Crypto for F#$%ing Idiots! XD

[kaizen-kael]

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. This page describes this very well:



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.

This is a very detailed and well-written breakdown, and I think it covers many of the important fundamentals that people tend to overlook when they first get into crypto. A lot of beginners are usually focused on how to buy Bitcoin or Ethereum, but as you explained, the bigger challenge is really how to use crypto safely, avoid unnecessary risks, and make sure transactions do not attract the wrong kind of attention.


I agree strongly with your point about keeping transactions under the $600 threshold. While the IRS reporting requirements may seem small compared to the old $10,000 rule, the reality is that compliance has become tighter. Anyone moving funds in and out of exchanges like Coinbase or Kraken should already be thinking about the tax implications, especially since exchanges automatically report certain data. Even when using smaller amounts, people should keep clear records for tax season.


Your note about Monero (XMR) is also important. Privacy is a critical issue that many in the crypto community underestimate. While Bitcoin and Ethereum are great for liquidity and accessibility, their transparent blockchains can expose transaction history to anyone. Monero, with its ring signatures, provides more anonymity and helps protect users from unnecessary scrutiny. I also think this conversation ties into other tokens that aim to provide efficiency and utility in the financial system. For example, traders often look at pairs like XRP USD not only for price speculation but also for the promise of faster settlement and lower fees when compared to traditional banking rails.


The reminder about always using personal wallets is one of the best pieces of advice. People forget that if they don’t control the private keys, they don’t fully control their funds. Software wallets like Exodus, or even better, hardware wallets, are must-haves for anyone serious about security.


Overall, this is a great resource. It’s clear that the best approach to crypto isn’t just buying and selling, but understanding the rules of the game, protecting your privacy, and using tools that minimize risks. Posts like this help reinforce that responsible crypto use is just as important as chasing gains.

 

[MindfulBuff]

This is a very detailed and well-written breakdown, and I think it covers many of the important fundamentals that people tend to overlook when they first get into crypto. A lot of beginners are usually focused on how to buy Bitcoin or Ethereum, but as you explained, the bigger challenge is really how to use crypto safely, avoid unnecessary risks, and make sure transactions do not attract the wrong kind of attention.


I agree strongly with your point about keeping transactions under the $600 threshold. While the IRS reporting requirements may seem small compared to the old $10,000 rule, the reality is that compliance has become tighter. Anyone moving funds in and out of exchanges like Coinbase or Kraken should already be thinking about the tax implications, especially since exchanges automatically report certain data. Even when using smaller amounts, people should keep clear records for tax season.


Your note about Monero (XMR) is also important. Privacy is a critical issue that many in the crypto community underestimate. While Bitcoin and Ethereum are great for liquidity and accessibility, their transparent blockchains can expose transaction history to anyone. Monero, with its ring signatures, provides more anonymity and helps protect users from unnecessary scrutiny. I also think this conversation ties into other tokens that aim to provide efficiency and utility in the financial system. For example, traders often look at pairs like XRP USD not only for price speculation but also for the promise of faster settlement and lower fees when compared to traditional banking rails.


The reminder about always using personal wallets is one of the best pieces of advice. People forget that if they don’t control the private keys, they don’t fully control their funds. Software wallets like Exodus, or even better, hardware wallets, are must-haves for anyone serious about security.


Overall, this is a great resource. It’s clear that the best approach to crypto isn’t just buying and selling, but understanding the rules of the game, protecting your privacy, and using tools that minimize risks. Posts like this help reinforce that responsible crypto use is just as important as chasing gains.

Take your chatgpt trash elsewhere bud

 

[ineffectual]

Take your chatgpt trash elsewhere bud

Wonderful first post!

 

[Fiury]

Super helpful post! Many thanks

 

[Orb]

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. This page describes this very well:



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.

Hey man, thanks for the advice!

However, I'm wondering if I have to/should follow this if I live in Canada? Also, what do you mean by 'external wallet'? Do you mean I should have a 2nd physical one, or is Kraken good enough?