<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>beambot</author><text>Even if you received the BTC for goods and services, and then held them for 5 years and they 20x in value... you still owe capital gains.  It&amp;#x27;s like saying: 5 years ago I sold goods and services for $100, bought stocks with the $100 and now that stock is worth $2000. When you sell the stock, you pay capital gains on $1900; you also should&amp;#x27;ve reported that $100 in revenue from 5 years ago.&lt;p&gt;As for anonymity... you lose it when you associate a bank account to get liquidity (as mentioned by GP: &amp;quot;nominate a bank account&amp;quot;).  Of course, this assumes you can&amp;#x27;t get liquidity in some other way... but that&amp;#x27;s non-trivial with large qty of BTC.</text><parent_chain><item><author>lisper</author><text>&amp;gt; The taxman can verify that you bought your coins five years ago and sold them this year.&lt;p&gt;How?  The public block chain only contains records of how coins moved from one wallet to another.  It doesn&amp;#x27;t have any information about who those wallets belonged to, or what the terms of the transaction were.  Maybe the coins were sold for fiat currency, or maybe they were compensation for goods and services.  There&amp;#x27;s no way to know just from the information in the blockchain.&lt;p&gt;[EDIT]  Let me make this more clear: it is easy to anonymize BTC.  It is so easy that the technique even has a name (bitcoin tumbling) and companies that will do it for you as a service (e.g. &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;bitlaunder.com&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;bitlaunder.com&lt;/a&gt;).  (I thought this was common knowledge around here.)  In the face of these facts, how is the IRS going to enforce the tax code against a someone who tumbles their coins?</text></item><item><author>yason</author><text>You have proof of this as the bitcoin transactions are public. The taxman can verify that you bought your coins five years ago and sold them this year. Multiply those by the BTC exchange rate five years ago and now, and it should be obvious that you put in 5k and got out 100k. You could&amp;#x27;ve bought stock, or other currencies, but you bought BTC and it skyrocketed.</text></item><item><author>branchless</author><text>What actually happens when you try to get out of bitcoin? Let&amp;#x27;s say I put in $5k a few years back which is now worth $100k. I have to go on the exchange and nominate a bank account then sell then they transfer say USD into my account? At this point is this &amp;quot;capital gains&amp;quot; taxable?&lt;p&gt;Assuming I&amp;#x27;m willing to pay the tax if it&amp;#x27;s due has anyone had trouble with authorities questioning your new cash pile say if before this you had no real money and lucked out on Bitcoin?</text></item><item><author>21</author><text>Indeed, bitcoin is the true enabler.&lt;p&gt;But the dangers are pretty high. You never know how ten years from now the digital trail you left comes back to bite you.&lt;p&gt;Cashing large amounts it&amp;#x27;s not trivial. Sure, you can meet in private locations with local bitcoin buyers, but when you have $1 mil to sell it gets tricky, there aren&amp;#x27;t that many buyers in any particular area. And then you have the problem of justifying how you suddenly have one million.</text></item><item><author>bostand</author><text>3. Bitcoin</text></item><item><author>Will_Do</author><text>I feel like this is a new golden age in being a blackhat. Back 5-10 years ago there was no IOT and all databases were password protected by default. Now we have:&lt;p&gt;1. IoT with basically no security&lt;p&gt;2. No(Auth)SQL.&lt;p&gt;Also, dev time has become so expensive, the InfoSec teams in the companies I&amp;#x27;ve worked at have had shockingly low head counts for all the responsibilities they have.</text></item></parent_chain></comment><story><title>Online databases dropping like flies, with 10,000 falling to ransomware</title><url>http://arstechnica.co.uk/security/2017/01/more-than-10000-online-databases-taken-hostage-by-ransomware-attackers/</url></story>
<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>21</author><text>If you want to be legit you&amp;#x27;ll take care of these aspects. For example, I bought bitcoin by moving money through a bank wire to a well regarded bitcoin exchange (Bitstamp). The same for cashing out of bitcoin. So I have a clear money trace.&lt;p&gt;If you mined or gained your bitcoin by buying it through local bitcoin, the taxman might give you some trouble, but generally, the presumption of good will and non-guilty still applies, meaning that if they don&amp;#x27;t agree, it kind of their job to prove that you are guilty of something (ie: you got your bitcoin through ransomware)</text><parent_chain><item><author>lisper</author><text>&amp;gt; The taxman can verify that you bought your coins five years ago and sold them this year.&lt;p&gt;How?  The public block chain only contains records of how coins moved from one wallet to another.  It doesn&amp;#x27;t have any information about who those wallets belonged to, or what the terms of the transaction were.  Maybe the coins were sold for fiat currency, or maybe they were compensation for goods and services.  There&amp;#x27;s no way to know just from the information in the blockchain.&lt;p&gt;[EDIT]  Let me make this more clear: it is easy to anonymize BTC.  It is so easy that the technique even has a name (bitcoin tumbling) and companies that will do it for you as a service (e.g. &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;bitlaunder.com&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;bitlaunder.com&lt;/a&gt;).  (I thought this was common knowledge around here.)  In the face of these facts, how is the IRS going to enforce the tax code against a someone who tumbles their coins?</text></item><item><author>yason</author><text>You have proof of this as the bitcoin transactions are public. The taxman can verify that you bought your coins five years ago and sold them this year. Multiply those by the BTC exchange rate five years ago and now, and it should be obvious that you put in 5k and got out 100k. You could&amp;#x27;ve bought stock, or other currencies, but you bought BTC and it skyrocketed.</text></item><item><author>branchless</author><text>What actually happens when you try to get out of bitcoin? Let&amp;#x27;s say I put in $5k a few years back which is now worth $100k. I have to go on the exchange and nominate a bank account then sell then they transfer say USD into my account? At this point is this &amp;quot;capital gains&amp;quot; taxable?&lt;p&gt;Assuming I&amp;#x27;m willing to pay the tax if it&amp;#x27;s due has anyone had trouble with authorities questioning your new cash pile say if before this you had no real money and lucked out on Bitcoin?</text></item><item><author>21</author><text>Indeed, bitcoin is the true enabler.&lt;p&gt;But the dangers are pretty high. You never know how ten years from now the digital trail you left comes back to bite you.&lt;p&gt;Cashing large amounts it&amp;#x27;s not trivial. Sure, you can meet in private locations with local bitcoin buyers, but when you have $1 mil to sell it gets tricky, there aren&amp;#x27;t that many buyers in any particular area. And then you have the problem of justifying how you suddenly have one million.</text></item><item><author>bostand</author><text>3. Bitcoin</text></item><item><author>Will_Do</author><text>I feel like this is a new golden age in being a blackhat. Back 5-10 years ago there was no IOT and all databases were password protected by default. Now we have:&lt;p&gt;1. IoT with basically no security&lt;p&gt;2. No(Auth)SQL.&lt;p&gt;Also, dev time has become so expensive, the InfoSec teams in the companies I&amp;#x27;ve worked at have had shockingly low head counts for all the responsibilities they have.</text></item></parent_chain></comment><story><title>Online databases dropping like flies, with 10,000 falling to ransomware</title><url>http://arstechnica.co.uk/security/2017/01/more-than-10000-online-databases-taken-hostage-by-ransomware-attackers/</url></story>