Tag Archives: Digital Life

I got into Bitcoin Mining today

So, I got paid today. Nothing special, happens every two weeks. But Today I decided to give cloud mining a try. See, since 2008 we’ve seen a new type of currency propagating across the internet. Digital Currencies that are decentralized, and not bound by the good faith and credit of any one government. The first of these was Bitcoin, which is still the most popular and recently had a hard fork with Bitcoin Cash due to a debate on scalability.

Bitcoin is not the only digital currency though, you have others like LiteCoin and Etherium, both of which are supported on the bitcoin exchange wallet service Coinbase.com.

Now, I found a cloud based mining company that takes its maintenance out in bitcoins you mine off their hardware. Not so bad when you consider how much it takes to get started. I gave then $30USD/0.01 BTC and started up. Now, I won’t know exactly how effective this is until the first payout, so I can’t go into it now, but if it’s not all I lost is $30USD.

But let’s assume that I make back that $30USD. Then proceed to let the mining go on to make a bit more. From what I can tell for tax purposes these are all covered under the same regulations as any currency trading. So, I’m going to have to put back about 50% of anything I make for Capital Gains Taxes next year.

Still, 50% of something is better than all of nothing.

I’m thinking of reinvesting into the process as I make more BTC. I will take the first 0.01BTC after my tax savings are considered and get started on Ethereum mining on the same services. Cost about $29.99USD for 2 years. I can improve on that over time hopefully as I add power to the mix.

But what does this all mean in the long term? I’m assuming for tax purposes that all of this is covered under US Tax law, and that saving back 50% of it should be sufficient. To my knowledge no one pays more than 50% taxes on IRS. Any better information would be appreciated. But even then, all my digital currency at the end of the year will need to be dealt with in taxes as US Dollars. Not a bad thing, or a good thing, just the currency of the country I’m a citizen of.

I’m all for anyone who has knowledge into this world I’m stepping into.