relies on trustless cryptographic mechanisms for security, not the honesty of incentivized actors as with optimistic rollups.	Producing validity proofs requires specialized hardware, which may encourage centralized control of the chain by a few parties.
Stores data needed to recover the off-chain state on L1, which guarantees security, censorship-resistance, and decentralization.	Centralized operators (sequencers) can influence the ordering of transactions.
Users benefit from greater capital efficiency and can withdraw funds from L2 without delays.	Hardware requirements may reduce the number of participants that can force the chain to make progress, increasing the risk of malicious operators freezing the rollup’s state and censoring users.
Doesn’t depend on liveness assumptions and users don’t have to validate the chain to protect their funds.	Some proving systems (e.g., ZK-SNARK) require a trusted setup which, if mishandled, could potentially compromise a ZK-rollup’s security model.
Better data compression can help reduce the costs of publishing calldata on Ethereum and minimize rollup fees for users

The verdict

All of this geek speak, (and trust me, I saved you from the bulk of it) is fine and good to hear, but I don’t understand all of it.   Confession: I don’t either, entirely.    I guess what we can learn from it is that cryptocurrency is an evolving concept.   The coders continue to improve the code underlying the currencies, and make the processes more efficient and faster.  So, the question is then, how is this knowledge valuable to me?    Well, I think that we are tracking some of the larger building blocks behind cryptocurrencies being added now, and into the near future (figure 1-2 years.)  After these larger blocks are in, I would begin to feel a little better about investing, even if the huge jumps in value are over.  Perhaps it’s just like the doctors tell us: everything in moderation.

REFERENCES

What Are Rollups? ZK Rollups and Optimistic Rollups Explained (coindesk.com)

Zero-Knowledge rollups | ethereum.org

Layer-2 Scaling: zk-Rollups and Optimistic Rollups | Gemini

Can the Optimism blockchain win the battle of the rollups? (cointelegraph.com)

 Editor’s Note: Please note that the information contained herein is meant only for general education: This should not be construed as Tax Advice.   Personal attributes could make a material difference in the advice given, so, before taking action, please consult your tax advisor or CPA.

 

If it Ain’t Broke, Don’t FTX It?

Headline: What is going on with FTX?

Date: 11/13/2022

Body:  Wow!!  It seems only yesterday I was watching the World Series!  Each official was in uniform, and prominent on each was a patch that read, “FTX.”   I don’t know what it cost the exchange, but it couldn’t have been cheap!  Now, days later, I read that they are in some serious danger of not being a going concern?   How does this compute?

In a nutshell…

FTX, an exchange owned by billionaire Sam Bankman-Fried was hemorrhaging money and oozing red ink.  Just one day after Binance announced that there was a deal to buy FTX (details not available) the CEO of Binance announced that they would not be following through with the non-binding deal for the $32 Billion company.  The reversal is apparently due to reports of mishandled customer funds and U.S. government investigations.  They are facing an $8 Billion shortfall.  Bankruptcy is not out of the question.  (Mind you, this is a very fluid situation and by the time you read this, things might have changed.)  One particularly bad sign was that the exchange began to sell off its own holdings in FTT, the currency native to FTX.  Also bad is that the CEO warned people of earnings that could drop nearly 60% from the year before.  Sequoia Capital, a major backer suggested publicly that their $213 million investment was considered to be worthless.   Add all of this to $6 Billion of customers demanding withdrawals, and things look quite bleak indeed.  They are not the only ones, as both Bitcoin and Ethereum have declined significantly in concert with FTT.

So, what did Binance say, in particular?

This is unusual, but I will append the entire published announcement, as it is pretty interesting.

“As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of FTX.com.

In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help.

Every time a major player in an industry fails, retail consumers will suffer. We have seen over the last several years that the crypto ecosystem is becoming more resilient and we believe in time that outliers that misuse user funds will be weeded out by the free market.

As regulatory frameworks are developed and as the industry continues to evolve toward greater decentralization, the ecosystem will grow stronger.”

This sounds to me like Binance is suggesting that in the future, the information they have to deal with will allow them the ability to not be fooled in the first place.

What is the history of FTX?

Mr. Bankman-Fried’s rise began in 2017 when he founded Alameda Research, a crypto trading firm that made a fortune exploiting arbitrage opportunities in the Bitcoin market. He parlayed that success into the creation of FTX, which was based in Hong Kong before relocating to the Bahamas last year.  Until quite recently, Mr. Bankman-Fried could be seen striding around the Capitol building, creating friends among the leadership, and he personally made a $5 Million contribution to the Biden election campaign.  CZ, for his part, used to be an investor himself, but was effectively bought out by Mr. Bankman-Fried.   Along the way, the CEO of FTX made a very public joke, and CZ was the subject of it.  Though no official reaction was noted, there was certainly some bad blood engendered. Not long ago, CZ announced on Twitter that Binance would sell its holdings of FTT. He insisted that he was not engaging in a “move against a competitor.” But he later compared the FTT token to Luna, a cryptocurrency that crashed in May, setting off a broader crisis.“We won’t support people who lobby against other industry players behind their backs,” he added on Twitter.  Given this history, it would seem that these 2 billionaires were some type of frenemies. 

What are the Pros v. Cons of FTX?

Pros	Cons
Margin and futures trading is supported.  Some sophisticated investors would like to place bets on the future markets for cryptocurrency, and FTX allowed them to make these bets.	U.S. residents are excluded from this exchange.  Residents in the US can use a subsidiary, but the offerings are limited compared to FTX based in Hong Kong.
Access  to even more exotic bets on cryptocurrency.   Some of these  investors might wish to place a bet on volatility or other attribute, and FTX allows them to place these bets too.	There is no live chat support for the exchange.  This is standard on most exchanges, but on this one, finding information in the resources that are available can be very time-consuming.

FTX was pretty clear on what could prompt margin calls, but this policy appears to be important to the pros and cons.  A margin call requires the investor to provide enough capital to substantiate a portion of their entire bet in cryptocurrency.  Let’s assume that the “maintenance margin factor” is 5%,  When the leverage nears 20, the peoson could be challenged to offer collateral.

FTX and Binance appear to be puppies from the same kennel?

Yes, they are very similar, but there are a few key differences in how they function.   Chiefly, Binance has begun to offer an online chat feature, and Binance has slightly higher fees than FTX.

Could this”conflict” all be part of a strategic hit by competitors?

This may be true, but it seems unlikely. 

However, there are some experts who do give us a bit of context, which might be helpful.   The CEO of Binance is often referred to as “CZ.”   There is a cryptocurrency expert who works at Duke University at their Law School, Lee Reiners.   Per Professor Reiners, “CZ executed a pincer movement.  He surprised all of us.”  The CEO of FTX suggested that the concerns FTX floated publicly were never expressed to him before.

So, how does FTX compare to Coinbase?

 Ok, first thing to understand is that Coinbase is a centralized exchange, and FTX is organized as a decentralized exchange.  So, by their very organization, they are different.  Both offer custodial and non-custodial wallets for your cryptocurrency  and NFTs.  But, Coinbase makes the custody feature, a feature, as your cryptocurrency becomes a lot more useful since you can negotiate it  at will.  The downside of this custodial  approach is that Coinbase will also have to have your private key.   This always makes for a risk, when you give anybody your private key.  That said, Coinbase does have some excellent security (98% of cryptocurrency stored with them is in cold storage) and they do not believe in using leverage.

The Verdict

“This episode highlights the vulnerability of the entire crypto edifice,” said Eswar Prasad, a Cornell University economics professor. “Even large and apparently financially solid institutions turn out to have fragile and shaky foundations that crumble at the least hint of trouble.”  While Economics is widely known as the dismal science, perhaps we should take a look at what’s happening here.  Remember Prodigy Internet?  They also tried to offer a service that was notable because of its refusal to edit the comments its users made.  Perhaps that is akin to what is happening to FTX.    They are doing something new, and getting financially punished for it, but soon, there will likely be hundreds doing the same thing.   Then, it will be heralded as a model for decentralized exchanges.   Only time will tell.

REFERENCES

https://www.cnbc.com/2022/11/09/binance-backs-out-of-ftx-rescue-leaving-the-crypto-exchange-on-the-brink-of-collapse.html

https://www.investopedia.com/ftx-review-5219459

https://www.fool.com/the-ascent/cryptocurrency/ftx-vs-coinbase/

https://www.bbc.com/news/business-63577783

Editor’s Note: Please note that the information contained herein is meant only for general education: This should not be construed as Tax Advice.   Personal attributes could make a material difference in the advice given, so, before taking action, please consult your tax advisor or CPA.

 

Avoid Scams: Click on This to Read More.

Headline: How Do You keep yourself from being scammed?

Date:

Body: 

Bad actors and fraudsters are always on the prowl for new ways to separate you from your money, and the massive growth of cryptocurrencies has to have them salivating.    According to a study done by Chainalysis, fraudsters stole $14 Billion in 2021 alone.  So, I offer the following to you in an effort to educate, and hopefully make you a harder target.

Fake websites

Fake websites are one really good opportunity for a fraudster, especially something like a fake cryptocurrency exchange site.  If they are able to setup a really good-looking site, they have the opportunity for both short and long-term cons:

Short term, they could take all of the personal information you put in to open an account at the alleged exchange.  They can then use this information to gain access to your banking information, credit cards, anything.

Longer term, if they have the wherewithal to give you a short-term win, they can encourage you to stick around and invest even more money.   Then, one day, they turn the lights out, and swipe all of the money that you put into that cryptocurrency wallet.

Phishing scams

Often used in conjunction with a fake website, a phishing attempt often starts as an alarming e-mail.  You might get an e-mail with the headline, “YOU MIGHT HAVE BEEN HACKED TOO.”  When you click on the link, it brings you to the fake website where they have you “verify” your private key and other information.

Pump and dump schemes

Everything old is new again.  In the past, people have purchased thousands of shares in a loser company, then hire dozens of college dropouts to call people to cajole them into buying thousands of shares in this loser company.  Then, the leader of this organization sells off their shares for a much higher price (due to the artificially created demand) and  the new investors are left holding the bag.  Nowadays, this is being done with some cryptocurrencies.   And in this way, the scammers don’t even have to find a boiler room anymore; Anywhere in the world with an Internet connection will do.

All of these schemes and more have caused many crashes and pileups on the information superhighway.  But, they seem to have a common thread of getting something for nothing.  Keep this in mind.

What are some of the red flags to be looking for?

So, how to spot a crypto scam? Warning signs to look out for include:

Promises of guaranteed returns: No financial investment can guarantee future returns because investments can go down as well as up. Any crypto offering that promises you will definitely make money is a red flag.

A poor or non-existent whitepaper: Every time a new cryptocurrency is launched, there should be a whitepaper behind it.  This document will explain how the currency is valued, and the reason that the cryptocurrency was launched.   The management team should be named.   The founders should definitely be named.  If there are lots of grammatical mistakes, it might be a sign of a rushed scheming scallywag.  Be careful.

 

An ounce of Prevention…

Ben Franklin could probably not have imagined the Internet, but, he was right on with his statement.  There are things you can do to protect yourself and your digital assets.

1. Protect your wallet.   Perhaps it might be a good idea to only put  a small amount of cryptocurrency into your Coinbase wallet online, and keep the bulk of it in a cold wallet that is not often hooked to your computer.
2. Only invest in things you understand.   Per Frank Drucker, you shouldn’t invest in a group unless you can draw their business model using a crayon.  This means that the logic of their business should be inescapable, and there should be no hand-waving.
3. Take your time to do your own research.   If it’s a Great deal now, it should still be a great deal in 2 weeks’ time.
4. When reading the whitepaper (You ARE reading the whitepaper, aren’t you?), the project that they are trying to fund should be very plainly stated, and it should be possible.

Sometimes, a pound of cure is needed.

What if you are taken by a crypto scam.   There are some definite steps you can take:

1.  File a police report
2. File a report with the CFTC at 866-366-2382.  Or file a report online with the CFTC.
3. File a report with the SEC and the FTC.

Remember, fraudsters depend upon the shame felt when one falls for such a scheme.   They rely upon this stigma to ensure that people don’t report.

 The Verdict

There is a lot that can be done to ensure that we don’t fall victim to a crypto scam, and if we do, there are steps to take to minimize the hit we will take.  The general rule seems to be that the faster we respond to a vulnerability or intrusion, the less damage will be done to us.  Certainly, we didn’t hit all the problems out there (we can’t) but, we did hit some of the biggest pitfalls.      Human beings are pre-disposed to  want to not show up weak in front of other people, and this is so important in dealing with these crypto-schemes.   Perhaps Shakespeare was right, so many centuries ago,

Whether ’tis nobler in the mind to suffer The slings and arrows of outrageous fortune, Or to take arms against a sea of troubles, And, by opposing, end them?

If you even suspect that you might be the victim of a crypto-scheme, I implore you to take up arms against your sea of troubles.

 REFERENCES

https://www.kaspersky.com/resource-center/definitions/cryptocurrency-scams

https://consumer.ftc.gov/articles/what-know-about-cryptocurrency-and-scams

https://www.investopedia.com/tech/how-identify-cryptocurrency-and-ico-scams/

https://www.aarp.org/money/scams-fraud/info-2019/cryptocurrency.html

Editor’s Note: Please note that the information contained herein is meant only for general education: This should not be construed as Tax Advice.   Personal attributes could make a material difference in the advice given, so, before taking action, please consult your tax advisor or CPA.

 

Basic Training, DROP A FEW DOLLARS AND GIVE ME .00002 BTC!!!

Headline: Beginner Crypto-investing

Date: 11/5/2022

Body:  My buddy once wanted to buy a Ferrari.  Being a non-fool, the first thing he did was educate himself on all of the models available, and decided on the model he was looking for   Then, he looked for good ways to get a good deal on a Ferrari (no, he didn’t go to Italy.)   He discovered a few good auction areas, but he also read that if one is willing to do a little work (He’s a gearead, so, he really looked forward to this challenge) the government will often have auctions where they sell off cars seized in criminal busts.  He found a relatively local site for this, and waited until the next sale.  He got the program and looked for the Ferrari he was looking for, and learned that “garage kept” was a useful attribute to look for.   He found one and put a pretty strong offer on it.   He won!!  (Yes, I did get to ride, and placed my backpack in the storage compartment in the front, very strange.)  Point is, when he was interested in making a large investment, he educated himself first,  was patient, and then got precisely what he wanted.  With cryptocurrency, you should probably do something similar. 

Ok, the first decision is to see if you wish to invest in cryptocurrency at all. 

There are advantages and disadvantages:

Advantages of investing in cryptocurrencies.	Disadvantages of investing in cryptocurrencies.
Diversification—The idea here is that as some investments go up, some go down or stay the same.  Diversification allows you to take advantage of more market movements, and shields you from overloading on one particular investment.	Limited regulation—The protections offered to investors who invest in cryptocurrency are very thin on the ground.  It is the Wild West here.  Further, when regulation might take effect is highly uncertain, as it the effect it might have on pricing.
Return potential—Remember, this is return POTENTIAL.  And it is very high, as is the possibility that your cryptocurrency becomes worthless.	High price volatility—Prices can change A LOT, day to day, and hour to hour.  If you value your sleep, you might want to consider keeping your crypto investment relatively small.
Additional Utility—Egad, “utility!!!”  It simply means that you get something else of value too.  Let’s say that Bruce Springsteen starts “Boss bucks” when you invest, you might be invited to special parties, or given advance notice of other projects.

OK, cute story, and I too love Ferraris, but how do I do the nuts and bolts of cryptocurrency investment.

1. Decide where to buy it.   There are many places to buy cryptocurrency.   Some make it very easy and are relatively expensive.  Some offer other investments as well.   So, read some good articles and decide carefully where it is best to purchase.
2. Decide how you’ll pay.  If a beginner, this will likely be trading a fiat currency (e.g. USD) for the cryptocurrency, but, as you diversify, you might want to trade one cryptocurrency for another.
3. Add value to your account.  OK, it’s time to purchase a wallet.  Then you need to load it with currency.
4. Select a cryptocurrency.  This is a very personal decision.   Perhaps you want BTC because it has the longest track record.   Perhaps you want ETH because of its use within many metaverses.  Perhaps you want  to invest in a more speculative cryptocurrency, like Dogecoin or Cardano.  The choices are nearly endless.
5. Make the trade.

So, how much of my investable assets should be invested in cryptocurrency?

I have seen many answers to this question.   The key attribute of crypto, to my mind, is how variable it can be day to day and even hour to hour.  Given this volatility, I think it’s a  conservative estimate to limit yourself to 5-10% of your investable assets.

What should I do once I decide on a dollar amount to invest?

1.  Get the whitepaper.   Every time there is an initial coin offering (ICO) the management team will write a whitepaper explaining the attributes of this coin.  You should feel totally comfortable with the identities of the management team, the purpose of the offering, and the systems used to distribute the coins.  Be sure to take note of any major investors and their possible agendas.
2. Make sure that your exchange supports the currency you are investing in.  While you’re at it, make sure that there is indeed an active market for that currency.  If it is thinly traded, perhaps you might consider a different currency.
3. Be sure to understand how cryptocurrency is taxed.  If you are trading, then, you will pay a capital gains tax, assuming that you make money.  If you receive currency as a reward for mining or something similar, you’ll be taxed on the value at the time you received them.   So the bottom line here is to keep careful records on your own.  Back these up with documents from your exchange.

What if I am reticent about investing in crypto, but, I want to obtain some of the upside potential?

There are a number of options  here.  You could invest in an ETF which in turn invests in several cryptocurrencies.  You could also invest in a company that has a large investment in cryptocurrency, like Paypal.  You could also invest in a bitcoin trust.  These are offered through normal retail investment firms.

The Verdict

Cryptocurrency investing is very exciting.   Consider it like driving a seriously over-powered sports car.   Can it be a lot more fun than driving a Toyota or Honda?  Yes, it can be.   As you see valuations going up and up, quickly, it can be very exciting.   Can you get into much more trouble much more quickly driving that over-powered muscle car than when driving a Toyota or Honda?  Yes, you can find yourself in a world of hurt where you only wake up in a hospital.  This is why allocation is so important.  I think that cryptocurrency investing is a bit like Brill cream.   A little dab will do ‘ya.

REFERENCES

https://www.nerdwallet.com/article/investing/cryptocurrency

https://www.fool.com/investing/stock-market/market-sectors/financials/cryptocurrency-stocks/how-to-invest-in-cryptocurrency/

https://www.investopedia.com/tech/what-you-must-know-investing-crypto/

https://www.businessinsider.com/how-to-buy-cryptocurrency

Editor’s Note: Please note that the information contained herein is meant only for general education: This should not be construed as Tax Advice.   Personal attributes could make a material difference in the advice given, so, before taking action, please consult your tax advisor or CPA.

 

Is California Dreaming?

Headline: What is the progress so far with California trying to regulate cryptocurrency?

Date: 11/3/2022

Body:  I remember when I was little, I loved watching gameshows, especially The Price is Right.  Whenever there was a car at stake, there would be a huge reaction from the crowd, followed closely by the announcer’s voice.  Rod Roddy would intone all of the features of the vehicle, and always, he would mention, “California emissions.”  So, even 30 or more years ago, California was in the vanguard of states trying to regulate pollution more vigorously than the federal government.  They seem to be continuing that progressivism, as they try to regulate some cryptocurrencies.     Perhaps we can profit by looking closely at their example.

The governor of California signed an order that calls for the state government to consider cryptocurrency regulation along a similar reasoning as the federal government.  (This was after 2 attempts at legislation were shot down or stalled.)  He also seems to want to explore the advantages of using the blockchain model for several state systems.  Per the governor, “Too often government lags behind technological advancements, so we’re getting ahead of the curve on this, laying the foundation to allow for consumers and business to thrive.”   Even prominent individuals disagree on the correct role of cryptocurrency.  Elon Musk supports cryptocurrency, and Warren Buffett opined that he would not pay $25 for all of the world’s Bitcoin.

Why is this so important?

As the Constitution was set up, all states were seen as laboratories of democracy, where things could be tried out in a relatively small area.  If the idea works out well for the state, the Federal Government can then consider whether Federal Law should be changed to match the state regulation.  Well, to put it bluntly, if California were a laboratory, it would be a laboratory that Gill Grissom would just salivate over.   It has 39,000,000 residents and boasts an economy of more than $3.1 Trillion.  More than 400 businesses in the state will take cryptocurrency in exchange for goods and services   It is clearly a big deal.  So, if we get good lab results from California, it seems likely that the Federal Government might try to cheat off of their paper, in an effort to craft reasonable regulation of cryptocurrency.

California is particularly important because of the technology culture that is native to the state.  Ohio tried to start a program where cryptocurrency could be used to pay taxes, but the program was discontinued because so few people used it, that it was prohibitively expensive.  Given that California is the home of Silicon Valley and many tech firms, it seems likely  that there will be more interest in utilizing cryptocurrency to meet everyday obligations like taxes.  In an effort to further these advances, the state of California has christened a Departmenet of Financial Protection and Innovation to supplement the findings of the California Blockchain Working Group.  The Department will take enforcement actions as necessary and create educational resources for the general public on how to avoid frauds within cryptocurrency.  The Working Group is tasked with aggregating ideas of how the blockchain model might be leveraged to help state agencies.

What specifically does this order do?

1.  They have to gain an idea of what state agencies and stakeholders want to see from the installation of the blockchain
2. Obtain Public comment and aggregate this into a report.
3. Begin enforcement of consumer protection laws relevant to cryptocurrency.
4. Develop, manufacture and distribute educational resources relevant to digital assets.
5. Aggregate, review and remediate complaints relevant to digital assets.

The Verdict

In so many different arenas, California is in front of many regulatory attempts.  Some might grumble about “granny states”  but to me, it seems that California might have gotten it nearly right.  Per a spokesman for the Department, “The consensus among staff is that the department and commissioner could regulate virtual currency, to some extent, under current state law. Consumers would be the prime concern of any regulatory structure we build—making sure they are fully aware of the risks associated with virtual currency and providing effective, reasonable safeguards against those risks.”  This seems to be a well thought out middle ground  to regulation: allowing investment, but requiring the buyer to carefully research what they are putting money into.

REFERENCES

https://www.usnews.com/news/business/articles/2022-05-04/california-moves-to-embrace-cryptocurrency-and-regulate-it

https://today.westlaw.com/Document/I3146dd75d5d111ec9f24ec7b211d8087/View/FullText.html?contextData=(sc.Default)&transitionType=Default&firstPage=true

https://www.coindesk.com/markets/2020/09/29/california-governor-signs-law-bringing-state-new-tools-to-regulate-crypto/

https://cointelegraph.com/news/california-becomes-second-state-to-try-regulate-bitcoin

Editor’s Note: Please note that the information contained herein is meant only for general education: This should not be construed as Tax Advice.   Personal attributes could make a material difference in the advice given, so, before taking action, please consult your tax advisor or CPA.