Anyone here using Bitcoin?

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Forums › Finance and wealth management › Anyone here using Bitcoin?

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1474 posts

Uber Geek

#472993 23-May-2011 14:43

stevenz:
If you sell them then is it like selling an asset or treated as pure income?

"Intent" is fundamental to income taxation. Is the intent in "mining" bitcoins to derive income, pretty much, yes I'd have to say, on any scale such as has been talked about here.

Once intent to derive income is established, the IRD has pretty much all the evidence they need to call it income and take their share, regardless of the type of income.

---
James Sleeman
I sell lots of stuff for electronic enthusiasts...

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cdouble

91 posts

Master Geek

#472996 23-May-2011 14:51

Once intent to derive income is established, the IRD has pretty much all the evidence they need to call it income and take their share, regardless of the type of income.

Interesting thanks. Is gambling income taxable in New Zealand (Lottery, Casino, Horse Racing, etc)? The act of mining is described as a lottery. There is a random chance of a miner hitting the correct combination of random numbers that earns them the coins for the block. I can see bitcoin income earned from buying/selling/work as a clear case of taxable income. I'm not sure about the mining process.

I suspect if virtual currencies become popular such things will be covered in legislation at some point to ensure something favourable to the IRD.

nobz

30 posts

Geek

#473006 23-May-2011 15:05

vfxguynz: It's been a few days, and I have a few BTC....

Nobz, how do you sell them? MtGox doesn't do paypal :-/.

I used to sell them at...
bitcoinmarket.com
bitmarket.eu/main/lang/en

Becareful on who you're trading with. Paypal has a charge-back feature and paypal is very anti bitcoin right now, freezing accounts that do bitcoin transactions.

I sell them directly to an exchanger now.

cdouble:
Interesting thanks. Is gambling income taxable in New Zealand (Lottery, Casino, Horse Racing, etc)? The act of mining is described as a lottery. There is a random chance of a miner hitting the correct combination of random numbers that earns them the coins for the block. I can see bitcoin income earned from buying/selling/work as a clear case of taxable income. I'm not sure about the mining process.

If you win in a constant basis you need to pay your taxes. If you win lotto here in NZ you don't pay tax or you win over a 1milltion for example in a casino in one day you still don't need to pay taxes.

However if its constant winnings you need to pay taxes. Let's say you win 10k per month or every 6 months and etc..., you need to pay your taxes.

(I don't know if my statement with the constant winning is accurate though, but one time or random winnings is true so far according to my accountant/lawyer friend.)

vfxguynz

34 posts

Geek

#473014 23-May-2011 15:18

Whats the contact that you sell too :P
I might check out bitcoin-otc on freenode later when I get home.

1080p

1332 posts

Uber Geek
Inactive user

#473341 24-May-2011 10:16

http://blogs.computerworld.com/18335/bitcoin_miners_busted_police_confuse_bitcoin_power_usage_for_po...

Hahaha!

nobz

30 posts

Geek

#473349 24-May-2011 10:49

vfxguynz: Whats the contact that you sell too :P

I might check out bitcoin-otc on freenode later when I get home.

I PMed you his details.

1080p: http://blogs.computerworld.com/18335/bitcoin_miners_busted_police_confuse_bitcoin_power_usage_for_po...

Hahaha!

LoL!!! How much units (kilowatts) does pot-farm generate per day? Both of my rigs combined eat 1.7ish kilowatts per hour total.

eXDee

4029 posts

Uber Geek

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#473399 24-May-2011 12:43

I have an alright gaming rig - i7 870 + HD5850.
How does this bitcoin thing work? Where to i begin and what software should i be using? All very interesting and new to me.
How does the pooled mining work?

How does exchange into real money work?

nobz

30 posts

Geek

#473405 24-May-2011 12:56

eXDee: I have an alright gaming rig - i7 870 + HD5850.
How does this bitcoin thing work? Where to i begin and what software should i be using? All very interesting and new to me.
How does the pooled mining work?

How does exchange into real money work?

You need two softwares...
You need the bitcoin client which stores your coins and also your transaction tool. (And you should never give out the wallet.dat file to anyone!!)

and

You need the miner software.
Browse in this forum...
forum.bitcoin.org/index.php?board=14.0

You can either solo or join a pool to get a steady payout (recommended today because of current difficulty).
Also browse in the same forum...
forum.bitcoin.org/index.php?board=14.0

Exchanging into real money is the hardest part. You need to trade your BTC to someone for cash in the market and can take time and is very risky. Sometimes the buyer is very impatient and might abuse you that they want there BTC right now, but I wait til I see the money in my account and then I transfer it to their receiving address using the bitcoin client. (Not all buyers are like this)

Pm for more details.

JodiTheTigger

13 posts

Geek

#473439 24-May-2011 13:42

Ok,

By my calculations, if the difficulty keeps going up by 30% every 10 days, and the exchange rate doesn't increase past 8 USD/btc, then mining will become unprofitable mid August. That is, power consumed would be > bitcoins earnt converted to NZD (assuming 0.26c / kwh).

If your going to start mining, I would suggest you factor in the resale value of the rig you are setting up. Maybe set it up as a gaming PC so it can be sold easily.

Secondly, selling bitcoins for NZD cash is quite hard. I only have one person that buys off me, and if he stops buying, then I would have to open an account at mtgox, and trade there instead. The downside of that is that to get from mt gox to NZD, the fees would chomp between 5-20% of the value (larger transfers = smaller fees, I calculated 20% fees for transferring 50btc @ 7 usd).

my current mining rigs are:
Main PC with a 6870 @ 975 Mhz - 270 Mhash/second
SLI intel mobo with a 1gb 6950 @ 840 - 325 Mhash/second
and a unlocked 1gb 6950 @ 840 - 351 Mhash/second
Media PC with unlocked 2gb 6950 @ 840 - 357 MHash/second
Dad's PC with a 6870 @ 900 Mhz - 250 Mhash/second

So I mine at 1553 MHash, and have spent $1855 on the video cards, and $600 on the other computer bits.

I have made $1107 from mining so far (I started mining seriously on the mid March).

So, at the moment I need to make another $1348 to pay off the capital, then I'm happy. Problem is, that based on my calculations, that won't happen till October, well past the time I calculated mining to be come unprofitable.

So, I can only hope the exchnage rate keeps going up (currently at 7USD/btc).

freitasm

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#473446 24-May-2011 13:51

If you don't want to mess with command line and configurations, check http://forum.bitcoin.org/index.php?topic=3878.0 for a GUI front end for a CPU/GPU miner.

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freitasm

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#473451 24-May-2011 14:03

By the way, my HP laptop goes up to 24 Mhash/s, and the Dell Zino HD goes up to 5 Mhash/s only.

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cdouble

91 posts

Master Geek

#473484 24-May-2011 14:44

Secondly, selling bitcoins for NZD cash is quite hard. I only have one person that buys off me, and if he stops buying, then I would have to open an account at mtgox, and trade there instead.

Ping doublec on the #bitcoin-otc channel if you're looking for a backup buyer (unless I'm already that one person...)

lokeynz

102 posts

Master Geek

#473488 24-May-2011 15:01

JodiTheTigger: Ok,

By my calculations, if the difficulty keeps going up by 30% every 10 days, and the exchange rate doesn't increase past 8 USD/btc, then mining will become unprofitable mid August. That is, power consumed would be > bitcoins earnt converted to NZD (assuming 0.26c / kwh).

What happens to your calculations when you factor in that the last difficulty jump was 56% in 9 days, the next is estimated at 60% after 8 days.

JodiTheTigger

13 posts

Geek

#473926 25-May-2011 13:58

I just have a spreadsheet that I update every difficulty increase, I assume 30% increase on the last difficulty (though If we keep averaging 50-60% I might need to revisit that assumption)

However to answer your question, it just means that the mining stop date is earlier, and that I make less money.

freitasm

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#473930 25-May-2011 14:01

I'm running GUIMiner on my laptop, and with 23 - 24 MHash/s (GPU) I'm seem to be getting about 0.05 BTC every eight hours or so... I'm running it only when my laptop is on and docked, so it's not like a "mining rig". But it's good to see how it all works.

I did accept a BTC payment for a Geekzone Subscription and it worked well. AAAA+ will do it again ;)

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