Cryptocurrency

Cryptocurrency, Horror Story

How the IRS want me to bend over backwards to torture myself over when reporting Bitcoin taxes

I have been day trading cryptocurrencies for the past few years and I have made a LOT of money doing this. Because of the nature of day trading, I have made thousands and thousands of orders across dozens of different exchanges and accounts. This has resulted in me making a massive amount more than I would have if I just followed the HODL principles that lots of people seem to blindly follow. I’ve made a lot of money and I understand that the good ol’ U.S. of A. wants to get a fair share of my hard earn profits. This is no different than if I was trading stocks or anything else and I’m more than happy to pay them.

The problem is that the IRS demands that EVERY SINGLE TRANSACTION is to be recorded. And the IRS also expects that every single one of my thousands upon thousands of trades must have an attached USD value (when none of them actually have any because it is done in coin pairs). I mean what is the point in calculating a ETH to BTC trade in USD? What is the point in recording the transactions when I trade them back and forth a second later? This isn’t even bringing up the point that the USD value or each of these cryptocurrencies fluctuates by a massive amount on a minute to minute basis. Changes of 1% or more happen from minute to minute. Changes of 10% are common within an hour. To have to try and calculate the fictional USD value of each trade when it occurs is pure nonsense. I have done so many transfers that on multiple occasions my trade history has been totally wiped out. So even if I had the time and motivation to sit down and do the work on each transaction it’s not even possible…

Finally, if the IRS thinks my calculation is incorrect or somehow off, it will be up to ME to prove otherwise, so I’ll essentially be “guilty until proven innocent”.

I’m going to a tax attorney or CPA and have them deal with it, but even then, I have a strong feeling that they will just be as clueless as me. I’m hoping to pay it off as a capital gains tax and be done with it. I’m more pissed on how much headache I have to go through to report this than the ACTUAL money I am giving up…

Share
Cryptocurrency, Horror Story

What it feels like to be an bitcoin early adopter? I could have been a millionaire.

I bought acid for “$200,000”. Sounds crazy? Well here’s a small journey of a young adult discovering crypto to becoming where I am now (mid 20’s). A successful man with a wonderful job, a successful crypto trader (not crazy, maybe 7k gains the past year), but someone who could have been a millionaire.

So around 2009, I started getting into pot as any bored Northeastern American boy likely does. Being the poorer kid at the rich school leads to a lot of weird feelings, seeing all the toys the rich kids have and seeing them as bored as me. We are talking dirt bikes, top of the line gaming, rifles and guns galore. Daddy owns boats and a yacht. And me? Well my family was getting by around 80k a year total. Luckily those same kids had the drug connections. Pot back then of course was a weird thing and still pretty big deal in our area, like it is gonna ruin lives and yada yada yada.

But ok enough of that. I had a friend that blew glass and made pipes and jewelry, and, he tended to have his ear to the ground better than me. Let’s name him Dan. We graduated high school and started college, and, we both wanted ways to make more money. So Dan heard about “the Dark Web,” the mystical awful place that we all probably know well now (but back then, it was fucking crazy). At the time, the Silk Road was in its first incarnation and we had a field day when we discovered it. We found all the drugs we wanted to dabble and try (mainly psychedelics, we knew to avoid the dangerous stuff). Guns and a number of other illicit materials were available too.

That was a shock obviously and then we discovered. Huh…. They are paid by…. 
Bitcoin?

And boom, we dove in. We sold his pipes and glass work to buy acid, ether (not ethereum!), shrooms, pure mdma, dmt whatever. It was coming straight to our door. It was amazing. What a summer, exploring and discovering the world in a new light. We were buying from a guy in Arizona who basically said he was a biochemist at university and refused to say anymore. I think it was Walter White.

But back to what matters. Bitcoin. The Blockchain back then was simply just an anonymous payment where we could get anything. Of course the danger of this also shows in other areas too, but whatever, enough drug crap. Bitcoin was worth about… Maybe 5 cents or so when we used it? We obviously went through a lot. The biggest thing in my mind is remembering at the height of our escapades BTC hit a dollar. We had 300 at the time and spent it on cannabis seeds and a few other final parting gifts. We both got yelled at by our ISP’s for torrenting games and music, so we got spooked.

So 300 dollars of bitcoin basically.
300 bitcoin.
Let that sink in.
300…

Flash forward to April of this past year, a coworker and me talked crypto and I knew it grew… I knew how much, to be honest I see it as hindsight. We never knew it would be what it is today. We literally had what would have been about 2 mil then. I traded all through the year successfully and saw it grow. By the end of the year BTC was worth fucking 18k. The 300 btc would be 5 mil. So doing the math out, I bought acid for likely around $200,000.

Yeah. It hurts a little. But at 17, 18, you don’t think for the future. No regrets. I got to watch this journey of technology and currency in a very different light and I’m proud to still be a part of this. More active than ever, here’s to crypto future and changing the world. We are going to be the creators of our new world. Cheers!

Share
Cryptocurrency, Horror Story

Always research your coins! I lost 400 bitcoins investing in altcoins.

I made pretty much every single stupid mistake possible and when I look back I just want to kick myself in the ass. That said, feel free to laugh at my stupid mistakes, but hopefully learn a thing or two and not make the same mistakes that I did.

In May I bought a significant amount of Bitcoin (just over 500 coins). I really had faith in the technology and in the future of Bitcoin. My plan was to hold them forever as pretty much everywhere I looked, analysts were predicting great things and I really felt that it would easily hit somewhere over $10K before the end of 2017. If I had done the right thing and HODL then I would be sitting pretty with a huge profit, but obviously I didn’t do that. I started to read about altcoins and some of the incredible profits people were booking just by doing some short term trading. I decided the action was too hot to dismiss so I started off with Antshares (now re-branded as NEO, obviously not a very good sign). I put 10 Bitcoins in to Antshares and within 3 days it had gone up enough that I had made around 10 grand. I thought there was no way that I could see that kind of growth and profit just sticking to Bitcoin so I came up with a new strategy. I would buy altcoin low and sell high, because I figured that was the easiest thing in the world to do. It really did seem like a pretty foolproof strategy. Especially as long as I didn’t panic and I made sure to HODL.

By the time the end of June rolled around I had invested almost all of my Bitcoin into altcoin. Initially it just kept going up and up. I was in heaven and I literally thought the sky was the limit. There are a lot of things I should have done differently, like keeping more in Bitcoin, like slowly booking some of my altcoin profits and transferring back into Bitcoin or maybe just researching the altcoins I was putting my money into. I didn’t do any of those things and it cost me. I won’t give you the full list of all the altcoins I bought and how much each of them lost, but just know that the average altcoin I put money into lost about 60% of its value and after pouring around 500 BTC into altcoins I now have a value of about 100 BTC.

I’m sure many people might be asking why I didn’t put in stop losses, or why I didn’t book profits or why moved over so much money into altcoins in the first place. The one and only answer is GREED. I thought it would just keep going up and I was too stupid to put any kind of security in place in the off chance that it didn’t. I know how stupid this was and how stupid I am.

I still kept all the altcoins even though they are at a loss. Once they started going down, I knew the only response was to HODL and just pray that they would go back up. Even though though I am so tempted to sell them all and stop any future losses. I’m just hoping that they will get back to the original value, so I don’t need to take the huge losses. I know that BItcoin is still THE investment for the future and I would do anything to go back and undo those trades where I gave away my BTC for nothing.

Share
Cryptocurrency, Horror Story

Attempted to buy a girl’s virginity with bitcoin, but it took too long…

I am a pretty big nerd and I haven’t had very much luck with women in my life, but I have been able to earn some money on the whole Bitcoin gold rush.

I was looking through a forum and came across a girl in Russia selling her virginity. I’m a virgin too, so I thought it could actually be romantic or something. She was 18, so the whole thing would be legal (if slightly shady and maybe a little pathetic). So I chatted with her a bit and she seemed like a pretty awesome girl and I really thought that there might be something there. So finally I sent her the 1.5 BTC she had been requesting, but the transaction was pending so long that by the time she acknowledged she had received the BTC, she said that it was too late.

She had already had sex with 3 guys and 2 of them was for free!!! I can’t believe it because not only am I still a virgin, but now I also wasted 1.5 BTC for nothing. She isn’t even talking to me anymore. What do I do? How do I even get my Bitcoins back?

Share
Cryptocurrency, Horror Story

Your bitcoins can actually “expire” with mining pool accounts.

I had done some Bitcoin mining a number of years ago. I was part of a mining pool, but stopped doing that because I didn’t think it was going to be that profitable. I hadn’t really thought anything about it until the recent huge run up of Bitcoin with all the news and everything, gaining over 2000% in 2017. I was obviously very excited at the prospect of how much my old BTC would now be worth (I was thinking in the neighborhood of $50,000-$100,000).

I went to log into my account, but couldn’t log in anymore as it said my account had been deactivated. Then I went back to scour through my email account and found an email from the mining pool saying that my account hadn’t been used in over a year and would be deactivated in 20 days if I didn’t log in. Needless to say I didn’t read the email and obviously didn’t log in to keep my account active. So just a warning to everyone, keep your mining pool accounts active and always READ your emails or you may lose out on a chance of a lifetime!

Share
Cryptocurrency, Horror Story

Changelly secretly monitors and waits for the chance to skim money off your transactions.

I want to make sure that no one else uses Changelly as they are not honest and they out to exploit their users. It may work for you for a few times, but in the end you will get burned and when you do it will for some serious cash!

I had done some small transactions on Changelly before, so I was comfortable with the service and everything else. But for some reason this time was different. I sent a large amount of Bitcoin and it was shown on the Blockchain that they received it, but I still hadn’t received the Bitcoin Cash I converted for. It was over 10+ hours after the transaction had been confirmed.

In the meantime, as I was waiting for my transaction to confirm, there was a HUGE pump on Bitcoin Cash. I was obviously really excited, as even in that small time frame I was set to book a significant profit (almost 50%). I was already counting my money and was pretty happy about the whole thing while I was still waiting to receive my BCH.

Imagine my surprise when I finally received my BCH (almost 12 hours after initially sending it) and it was at the current exchange rate, not the rate when I transferred my Bitcoin!!!!

So basically I believe that Changelly takes your coins then waits to see what the market will do:

  • If there is a run on the coin, they take all your profit and then send you a lower amount than you should receive.
  • If they get your coins and the market goes down, they just give you the regular amount you should receive.

There’s no way they can lose, since they are getting coins that aren’t theirs and are then holding on to them (for short time periods) to them profit on them.

I sent them an email complaint and received a support ticket number, but I didn’t hear anything back for over a weeks. All I received was automated emails surveying my satisfaction. Really!?! They hadn’t even done anything to help me. I’ve submitted so many other tickets, but each ticket just keeps getting cancelled or ignored.

All you need to do is do a quick search on the Google for “Changelly” and “ripped off” and you will find lots of stories like mine.

Share
Cryptocurrency, Scam

Signed up for a fake insider-tips telegram group.

I was sitting in a telegram group for this ICO called FLiK, I really liked the channel, everyone in it was pretty active and had high hopes for the coin. I kind of invested in it blindly, to be honest with you, I didn’t even read the whitepaper.

But I saw posts and people talking about T.I being behind the project or something. So, I thought to myself, that’s pretty cool. If he makes some posts online this token will probably moon hard. He never did, but that’s not the point here.

In the telegram chat, there was a guy talking about some kind of pay-to-see group that supposedly had access to crypto industry news before anyone else. I thought it was kind of stupid, but apparently groups like that do exist. Additionally, people have made money with them. So, I decided to join it. The fee was 1 Litecoin, and the guy showed me some screenshots that made it believable.

I said okay, and he added me into a chat with another person and said that he was an admin of that group and whatnot. Okay, I sent them the Litecoin and they told me to wait for a few minutes. The guy who pulled me into this scam actually called me right after I sent him the Litecoin and told me that I was gonna get an email soon with some additional information.

Alright, I got up off my computer to go make a sandwich.

Come back to my laptop later to see that the chat with those two guys is gone, they blocked me. I started going nuts in the other group chat where I first met the scammer. He already got banned at that point.

I think I lost like $50, not so much, but still annoying.

Share
Cryptocurrency, Scam

I trusted an old classmate, but then he swindled my bitcoins.

I’m just getting into cryptocurrencies and a lot of the aspects are pretty confusing to me. I know how to buy Bitcoins, Ethereum, and Litecoins on Coinbase. But I have no clue about how to invest in ICO’s, but I really wanted to because I read posts on Reddit about how people were making an absolutely savage amount of money from getting in early. So, I was reading an article and found some info about this one ICO called Bitair.

I did a little due diligence, read the whitepaper, looked at their presentation and searched up some videos on YouTube. The project seemed pretty legit to me, but I was still confused as to how I should go about investing.

I made a post on Facebook asking if someone could help me. This old classmate of mine messaged me offering to help. We got on Skype and he asked me if I had a wallet on MyEtherWallet, which I didn’t. Because I have only been using Coinbase up until now, I don’t trade, I don’t do anything like that. I would just buy Bitcoins whenever I had some disposable income and would sit on them.

We go on Skype, and I’m not really understanding all of the nitty gritty technical details. So, this guy tells me to download Teamviewer. He goes on my computer and we run through the whole process of transferring ETH from Coinbase to my wallet. We agree to Skype again once I receive the ETH.

We do, and he tells me that he has the Bitair address to which I need to send it to ready. He types it in and says that I’m all good now, and should go and check my balance on Bitair.

I went on a few hours later and my balance was 0.

I think he transferred my 1 ETH to his own wallet, I’m pretty sure that’s exactly what happened because the guy blocked me and I have no way of contacting him anymore.

Share
Cryptocurrency, Horror Story

btc-e falsifies reasons to lock your account and steal your bitcoins.

I was banned by btc-e for absolutely no reason at all. I asked the support team why they banned my account and they couldn’t give me a good reason. All they said is that my account was banned because it was spamming links in their chat box that contained a virus. They never showed me any proof. No link, no screenshot. They eventually stopped responding to my support tickets as well and half of the time they spoke to me in Russian when they did respond.

What bugs me the most is that I can’t pull out the funds I have on my account, but I can still make purchases… Like come on really? What adds fuel to the flame is that the ban is forever set so you can’t use the chat features, withdraw cash or coins.

I didn’t stop though, I kept trying to contact them every day and I threaten to file a lawsuit against them.

Finally after a month of constant hounding and about twenty support tickets, they remove the ban and I immediately withdrew all my money.

Share
Cryptocurrency, Scam

Googles ranks the phishing sites over the real crypto ones.

I always use a tumbler to make my bitcoins anonymous, but I couldn’t remember the exact URL of the one I usually go to. So I just googled “bit blender” and opened the top result thinking that it was my go-to tumbler. I was careless and didn’t notice that what I had opened was actually phishing site, a complete carbon copy of the tumbler I used. I went to the login page and put in all of my login information. The site looked identical and the deposit page was very similar to the one I was used to.

I thought something was off when I saw a lack of transactions in my history. The bitcoin blender that I usually use shows you a history of all of the wallet addresses that have been used prior. I just assumed that the site eventually deletes the history after a while and continued on with the transfer.

I sent a little bit over two hundred dollars worth of BTC to the address shown on the fake site.

I waited a little bit, but I wasn’t seeing any traction, so I checked the support page as well as blockchain.info to make sure that my transaction had been verified. It was already confirmed four times.

I messaged the “support team” to see what went wrong and got no responses at all, I then realized I was actually on a fake site.

I went back to the homepage of the fake site to use some made up credentials to log in, it worked, and on the deposit page I saw another address (not mine). I tried logging in again with another set of fake credentials to see that the wallet address changes every time…

Share
1 2 3 4 … 7