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Do I pay taxes on Bitcoin if I don't sell?

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Not today you don't, but gold or Bitcoin, which do you guys trust?

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With your teeth, you voted for gold, I noticed.

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You have to work hard to knock that tooth out, by the way.

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Yeah, I was wondering how that happened, but we'll be mining gold from now until forever.

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What the U.S. military does for the U.S. dollar.

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17 aircraft carriers, so nuclear-powered, of course.

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You're nuts.

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Nothing burger.

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Bob will give you the exact hash rate.

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It's going to go to a million, then I think it's going to 10 million.

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You have to be prepared to see this asset go down 50% and think to yourself, I want to buy more, not I made a mistake.

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In a five-year time frame, Bitcoin generally always works out.

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Here we go with my friends George Bodine and Bob Burnett.

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We get questions. We've got answers. We'll do a lightning round on these, okay?

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I'll read the question.

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I'll give my answer briefly.

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Then I'll let Bob and George weigh in.

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First of all, do I pay taxes on Bitcoin if I don't sell?

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Not today you don't, although the Democrats might try and change that.

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In the Netherlands, I think they were talking about unrealized capital gains taxes.

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You have to have a capital gain to pay a tax.

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So today, no.

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In the future, maybe.

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If the social is getting power.

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That's my answer to that question.

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What do you think, Bob, George?

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Well, assuming most of the listeners are in the U.S., that's the case.

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There are places where even realized gains are not taxed.

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You can do a Google search to find some of those countries.

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So if you're sitting on a large stack and you're worried about this, you can maybe find your way to a residency or something like that in one of those countries.

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I think it's one of the big unknowns for us is what the future holds on taxation.

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One of the issues that needs to be resolved, though, is the idea of capital gains on transactions. If you're using Lightning and you're making payments for certain things, you know, technically you're supposed to be declaring every one of these transactions. And I do and pay my taxes on them.

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But nonetheless, if we're going to see Bitcoin take off in the future using it as a base of money, which I believe Bitcoin is, then we're going to have to get the de minimis from Congress, maybe $500, something in there, or just, again, treat it as money and stop the capital gains.

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That's a great point.

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You're right to be thinking about taxes, but the real trap is holding a Bitcoin IOU.

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you. That forces a taxable sale just to exit.

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Swan Real Bitcoin Exchange converts your ETF shares like GBTC into real Bitcoin in your

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name, structured to support a tax-deferred outcome.

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Stop renting your Bitcoin. Own it. Book a call with the Swan private team at swan.com

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slash boomers.

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renting your Bitcoin. Now, back to the show. Next question, how much Bitcoin do I need to retire?

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So it depends on how much you spend and what retirement means for you. I think the best way

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to address this would be to look at the power law. Bitcoin does a 10x every, you know, five or six

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years. You know, it went one, 10, 100, 1,000, 10,000, 100,000. I think it's going to go to a

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million. Then I think it's going to 10 million. So if you look at the power law model, and there

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lots of places you can find that online.

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You can work backwards from the date when you're going to retire to where we are today

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and look at what the price will be and then ask yourself what kind of a lifestyle you're

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going to need and you can figure it out.

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I think that young people who own a couple of Bitcoin are going to be in very good shape.

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Older people intended to retire earlier and have an expensive lifestyle need more than

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a couple.

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So that would be my answer.

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Bob?

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Yeah, obviously there's a million factors that play into this.

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I would just add that I don't think you should ever stop acquiring it.

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I like that.

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Just keep building that stack.

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Someday you're going to have enough and you're going to say,

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hey, I think I have enough plus a lot of cushion.

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And you can retire but still keep adding I like that Yeah I can add anything to that That a good way to end that Keep stacking Okay Next question Bitcoin isn backed by anything is it So I would take an

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argument with that. I think these two guys would as well. Bitcoin is backed by the most powerful

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computer network the world has ever known or seen running at, I don't know, Bob will give you the

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exact hash rate, but the amount of capital investment and electricity and power that's

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used to secure this ledger is something that's kind of off the scale of computer networks.

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And so, and the security of the ledger is what gives it its value.

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You know, we immutably know that there will only be 21 million of them.

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If you own one, it cannot be taken from you.

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And because of this hard cap on the limit of the number that's enforced through the

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strength of this network, that really is the backing. And so to say it's backed by nothing

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isn't correct. I mean, you know, and in a funny way too, the dollar really isn't backed by anything.

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It's the full faith and credit of the United States. How's that going to work out? So I think

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a computer network, an immutable computer network that has billions of capital invested in it and

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requires a lot of electricity to run, I think that's a lot of backing. What do you guys think?

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You asked for some stats.

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Yeah, it's about 900 exahashes of compute power consuming 165 terawatt hours of energy annually.

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And that is essentially equivalent to, for Bitcoin, what the U.S. military does for the U.S. dollar.

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Yeah.

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In fact, about, I think about two years ago, the power behind the network was equivalent to about

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like 17 aircraft carriers. So nuclear powered, of course. So, I mean, yeah, it's a pretty powerful

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network. You know, the other thing is that it's proof of work. I mean, that is what makes the

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network. You know, we have so many centralized proof of stake, whether they're shit coins or

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if it's a fiat dollar. And I would say in every one of those cases, you'd be very hard pressed to

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make a case for anything that's behind that.

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asset. Whereas with Bitcoin, I'm confident I can just look at the chain and I can just tell you

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there's proof of work behind this and it takes work. I mean, that is the magic of Bitcoin.

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The magic is work. 17 aircraft carriers of verifiable work. But you don't own the work,

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you own the result. At SAS Mining, own the rig that does it. Power at cost, a maximum 15%

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management fee. And the coins go straight to your wallet. Own the creation.

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Sazmining.com slash boomers.

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Wild sets.

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Now, back to the show.

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And this one ties into the next question. I think the question, what backs it? And of course,

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the next question is gold or Bitcoin, which do I trust long term? And I think there's an

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important distinction to make here, right? They're both sound money. They both have

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scarcity. Bitcoin is more scarce than gold. That's important. And growing ever more scarce. We'll be

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mining gold from now until forever. And so the supply does grow, albeit slowly at 1.7% a year.

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But you can touch and feel gold. It's analog sound money. It's hard to touch and feel Bitcoin.

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It's like a set of digits on your screen, but it's every bit as real because of the power of

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the network behind it. Just as you can't touch and feel the dollars in your bank account, and they

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may not actually be there in terms of pieces of paper. They are a representation of the wealth

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that you hold. And so, you know, it's not physical sound money, but it is technical sound money

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that's immutable. So as to which do I trust long-term, I'd say both. Although I think that

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Bitcoin has a lot more upside than gold. I think it's a lot more asymmetric. I think that we live

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in a digital world and everyone who wants to own gold or doesn't, you know, wants sound money knows

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about gold probably own some and I think over time they might be swapping their

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gold in for Bitcoin so I like the the price the future price profile of

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Bitcoin much more than I like the price profile of gold and I could actually even see one day when gold value on a relative basis is very diminished kind of approaches more like a jewelry value because Bitcoin has just

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suppressed it. But that's decades away. And in the interim, they'll both work. So

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that's kind of how I view it. But gold or Bitcoin, which do you guys trust?

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bob and of course yeah of course yeah yeah you know i i i mean i'm uh i come from gold bugs you

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know my parents were gold bugs i remember them bringing gold coins home back in 75 when the

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public could first buy one of the first things my dad did was go out buy gold coins i remember

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sticking them in the rafters and i think we buried them in holes and all kinds of other shit but

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But so I'm a gold, you know, I've always had gold and it used to be part of my portfolio for a long time.

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I wouldn't even, you know, I wouldn't mind holding physical gold again, you know, just and running around the backyard in the middle of the night, you know, dig some holes or something.

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I could see me doing that.

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But for the digital world and the digital, the future and with AI, I mean, it's digital.

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It's just not going back.

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So I'm a big fan of Bitcoin.

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But with your teeth, you voted for gold, I noticed.

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You have to work hard to knock that tooth out, by the way.

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Yeah, I was wondering how that happened.

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That's hard.

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We won't go there right now.

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Okay, final question.

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I watched Bitcoin drop 50% once already.

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What should I tell myself when that happens again?

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And how much is too much to have at the age of 71?

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Great question.

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That is.

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Yeah.

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So, one, I think you have to tell yourself, I've always told people who are buying Bitcoin,

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and you have to be prepared to see this asset go down 50% and think to yourself,

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I want to buy more, not I made a mistake.

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No matter where it is, that's always got to be in your mind because it's a volatile asset.

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We all know that.

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You don't get the upside without being prepared to have the drawdowns.

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How much is too much to have in it at the age of 71?

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I think it depends a lot on your spending profile and your time preference.

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I think if you're 71 and you're reasonably healthy, you can expect to live into your 90s.

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you know I mean I think the three of us have a very large percentage of our

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assets in Bitcoin but you know I think what the number really gets driven by

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what could you stand in terms of a 50% drawdown and I always like to say to

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people in today's world based on the macro conditions that we see if you don't

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have 20 or 30% of your assets and sound money you're nuts and by sound money I

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I mean, gold, silver, and Bitcoin.

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And a lot of us, like me, and probably these guys, have 80% of our assets in sound money.

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But, you know, it's, hey, it's no fun watching one of your assets decrease 50% in value.

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So I think the boundary conditions for somebody who's 71 years old is kind of a minimum of 20% and a maximum of 80%.

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And you ask yourself, how much are you willing to stand the volatility?

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You know, and part of that volatility is, I mean, in a five-year timeframe, Bitcoin generally always works out.

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So, you know, you ask yourself, am I going to need any of this money in five years?

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The answer is no, you're not going to need any of it in five years.

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Well, then you can stand to hold it through whatever happens, right?

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That's kind of how I look at it.

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What do you guys think?

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Go ahead, George.

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Well, I'm with you, but I will say that, I mean, having gone through these drawdowns, I mean, they do take a toll.

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You know, the one down to 75, 80%, you know, when you get down in that ballpark, it takes a toll on you mentally and maybe physically too.

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And so you don't want to be 71 years old and staring at a ceiling at 3 a.m. and know that you're being very uncomfortable.

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And if you're uncomfortable with a 50% drawdown, I mean, you should revisit maybe some of your philosophy here.

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Because quite frankly, I think that this drawdown has been incredibly benign, drawn out and basically a nothing burger.

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So that's just me.

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And then the other thing I'll say before I just let this go is that, you know, you should be thinking maybe about who you're stacking for.

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You know, I live a lifestyle where I don't need to get into my Bitcoin.

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I don't have to have my Bitcoin to live on.

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I don't need it.

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And so it's just there.

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And what am I doing that I kind of building for a future if not my future maybe for somebody else maybe my kids grandkids I don know you know something like that What do you think Bob I piggyback on that George

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And so my grandmother, who lived to 94, 95, somewhere in there, ended up bankrupt at the end of her life because she was in assisted living and then nursing home.

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and basically the way the medical system worked is they force you into bankruptcy.

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Yeah.

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And so if I were 71, what I would more be looking at is more like,

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hey, if you've got Bitcoin, get it into some sort of trust or some sort of mechanism.

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By the way, that could even be self-custody.

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that's kind of off the radar that insulates that wealth

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and gives it a chance to move to the next generation.

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Because the more that you use these institutionalized solutions,

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the more exposed that is if you end up in an unfortunate situation.

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you've endured the volatility but belief doesn't pay the hospital bill

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with leaden borrow against what you own your bitcoin stays in custody not lent out not sold

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ownership uninterrupted leaden.io boomers keep bitcoin unlock life now back to the show

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um one thing uh larry i think we got just a few minutes there was a bonus question here that came

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up in the chat what is it well and it was it was directed to me so i'll let me just hit it quick

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but you guys can add on it says um bob explain what will happen to blocks that are mined on the

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bip 110 fork will those transactions be invalid or do they somehow go back into the mempool

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So for those of you that had followed this,

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at block height 961632 is when the fork occurred.

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So both chains respect all transactions

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and all ownerships processed before that point.

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After that point, you have to think of them

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as almost two different worlds.

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So a block, for instance, mined on the BIP110 side,

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will include transactions only respected on the BIP-110 side.

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So if you sold somebody a bicycle for some Bitcoin

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and they did it on the BIP-110 side,

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they have transacted and sent you BIP-110 coins

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and they didn't send you what I would call Bitcoin.

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So make sure you get a fair price for that.

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By the way, to the miners that mined a block on the BIP-110 side, they will receive block rewards in BIP-110 money, whatever that ends up being called.

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And so they're doing work for that chain from that point forward.

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So the transactions are not invalid, but they're only valid on one of the two sides.

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and uh so uh if you have questions about that but you can even dm me if you're out there if

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you're concerned about it i don't want i don't want this sort of thing to turn into another

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cold card kind of situation where people get confused or get scammed or whatever and you know

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i'll help you if i can or we'll direct you to somebody who can but if you're not sure don't do

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it uh or don't accept don't don't send it or don't accept payment for it if you're not sure

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well said

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good advice

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thank you Bob

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I think that concludes

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another episode

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of questions for

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Bitcoin Boomers

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love you guys

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thanks guys

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it was really good

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to be with you

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enjoyed it very much

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thank you for your

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contributions

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I'll see y'all

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bye now

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thank you

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bye bye

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Bitcoin Boomers

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Bitcoin Boomers

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you