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The number of people and companies using Bitcoin continues to grow at a geometric rate if not exponential rate. Each and every day the website Coindesk.com reports on new exchanges, improvement in security on exchanges, new companies & services accepting Bitcoin expanding worldwide. It would seem that Bitcoin is like a water leak in that once it starts water spreads everywhere and the amount of water continues to grow until the leak is plugged. Only in the case of Bitcoin, there doesn't seem to be any way of plugging the ever expanding Bitcoin "leak".
On Tuesday, March 25 there was the beginning of a Bitcoin conference in San Francisco which is to continue through today. Many of the top dogs in the Bitcoin community were there and spoke on various panels about the various aspects of Bitcoin. I watched some of the conference that was streaming live and heard nothing but positive things about the future of Bitcoin. Of course some of the participants expressed caution about how Bitcoin will be treated by governments, companies and individuals. Which brings me to my next point.
It was only a few days ago that the IRS issued some temporary positions concerning Bitcoin and the taxation they want to associate with Bitcoin. Of course the US government wants to get more and more and more of every dollar its citizens earn so as they can distribute it to people who don't earn it but wanted! This policy of taking from the producers in giving to the unproductive drags of our society has been an ever expanding theme under the Obama administration. I do not wish to go into details about my opinion of the Obama administration now except to say Obama continues to take from producers, expands the welfare state, puts roadblocks in front of businesses and has an exceptionally weak foreign policy which makes their world view the United States as a piece of wet toilet paper. Just don't get me started now.
I've read many things about what the IRS would like to do that would simply be impossible to accomplish. For example, they want to tax the Bitcoins received by BTC miners as income and tax it again as capital gain once the Bitcoin is used or sold. Now what the heck does that mean? The value of the fractions of Bitcoin's earned every day change by the hour so how will it be possible to calculate the income on Bitcoin's earned through the mining process? When Bitcoin's which were mind are used how does the user calculate the Bitcoin bases for capital gains purposes? Then how is all of this reported by the mining pools, the exchanges and on individual tax returns? And how are Bitcoin's treated when the pool in which they were earned is located in a different country? This is nothing but one great big train wreck and it doesn't seem that a solution is attainable!
If on the other hand I buy a Bitcoin from an exchange and then later use that Bitcoin my bases would be what I paid for it at the exchange and my capital gain would be the value I received at the time of the transaction. But will the IRS imposed the cumbersome requirement to report the purchase of a Bitcoin from an exchange by an individual? You can easily see how all these various aspects of mining, buying and using Bitcoin's would be exceptionally burdensome if not impossible. Don't forget that Bitcoin's are anonymous by nature and when bought or sold do not come attached with a Social Security number or tax ID. OMG what a mess!
In spite of all these un-answered questions the news in the Bitcoin community is good. My personal view is that Bitcoin's use will expand dramatically and as a result its value will go up in the months and years ahead. Buy now! I might also mention that Bitcoin continues to generate interest on the Tanzanite American.com website
Over the past six weeks there has been a great deal of activity in the Bitcoin community. The largest or second largest Bitcoin exchange called Mt.Gox filed for bankruptcy and individuals having Bitcoin's on deposit there for the most part lost them. It is still unclear as to what caused this catastrophic meltdown but good news did come out of it. When Mt.Gox was having all its problems the value of Bitcoin fell between 100 and $200 per coin. But in a short period of time the value of BTC rebounded to levels it was at before the failure. That signifies to the Bitcoin community and others the failure of any one exchange will not cause the failure of Bitcoin. Many skeptics were very surprised about the positive outcome of Bitcoin's rebound.
Also during the past six weeks the companies and vendors that will accept Bitcoin as payment has expanded dramatically. He continues to do so today. While there are still many skeptics it is my belief that there's nothing which will stop the expansion of Bitcoin use now or in the future. It is true that BTC is not backed by any government but then again currencies that are backed by governments have fallen in value because of the economic problems certain countries continue to have. What about Italy, Spain and now the Ukraine?
The naysayers on Wall Street point to the fact it has no backing and very little controls of any kind. These people say you could lose a lot if you put money into Bitcoin. Well pardon me but can't you lose a lot if you put money into virtually any stock? What about Bank of America going from $50 per share to $10 per share? Or any number of companies who share values have dropped 50% to 80% or more? Having very little controls I think is a good thing not a bad thing in the sense that no government or other entity controls BTC.
Since TanzaniteAmerica.com has started accepting BTC as a form of payment for their top AAA certified Tanzanite I have been receiving many more calls than usual about the purchase of Tanzanite. When potential buyers discover that TanzaniteAmerica.com offers the best investment grade Tanzanite gemstones at only $750 per carat much activity has been generated and gemstones have been purchased. To my knowledge TanzaniteAmerica.com is the only online source of Tanzanite accepting Bitcoin as a form of payment. Funny thing is no one has used Bitcoin yet although I believe someone will this coming week.
I'll have a lot more to say about both Bitcoin and Tanzanite in the near future. For now suffice it to say that both are doing well. Of course I'm most pleased.