I would be very surprised @Rthursty if Choice even contemplated a review of hardware or software cryptocurrency digital wallets.
I would also be surprised if the moderators even allowed members to post advice on devices they used, given the nature of cryptocurrency trading and the risks.
Google search is there and good luck with your endeavors.
First, get your power station âŠ
BitCoin mining and digital currencies are forecast to continue to expand. The consequences are increasing demands for electrical energy.
Would it be better for the environment to ban the current systems, and seek low energy alternatives?
Approximately 2/3 of the energy comes from fossil fuels, which could be retired. The balance from renewables could replace other fossil fuel sources.
Some describe BitCoin as a system whose virtual value is more like a pyramid investment scheme than a secure currency. 21st Century âfools goldâ!
Do we really need blockchain based digital currencies (virtual IOUâs in my head space) or is there a better way?
The part of all this that I find hard to follow is how bitcoins can be seen as a genuine investment, either for the returns or for a place to put your money. Aside from the possibility of manipulation what happens if a much cheaper computation algorithm or (more likely) a much less energy intensive computer is built? The very dangerous part is that such developments donât have to be demonstrable, if enough punters believe they exist, of will soon, the effect is the same.
So maybe we look at it as a form of gambling instead. It is a tribute to the faith of gamblers the world over that they all believe they can get out in time because they are smarter than the others, or that a crash for what ever reason will not happen. A classic case where insiders stand to rape the punters in their droves and the punters wait for it to happen with a smile on their faces. Greed is a wondrous thing.
The original idea of Bitcoin as a virtual currency has not eventuated. It is too volatile in value to be trusted for traditional transactions, and is more often seen as a vehicle for illegal transactions. That has the attention of authorities all around the world.
In Australia holding Bitcoin is seen as holding not currency, but an asset.
Look out for capital gains tax, because the ATO knows all about your holdings.
One should seek independent tax advice in relation to any cryptocurrencies one may hold or have traded. The ATO have announced that in 2020-21 financial year income tax returns, they will be specifically placing those those who invested in cryptocurrencies under the microscopeâŠ
What many new investors, who have jumped onto cryptocurrency speculation, donât realise is that companies which allow financial transactions within Australia are required, by law, to report transactions to the ATO. These are linked to individual taxpayers. Those transactions which are required to be reported to the ATO includes wages/salaries, banks, social security, superannuation funds, investments (including cryptocurrencies) and the list goes on.
Caveat Emptor.
What a classic.
Allâs well that ends well?
I get adverts and dump them unread. Just not prepared to take a chance.
Another cryptocurrency issue.
Whatâs it got to do with banks if Aussies want to put their savings or investments into crypto currency? Itâs just another place to put your cash right?
Interested in another form of gambling? Once upon a time share trading was between you and a broker. The bank was happy to handle the cheques. These days every bank offers a share trading account and service.
Banks are generally risk adverse, and even more so since the Royal Commission.
I suspect they struggle with cryptocurrency businessesâŠcryptocurrencies do not have any legislated or intrinsic value (arenât legal tender) in Australia and a proportion of use are associated with scams, money laundering etc (far more than traditional currencies). Cryptocurrencies also are used to bypass traditional tracing and tracking (e.g. Austrac) requirements.
A bank may think accepting a cryptocurrency trading business has high risks both reputationally and legally if it is found all the trading through the business isnât legal/legitimate.
Until it is legislated as legal tender, the banks may not change their approach in relation to such businessesâŠit is interesting that the Reserve Bank is contemplating a cryptocurrency. I wonder if it comes into fruition, it is the only one which is legislated. A strong argument would be a Reserve Bank cryptocurrency would have stronger consumer protections than those developed in the wild west.
It does not seem to be a problem for the ATO, which treats them as assets of value.
In fact holding cryptocurrency as an Australian is perfectly legal. So is owning platinum bars or diamonds. Neither are legal tender, and like cryptocurrencies both are subject to the market. Debatably both have an intrinsic value. Some Diamonds in particular have much greater value for simply being big rather than their true value as dust used by industry.
Weâve long lived with the lust for precious metals and jewels. Items with far less practical value than genuine need. And remarkably banks have backed investments in mining and owning both. If the world economic order collapsed cryptocurrency, diamonds and gold will all have the same intrinsic value. Itâs just a hunch!
What price then of seed for grain?
The ATO doesnât treat them as an asset. It treats their sale, and associated profits or loss, as income for tax purposes.
They currently donât have a intrinsic value. They have a speculative value and currently are similar to gambling on a horse race or even a pyramid scheme. It will remain this way until such time they are legislated as legal tender.
They are different to
as cryptocurrencies has no physical presence their value is perceive and not based on something which would be considered intrinsic.
If there was a major world calamity, like traditional currencies, they can collapse or disappear- are are far from being a rock solid asset. In some ways their collapse is higher risk than traditional currencies as their value is driven by speculation and sentiment. This has been evidenced recently when there is ânewsâ about a cryptocurrency which substantially affects its value. Cryptocurrencies have come on gone, and will continue to do so in the future.
The Reserve Bank is correct in their statement that they currently have no intrinsic value.
In a nutshell,
Are you arguing the banks have taken a moral stand to defend customers from Cryptocurrency?
The alternate view point is the banks simply want to block a new form of competition, by what ever means they can.
Most will agree there is risk in buying into cryptocurrency. Itâs not really currency in the way we think of cash based money. It might have been better to call it crypto bonds or crypto promissory notes or âŠ. possibly even crypto shares.
Traders bet every day on variations in the relative value of currencies. They put up hard cash against a notional value. A currency can go from hero to zero in days. If those diving into cryptocurrency understand this, that is all we should need to say.
Note:
Itâs treated as a Capital Gain, or loss. If that is not an asset then what is?
Note per the ATO:
The term cryptocurrency is generally used to describe a digital asset in which encryption techniques
In context,
The reference was to diamonds and gold. There was zero intent to suggest cryptocurrency has an intrinsic value.
In the early days banks issued their own bank notes - promissory notes. The value of which, referring to such events as the Panic of 1825 was as likely to evaporate.
I wonder if there is any significant point of difference between how value will be assigned and transactions secured in a future cashless economy, and the way forward created by the cryptocurrency pioneers.
There is more than sufficient evidence of criminal use of the Aussie dollar, and our banks benefiting from it.
P.S.
I only paid for the 5 minute session.
Yes and no, the banks are potentially trying to avoid using their banking systems for transactions known to be rife with fraud, scams and theft. There are potentially genuine and honest trading businesses, but since cryptocurrencies are unregulated and unlicensed, a financial institution wonât know which are genuine or no.
When a bank knowingly facilitates transactions, they may take on some of the responsibilities for these transactions.
You are mixing up concepts. Income isnât an asset and an asset isnât an income. Selling of cryptocurrencies can result in income being generated. There were reports from cryptocurrency spruikers that any one cashing out their bitcoins and make a profit, that the income was tax free due to the way that cryptocurrencies work by potentially bypassing usual financial and taxation institutions (i.e. untraceable in some respects).
The ATO has come out stating that this is not the case and any income generated by the cashing in of cryptocurrencies (profit) is to be treated as income for tax purposes.
Cryptocurrencies are not an asset at this point in time (but maybe a tradable virtual commodity), but something which individuals are willing to pay in an attempt to make money. They have a worth (price one is willing to pay), but are not an asset. If they are regulated/licensed, then they may become an asset as their worth/price may become realised.
Cryptocurrencies have no value at this stage as they are only bytes somewhere. If these bytes had a value, then everyone would be millionaires/billionaires by buying a terabyte drive and filling it with data.
The closest I have worked out cryptocurrencies to be in tangible world is a race horse. If a race horse is winning races, more punters will punt on it as it is likely than others to win more racesâŠallowing punters to potentially make money. The result being that the price that one (or investors) ae willing to purchase the horse if it is sold increasesâŠsay to many millions if it shows a lot of promiseâŠas they have potential to male money from future wins (Bitcoin is a good example of this). If the horse races, falls and breaks a leg and has to be put down, what investors are willing to pay for the dead horse is very differentâŠit would be zero. It is worth noting that the dead horse may become a liability to the owners rather than have a net positive worth (a bit like any cryptocurrency that fails, the left over bytes are worth nothing and may have a negative worth as they sit as data taking up space that otherwise could have been used). The race horse doesnât have an intrinsic value. If it did, if it died, it would retain a value. It is like just like cryptocurrencies.
Where the stakes chance is where a cryptocurrency is regulated or licensed for use. Then the crypto value is attached to a tangible item, like existing currencies, and therefore have a value.
There are systems in place to reduce criminal use of currencies. While not perfect, some of the banks have recently been found not to uphold their legislative requirements which provided an opportunity for criminal behaviour. While there may have been oversight lacking at that time, the door has closed and any transaction which should have been reported, has now been reported.
It doesnât stop scammers or fraudulent businesses setting up accountsâŠbutâŠin Australia we have a proof if identity attached to the bank accounts. This ensure that those which have been set are are attached to individuals who then are responsible for the accounts. With cryptocurrencies, one of the âadvantagesâ often provided is that they are almost impossible to trace, especially while they are unregulated/unlicensed. This poses challenges to the financial system knowing that is genuine or not. This can be easily fixed by their regulation/to be legislated.
Whilst not the original intent, cryptocurrencies and especially Bitcoin, are a conduit for criminal and scam activity. Likewise exchanges that facilitate trading and investing in virtual currencies are not subject to any type of oversight and monitoring. Some are scammers, and a number have been hacked.
Until this âwild westâ is properly regulated, banks should be very wary of being involved by having a relationship with these exchanges.
On that we have very different views.
I donât trust the banks motives. The Royal Commission established the same.
I totally do not understand the concern is with the ATOâs definition of cryptocurrency as an asset, or how it is treated for CGT. No need to comment. The ATO seems to know what it is doing.
There a numerous examples of the many and varied circumstances for investors, as well as those carrying out basic financial transactions. Personal use appears to escape any need to assess for taxation purposes. The notes also clarify for a business payment, EG Bitcoin.
