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‘As Good As Gold?’: A Last Minute Reality Check Before Sunday’s Bitcoin Futures Launch
Winklevoss can point to a strong track record as a bitcoin investor.
That's from a new Bloomberg piece on Cameron Winklevoss who, together with his twin Tyler, were variously described by the media this week as "Bitcoin billionaires."
As we pointed out, that would be inaccurate because their stake together was worth more than a billion and you can't take two people who are collectively worth some amount and attribute the label that goes with that amount to both of them. If that logic were soun
So when I buy Bitcoin I get a piece of computer code that has no intrinsic value, and can fluctuate in price 15% in a few minutes?????
Sounds like a good deal to me
Probably the most bizarre loss of Bitcoins – was experienced recent by an associate that thought he could store a thumb drive with his BitCoin wallet on it (off-line storage) – along with a some gold coins – in a hidden excavated niche, under a loose tile, in a closet, under his staircase. All buried behind his old luggage sets, boxes of Christmas decorations, boxes of electric trains that he had as child, and behind the sports equipment that he never uses. He said he placed them all in a double water tight zip lock bag. His concrete house is elevated and well out of any potential flooding.
That was a year ago. Recently with the rapid rise of BitCoin value he thought he would check his wallet consider cashing some or all of BitCoin in before any potential collapse. His math suggested that his BitCoin was now a major store of apparent wealth and a significant portion of his net worth. When he accessed his well hidden niche – he found that some mice has also determined his niche to be a safe place. Unfortunately, and for unknown reasons the mice gnawed through the plastic zip-lock bags, the case of his thumb drive and further gnawing scrambled the electronic connection of the drive – as well – they peed and defecated on pretty much everything he had stored in the niche as they built their nest around and with his valuables – over and extended period during the last year.
He washed his gold cons off and they were as good as new. He found a new place to hide them, this time in steel security box. The BitCoin – not so much. They were totally lost. He had several techs look at the gnawed and corroded thumb drives internals, but they said there just isn’t enough intact to have anything to recover. He wouldn’t tell me how much, but based on some of past stock purchases – I know he doesn’t buy anything in very small lots. He’s a “Go big – or go home type of guy.”
Like a lot of people he bought his early BitCoins as credit card purchases. Now he’s wondering what proof the IRS will require that his BitCoins are indeed “lost and irrecoverable.” His credit card records clearly show his purchase of the coins, the date and their value when he purchased them – a fraction of the current value. He he seems to have no provable loss, but he has created the suspicion of potential recorded gain. While most BitCoin transaction have zero anonymity, one way to possibly achieve anonymity – is in unrecorded face-to-face cash sales of Bitcoin. He has the badly gnawed and corroded thumb drive, but there is no way he can prove that his BitCoins/wallet were ever actually on it – or actually lost with the thumbdrives functionality. He says with a groan, “This year’s taxes are gonna be really interesting.” Because of the size of his potential gain, he is sure that the IRS will be watching his expenses and income records closer than they ever did – waiting to see if he secretly converted his “lost” BitCoin to cash. This means he has to document every expense and purchase in far more detail and securely than he once might have.
The frailty of the grid, internet and the digital storage systems and devices that BitCoin exists and relies on – is a far less secure environment than the average person believes. Blockchain technology only protects the transaction process, but does not protect assets transferred before they enter the blockchain transaction – or after it. A lot of millenials take the internet for “granted” and or “granite” as some say – not being capable of imagining or believing how fast it can disappear. Well, at least millenials that don’t live in E. Texas, Florida, and or Puerto Rico.