Alt coin trading fun (and how do traders track basis)

[donheff]

About a year ago I took an online Princeton U course on the Bitcoin Blockchain. Blockchain technologies were getting so much hype in tech and finance circles that I thought about speculating with a couple of thousand dollar purchase of bitcoin. Naturally I decided not to bother so I missed the 20X runnup. I'm still interested in the tech and got attracted to the IOTA, an alternative alt coin running on the Tangle, an alternative to blockchain. The IOTA developers are positioning themselves to serve the internet of things so IOTA tokens (coins) have a miniscule value that could be used for IoT machine to machine micro-transactions. You buy them in million IOTA blocks called MIOTA, which yesterday were trading in the $3.70 range.

At any event, I decided I wanted to buy a couple of hundred dollars of MIOTA so I started exploring what would be involved. I already had an empty Bitcoin wallet at Blockcain.info and an account at Coinbase for buying Bitcoins, Ethereum and the like. I learned that there is no way to purchase IOTA directly through US based services like Coinbase. You have to trade on sketchy Asian exchanges like Bitfinex (which has tossed out all Americans due to SEC fears) and Binance.com a Hong Kong exchange that is open to all. A few online references recommended buying Ethereum and using that to buy MIOTA on Binance. So I wandered over to Coinbase and bought $200 of ETH and promptly transferred about half to my wallet just to see what was involved (very easy).

Next, I ventured over to Binance to see how to trade my ETHs for MIOTA. With a little bit of work I figured out how to transfer my ETHs from Coinbase and my wallet to Binance. Then, despite heroic efforts, I could not figure a way to directly trade my ETHs for MIOTA. I suspect there is some simple way to set it up but I couldn't figure it out. It appears to me that all trades have to involve Bitcoin (BTC) as one of the pairs. BTC appears to be their common currency. So I traded my ETHs for BTC and then quickly (BTC is volatile) traded my BTC for MIOTA. I am now the happy owner of 50 MIOTA (50,000,000 IOTA). I still have a few ETH at coinbase and in my wallet.

Now to the WTF issues. This morning I though about cost basis and tax reporting. With my little play it doesn't much matter but for people who are serious about this it could be a big deal. So, back to Binance to see what these alt coins actually cost me. Turns out (again as near as I can tell) that Binance uses BTC as their currency of record. My transaction records showed the time of my trades in UTC, the amount of MIOTA and the price in BTC. No USD values anywhere to be found. To figure that out I had to go to another site that tracks alt coin values and look up BTC for yesterday and run a slider to the UTC times of my trades to get the BTC value in $. Turns out I bought my MIOTA at a combined price of $3.77. Accurate enough for me. I don't plan to sell my MIOTAs any time soon so I considered transferring them to an IOTA wallet but thta turns out to be a bit of an ordeal. I would have to download a wallet building program from Github and create a wallet, If I had serious money involved I would but for less than $200 I just left it at Binance.

But, how in the heck to serious traders track all of this stuff? Technically, I would need to see what I paid for the ETH I initially bought, the gain or loss plus small transaction cost to trade them for BTC, and then the same info trading BTC for MIOTA. What a massive PITA if you were going to trade $thousands. I assume most US day traders use platforms that track all of this stuff. But what about the wild west of alt coins? Anybody dealing with this?

 

[97guns]

I’d like to dabble in some of those ALT coins but I’m afraid to venture outside coinbase and have gone 100% Litecoin, I think I’ll just wait for new coinbase additions instead of moving stuff around, heard they will be adding ripple and maybe others

 

[mrfeh]

But, how in the heck to serious traders track all of this stuff? Technically, I would need to see what I paid for the ETH I initially bought, the gain or loss plus small transaction cost to trade them for BTC, and then the same info trading BTC for MIOTA. What a massive PITA if you were going to trade $thousands. I assume most US day traders use platforms that track all of this stuff. But what about the wild west of alt coins? Anybody dealing with this?

You can export a trading report from binance (it's either a CSV or excel file), and import it at cointracking.info. Then you'll have transaction info in US dollars.

Regarding how to exchange ether to iota - you may very well have to use an intermediate exchange to bitcoin; binance does not support every possible trading pair. However, they do support some that don't use bitcoin; use these whenever possible, as the bitcoin fees are outrageous.

 

[donheff]

You can export a trading report from binance (it's either a CSV or excel file), and import it at cointracking.info. Then you'll have transaction info in US dollars.

Regarding how to exchange ether to iota - you may very well have to use an intermediate exchange to bitcoin; binance does not support every possible trading pair. However, they do support some that don't use bitcoin; use these whenever possible, as the bitcoin fees are outrageous.

Thanks. I will try both. May even go over to Github for an Iota wallet. This stuff is fun (as long as you keep it to chump change). I wish when I abandoned my basement web server a few years ago that I had converted it to a Bitcoin miner.

 

[donheff]

I figured out how to pair ETH with MIOTA on Binace and bought a few more without going thru Bitcoins. I think I will rest on my speculative laurels and wait to get rich sometime in the coming decades.

 

[donheff]

When I bought these things it dawned on me that investors and traders are going to have a nightmare keeping track of capital gains. It may not matter to drug dealers but it should matter to Joe six pack who has other assets the IRS might seize if you don't pony up your fair share of the lucre. Today's Washington Post has an article on the problem. It seems to me some bright programmers should be able to come up with programs that scour the Blockchain itself to mine your transaction data (which is public and clear text). IRS certainly will

 

[omni550]

I wish when I abandoned my basement web server a few years ago that I had converted it to a Bitcoin miner.

Apparently mining bitcoin takes a lot of electricity. (BTW, does anyone know how much?)

Here's are article about college kids who are mining in their dorms, and their universities are seemingly unaware they are paying for the increased electric costs to do so.

https://qz.com/1160667/the-secret-lives-of-students-who-mine-cryptocurrency-in-their-dorm-rooms/


omni

 

[REWahoo]

Apparently mining bitcoin takes a lot of electricity. (BTW, does anyone know how much?)

Here ya go:

According to this https://digiconomist.net/bitcoin-energy-consumption it takes 0.18% of the global electricity consumption. Wow.

 

[FUEGO]

Here's are article about college kids who are mining in their dorms, and their universities are seemingly unaware they are paying for the increased electric costs to do so.

https://qz.com/1160667/the-secret-lives-of-students-who-mine-cryptocurrency-in-their-dorm-rooms/

I can safely say I would have done exactly this in the dorms 20 years ago if it was a thing. I'd keep adding mining rigs till the circuit breakers blew. Get some mech engineering friends to rig up a ventilation system or water cooling system to keep it from toasting us in the warm season. And profit.