If you had no idea what a cryptocurrency was yesterday….

…then doing a little search-fu on:

Dogecoin bobsled jamaican

probably cleared that up for you.

“Dogecoin” is based both on the lamest meme of 2013 and the original cryptocurrency, “Bitcoin”. It’s a bit of a joke and a bit of a serious currency all wrapped up together in a bunch of speculation about how the IRS would tax earnings on any realized gain.
I’m going to speculate here and say that some form of cryptocurrency is posed to become the next world’s reserve currency (please see caveats noted below) and the last thing the IRS is willing to do is to issue clear rulings on how to pay your taxes on any realized gain. Not being a tax attorney, the best guidance so far about the issues involved seems to be here. Worth exactly what you paid for it. I don’t expect the IRS to issue anything anytime soon because doing that would go a long way in reducing the FUD surrounding widespread adoption. Expect any future issued rulings to be as byzantine as possible.

Despite my feelings on the future of bitcoin, litecoin, dogecoin, and other cryptocurrencies; investing in these things remains highly speculative. Don’t bet the farm.

Even though Dogecoin probably can’t be counterfeited, willed into existence, or “double-spent”; it isn’t immune to having it’s exchange rate being manipulated by well-funded players and world powers. I’ve also seen an amazing number of users fall for scams that scream “Ponzi scheme” and “confidence game” to any reasonably well-read person. Dogecoin of course is a fiat currency, (just like federal reserve notes.)

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3 Responses to If you had no idea what a cryptocurrency was yesterday….

  1. Pingback: SayUncle » If you had no idea what a cryptocurrency was yesterday

  2. Phelps says:

    It really does put the gummint in a pickle. They can’t simultaneously say, “these things are worthless, but we are also going to tax your “worthless” gains as income.” If they want to take the taxes, they have to acknowledge it as a currency. (If they simply acknowledge that it has value, then it fits all the other criteria for a currency, mainly scarcity, liquidity and fungibility.)

  3. >It really does put the gummint in a pickle.

    What would be cool is if we could get some failed democratic-republic of fraud – I’m thinking Zimbabwe – to adopt Bitcoin as an official currency. Then you could ignore any gains below a certain threshold the same way you could if you realize a profit from pre-buying some Euros for a vacation trip.

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