3 Things: Bitcoin & other Cryptocurrencies

What is a Cryptocurrency?

A cryptocurrency is a digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of this security feature. A defining feature of a cryptocurrency, and arguably its most endearing allure, is its organic nature; it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation.

Read more: Cryptocurrency Definition | Investopedia https://www.investopedia.com/terms/c/cryptocurrency.asp#ixzz53upjIFMb

1. To Bit or Not to Bit_ What Should Investors Make of Bitcoin Mania  (Dimensional) (downloads as a pdf)

“Unlike stocks or corporate bonds, it is not clear that bitcoins offer investors positive expected returns.”

2. Should You Buy Bitcoin? Ask a Different Question First (Carl Richards, The New York Times)

“The question we should be asking ourselves is this: Does buying Bitcoin fit into my investment plan?”

3. What You Need To Know About Taxes & Cryptocurrency (Kelly Phillips Erb, Forbes)

“In 2014, the Internal Revenue Service (IRS) issued guidance to taxpayers (downloads as a pdf) making it clear that virtual currency will be treated as a capital asset, provided they are convertible into cash. In simple terms, this means that capital gains rules apply to any gains or losses. But taxes are rarely simple. Things can get complicated very quickly.”

And: How a Criminal Defense Attorney Thinks About Crypto Currency  (Aaron M. Goldsmith, PC via Josh Brown)

Additional Reading:

• The Fatal Mistake Crypto Investors are Making Now (Josh Brown)
• The 6 Most Important Cryptocurrencies Other Than Bitcoin (Prableen Bajpai)
• Bitcoin Mining On Track To Consume All Of The World’s  Energy By 2020 (Newsweek)
• No, bitcoin isn’t likely to consume all the world’s electricity in 2020 (CNBC)
• Man Accidentally Threw Bitcoin Worth $108 Million In The Trash, Says There’s ‘No Point Crying About  It’ (Newsweek)

SAGE Serendipity:  On New Year’s Eve we gather with friends, make predictions for the year ahead, throw a dollar or two in the pot, and have fun reading them 365 days later. This year’s winner, Dominic Cupo!  It’s not too late to do this with your friends and family. CNN has a “crystal ball” page with some great questions to get you started, or it’s just a fun read. Only one CNN expert predicted the Eagles in the Super Bowl. What?!?