Crypto for F#$%ing Idiots! XD

[MFAAS]

I said I'd post a little bit about crypto and I'm bored. I took the day off today because it's gonna be really nice out, but it's 5 AM and I'm up. So as I drink my cavfefe I shall be writing this post to help bring further glory to Meso!

How to buy Crypto is easy. I'm not gonna talk about that really. There's TONS of videos that you can find with a Duckduckgo search or you can use the dreaded youtube and sit through 45 minutes of ads to watch your 3 minute How To Buy Crypto video (I freakin' hate youtube ads, I refuse to use the platform because of them lol).

What is more important is knowing HOW to use Crypto safely.

First, the cardinal rules of crypto:
1. Never buy or sell more than $599 of crypto per 24 hours (preferably only ever few days at most).
2. NEVER send money directly to a source or anyone else associated with gray market (or especially black market) activity.
3. WHENEVER possible, use Monero (XMR)
4. Always report gains/losses on your taxes

So, some of this may already be covered in my post, "Digital Privacy and Anonymity...", but here is the lowdown:

1. Never buy or sell more than $599 of crypto per day (preferably only ever few days at most).
- The IRS now tracks ALL transactions $600 or over. They get flagged for tax purposes. It used to be $10,000. It was lowered to $600 to try to crack down on tax fraud or some stupid crap (even though the real people who are gaming the system are the ultra-rich, this just cracks down on people like us trying to by HGH, gig workers, people who get paid in cash/tips, etc.).

- Specifically important to this is as it can cause issues with the IRS at tax time. Coinbase issues a 1099-MISC that states your ordinary income or capital gains/losses for the year. When there are large transactions that have been "flagged" by this ridiculously low threshold of a transaction limit, it increases the likelihood that questions will be coming your way (or an audit). Keep transactions to low amounts for your own peace of mind.

2. NEVER send money directly to a source or anyone else associated with gray market (or especially black market) activity.
- I've talked about this before and someone else posted a thread here "cryptobanned" that shows what can happen if your Coinbase account is sending or receiving money that is associated with illegal activity. We refer to each Tx as a "hop" (e.g., sending from Kraken to your personal wallet, or your personal wallet to your other personal wallet, or your personal wallet to your source)
2. Having more hops between you and your source ensures you won't get flagged as doing anything naughty and subsequently cryptobanned.

3. WHENEVER possible, use Monero (XMR)

So the standard process is:
1. Get a Coinbase or Kraken account
2. Buy crypto on the platform (bitcoin, litecoin, ether, whatever, henceforth just referred to as "BTC" since it's most common) with your bank account/card
3. Send the crypto from Coinbase to your own personal software wallet (Exodus is great - a software wallet is installed ON YOUR COMPUTER, never keep funds in a cloud wallet that you need internet to get to. If you're not in possession of the wallet file then you are at risk of losing your funds whether it be from theft, the site going out of business, etc.).
4. Then you can send it to your AAS source...

That is the MINIMUM that should be done and it is probably good enough for AAS. However, ideally, you would use something like localmonero or another site to convert your BTC to XMR (Monero).

Bitcoin literally has the source and destination address as well as the transaction (Tx) amount right there, visible to anyone in the world via things like Block Explorer. Basically Bitcoin is actually MORE public than your own bank account because police/investigators don't even need a warrant to look at the transactions. To request bank statements they need an investigation. There is constant automated blockchain analysis going on and is used by the government to flag, progress, and possibly even start investigations into specific wallets, trying to tie them to an owner--and then into the owner.

In contrast, Monero uses a ring signature feature to anonymize a transaction. https://academy.binance.com/en/articles/a-beginners-guide-to-monero (This page)describes this very well:

A ring signature is a digital signature created by someone in a specified group. Given the signature and the group members' public keys, anyone can verify that one of the participants provided the signature. But they can't tell which one did.
The 2001 How to Leak a Secret paper that detailed this construct uses the example of a government cabinet. Suppose that a member of this cabinet – Bob – has some incriminating evidence about the Prime Minister. Bob wants to prove to a journalist that he is indeed a member of the cabinet, but he wants to remain anonymous.
Bob wouldn't be able to do this with a regular digital signature. By comparing it with his public key, anyone could say with certainty that only Bob's private key could have produced the signature. He could face severe consequences for blowing the whistle on the Prime Minister's activities. However, if the other cabinet members' keys were used in a ring signature scheme, you couldn't determine which one sent the message. Still, you could say that a cabinet member leaked the information, thus proving its authenticity.

This technique is used every time you create a transaction, providing you with plausible deniability. While constructing it, your Monero wallet pulls other users' keys from the blockchain to form a ring. These keys effectively act as decoys – it appears to an observer that anyone in the ring could have signed your transaction. As a result, an outsider can never determine whether an output has been spent or not. At best, they can tell that one of the eight outputs in the image below might have been spent. We refer to the number of dummy outputs as the mixin.

Now, there is a company who claims to have been able to do analysis on the Monero blockchain, but i can't imagine them doing this against someone buying gear for personal use. It just isn't practical and would be a waste of time. I don't believe there's been any court records made public where this was used as evidence, even with big busts.

THIS IS WHY IT IS SO IMPORTANT THAT WE AS A COMMUNITY PRESSURE SOURCES TO ACCEPT XMR AND NOT JUST BTC.

Lastly, 4. Always report gains/losses on your taxes:

Look, you're buying and sending crypto to places. Crypto is taxable. You need to report something. Usually unless you're holding crypto for a while you aren't going to see any significant loss or gain. Just keep track of how much you buy (transactions can be exported from Coinbase or Kraken) and how much you send or sell. Exodus has a nice transaction export feature too. From there it is just some simple arithmetic. Add up how much you bought, subtract your transaction fees, then subtract how much you sent/sold. The number is positive: it's the gains for the year. If it's negative then that is your loss for the year. The loss will offset any gains you had elsewhere such as from real estate, stocks, gold, other assets...

That's all that comes to mind for now. Ask any questions you might have, I'll might be a little slow to respond as I'm not on here every day, but hopefully this helps.

 

[Monsterlabstore]

Some really good advice here. Great post.

I would just add. The power of btc and monero is it's decentralization meaning that no company, government, or attacker can gain control of your coins if you self custody them. It's best to self custody, especially when dealing with larger amounts. There's a risk leaving your coins on an exchange and giving a 3rd party control of your coins. The term "not your keys, not your coins" is fairly common in the crypto industry because if you don't control your private keys then you don't have full control of your coins. There's a risk that an exchange can lock your account, confiscate your coins, or a hacker/phisher can gain access to your account. Exchanges like Coinbase, Bianance, or Kraken are very reputable and this most likely wouldn't happen but there is a chance it could happen.

It's best to withdraw your coins immediately after you buy them and self custody in a hot wallet or cold wallet. With this comes some responsibility on the end user to know how private keys work. Your private key is a 12 or 24 word combination that gives you full ownership of your coins. In the event, that your computer breaks or is lost then you can recover your coins with your private key. Never store your private keys digitally. Never take a picture of your private key. Write the private key on a piece of paper or better yet engrave/stamp it onto a metal plate to protect it from fire or water damage. Never input your private key into a website. Never show anyone your private key. If you lose your private key or someone comprises your private key then your coins are gone.

I would suggest any new users to do a couple hours of research and fully understand how private keys work and the security implications around them.

 

[MindlessWork]

Great post! If sources are reluctant to accept XMR directly they should avail themselves of services to convert the XMR to BTC, so they should keep 2 wallets one for XMR and one for BTC. It should not be hard and it would be in the best interests of customer security.

Customers should also take steps to protect their accounts by keeping in mind the warnings in the post so that they don't lose their coin. This should apply to ALL exchanges not just Coinbase as many exchanges most likely be moving towards monitoring customer transactions so THINK before you send crypto directly to a source's crypto address from your exchange wallet.

It would be nice if a source can gladly accept XMR directly as payment. Maybe posts like this should be mentioned on all forums the popular sources do business on.

What great software wallets are out there for those who prefer keeping their coin at hand quickly?

 

[Monsterlabstore]

What great software wallets are out there for those who prefer keeping their coin at hand quickly?

I like Electrum wallet because of it's robust features both for desktop and mobile. It's one of the top wallets the crytpo community points to when wallet discussions come up. It offers many advanced features for more experienced users while maintaining a user friendly interface for novices.

https://electrum.org/

Samourai wallet is another good choice if you're looking for anonymity. It has several mixing features to wash coins offering you several layers of added security an anonymity. It's mobile only and isn't as robust as Electrum but still a decent choice.

https://samouraiwallet.com/

These are both bitcoin only wallets. For Monero, I like Cake wallet because its simple and only focuses on xmr. Exodus wallet is another nice choice as it's a all in one wallet that can store both btc and xmr but I prefer my wallets to store my coins individually. So I use Samourai and Electrum for btc and I use Cake for xmr.

For hardware wallets and cold storage, I use Trezor and Ledger. Both are good options for long term storage.

 

[tuffie]

xdxd

 

[Ksin1986]

The whole reason I used to use it was that it remained anonymous and u did not have to report it. No thanks then. Fucking stupid.

 

[RedXXSouth]

This is not helpful at all. In summary don’t bother using bitcoin? Shit seems redundant. The shit is being tracked it’s not anonymous, it’s inconvenient, time consuming, and not stable

 

[Monsterlabstore]

This is not helpful at all. In summary don’t bother using bitcoin? Shit seems redundant. The shit is being tracked it’s not anonymous, it’s inconvenient, time consuming, and not stable

What's great about an open free market is that people can choose to use what suits them. I support your right to use the method you're comfortable with in exchanging goods and services.

 

[MindlessWork]

Monero is where it's at as it's as anonymous as can possibly be.

 

[tuffie]

It may sound redundant it puts things into perspective how narrative has changed but its still the same, however it puts the receiver (the holder of the btc) responsible to how to exit since they are either 1) Selling the btc for 'x' , or 2) Never going to exit the metaverse. So yeah it sounds redundant but once sent its not your problem. p2p is still king, pseudo-anonymous is great but bread crumbs and the forensic side could catch up to us in the future. FOR EXAMPLE "IRS sent me a letter about this [insert reason here] back from a 2015 tax file." and this example is using our current system. Imagine the new system, considering its all connected and the faster computers get, so will them auditing the tx from wallet<->wallet. It may be a prevleidge to be part of the 2.0 era , a world of glass, NFT houses, etcetc. Its already being built. So just be cautious now-a-days if making big tx moves unless you know people around the world where the laws arent that strict (yet).

The trick is how to get to XMR anonymously... or any crypto-currency anonymously. How to obtain it anonymously. Because its only being tx between wallets and not being off-ramped. The walls arent completely closed in, but the risk is greater and greater.

 

[Bill23138]

Great but how in the fuck can you buy crypto without giving your ID or ssn in 2023?

 

[Monsterlabstore]

Great but how in the fuck can you buy crypto without giving your ID or ssn in 2023?

You can look into local sellers that you meet and trade in person. Localbitcoin is a site that does this. You can also buy monero on coinbase or another exchange... they will need your details but then you can send the monero to an exchange that doesn't require kyc. Kucoin is a exchange that doesn't do kyc and then trade it for btc... basically washing the transaction history. Depending where you are you can use a btc atm too... some don't require kyc under a certain amount but they usually tax you like 10%.

 

[Bill23138]

You can look into local sellers that you meet and trade in person. Localbitcoin is a site that does this. You can also buy monero on coinbase or another exchange... they will need your details but then you can send the monero to an exchange that doesn't require kyc. Kucoin is a exchange that doesn't do kyc and then trade it for btc... basically washing the transaction history. Depending where you are you can use a btc atm too... some don't require kyc under a certain amount but they usually tax you like 10%.

Yea they just need your ID. Come on dude you know they can track you with id

 

[4ttude44]

My thought regarding 'absolute anonymity' was that I could perhaps use $5, $10 or $25 Amazon gift cards to buy BTC. Then, using whichever wallet I choose, I can purchase whatever I like. The point being that the gift card is untraceable afaik - the purchaser and the one who claims the card is obfuscated... It takes a little time to unpack and enter codes for 10-20 cards, but at least it affords an individual some level of privacy.

 

[Bill23138]

My thought regarding 'absolute anonymity' was that I could perhaps use $5, $10 or $25 Amazon gift cards to buy BTC. Then, using whichever wallet I choose, I can purchase whatever I like. The point being that the gift card is untraceable afaik - the purchaser and the one who claims the card is obfuscated... It takes a little time to unpack and enter codes for 10-20 cards, but at least it affords an individual some level of privacy.

Is this possible?

 

[tuffie]

Is this possible?

It is, but most of those sites require some form of KYC (phone number, etcetc), and they charge anywhere between 25%-15% markup. so if ur buying 100$ worth with a gift card, you only recieve 75$ , then they charge another 10$ for you to transfer it. Keep your btc instead.

 

[tuffie]

You can look into local sellers that you meet and trade in person. Localbitcoin is a site that does this. You can also buy monero on coinbase or another exchange... they will need your details but then you can send the monero to an exchange that doesn't require kyc. Kucoin is a exchange that doesn't do kyc and then trade it for btc... basically washing the transaction history. Depending where you are you can use a btc atm too... some don't require kyc under a certain amount but they usually tax you like 10%.

localbitcoins is dead, paxful kyc, most of these sites scam with a +25% markup.

By the time you get to the 10% tax tx, the other 2 tx took 30%. Just putting into perspective. It is what it is.

Cheapest route imo (with anonymity at risk): Pocket->Exchange->trc-20

Otherwise the scam price for anonymity has to be paid.

The ironic thing about the silk road bust was all the merchants in order to conduct business there sent the owner Real ID's. It really does come down to the operator of the platform to keep a clean business deleteing/wiping encrypting and throwing away the key this critical info.

 

[Bill23138]

It is, but most of those sites require some form of KYC (phone number, etcetc), and they charge anywhere between 25%-15% markup. so if ur buying 100$ worth with a gift card, you only recieve 75$ , then they charge another 10$ for you to transfer it. Keep your btc instead.

So sounds like if they don't ask for your ssn they need your ID. Basically there is no way to buy crypto without either ID or social. Defeats the entire point of crypto. Now all deals are traceable via bitcoin wonderful system we have here.

 

[tuffie]

So sounds like if they don't ask for your ssn they need your ID. Basically there is no way to buy crypto without either ID or social. Defeats the entire point of crypto. Now all deals are traceable via bitcoin wonderful system we have here.

Either:
1) Mine a shitcoin
2) pay cash for a crypto currency
3) pay the huge tariff for pseudo-anonymity

End.

 

[maryslittlegoat]

It may sound redundant it puts things into perspective how narrative has changed but its still the same, however it puts the receiver (the holder of the btc) responsible to how to exit since they are either 1) Selling the btc for 'x' , or 2) Never going to exit the metaverse. So yeah it sounds redundant but once sent its not your problem. p2p is still king, pseudo-anonymous is great but bread crumbs and the forensic side could catch up to us in the future. FOR EXAMPLE "IRS sent me a letter about this [insert reason here] back from a 2015 tax file." and this example is using our current system. Imagine the new system, considering its all connected and the faster computers get, so will them auditing the tx from wallet<->wallet. It may be a prevleidge to be part of the 2.0 era , a world of glass, NFT houses, etcetc. Its already being built. So just be cautious now-a-days if making big tx moves unless you know people around the world where the laws arent that strict (yet).

The trick is how to get to XMR anonymously... or any crypto-currency anonymously. How to obtain it anonymously. Because its only being tx between wallets and not being off-ramped. The walls arent completely closed in, but the risk is greater and greater.

very helpful, thx