Some want to know about the economic incentives of running an Ethereum node. This practice differs from buying and selling Bitcoin or other cryptocurrencies because maintaining an Ethereum node requires more technical know-how from those who seek to make money or earn direct monetary benefits from doing so.
Do you want to learn how to make a cryptocurrency wallet? Storing cryptocurrency is an important part of using it, and newcomers to Bitcoin, Ethereum, and other currencies quickly learn having a cryptocurrency wallet isn’t the only major consideration–finding a service provider you trust is also an important detail.
Before You Make a Cryptocurrency Wallet
Those new to digital currency should not expect to code their own crypto-wallet. You will need to find a third-party provider and finding one you trust will be a major issue. When you search for online articles explaining how to make these wallets, oftentimes you’ll find authors encouraging you to use one provider or another. Should you take their word for it?
Investing in Bitcoin (and other types of cryptocurrency) has definite pros and cons. Are you a newcomer to Bitcoin and digital currency in general? Here are some things to keep in mind when exploring your options for Bitcoin mining, spending, and investing.
Being digital, there are claims that Bitcoins can’t be counterfeited like paper money. That would seem to be a definite check in the “pro” column, but remember that while cryptocurrency may have some advantages in this department over physical currency, there are plenty of scammers out there operating everything from botnet spam email scams to bogus websites designed to look like legitimate operations–this “con” requires Bitcoin users to be more vigilant about the sites they visit and the offers they respond to.
Ledger, a cryptocurrency provider specializing in hardware wallets, has been hacked. The company reports a data breach occurring between June and July 2020 after being altered to a vulnerability. The company was apparently hacked using an API key and the breach included marketing databases containing the email addresses of those targeted for promotional emails.
How many email addresses? Sources report approximately one million. To add insult to injury, a small group of that number also had full names, postal addresses, and phone numbers leaked to hackers.
What often happens to this data is that it is sold, the contact information is often used by hackers to initiate scams or identity theft schemes, and it’s also used to harvest passwords and passphrases from unsuspecting victims.
What is the relationship between cryptocurrencies like Bitcoin and the IRS? I remember starting out as a freelance writer and not understanding how certain tax requirements applied to me–I missed out on thousands of dollars in business-related tax write-offs because I was ignorant of the rules.
The same kinds of problems are possible with cryptocurrency–if you don’t know how the IRS classifies assets like Bitcoin, Ethereum, or others, you could wind up with a tax liability or a set of assumptions about your investment that aren’t in line with reality. It’s best to know the rules before you need them.
What should you know about Bitcoin and the IRS? What follows is NOT to be construed as tax advice–this is information I have learned through my own personal research and I am passing along what I have found works for me personally–your mileage may vary.