Jean Galea

Over the past month or so, interest in Bitcoin and cryptocurrencies has really picked up, especially within my circle of friends and acquaintances. I receive questions on a daily basis, and so I thought it would be great to collect all these questions and attempt to answer them at one go, rather than answer each person individually. Many people have the same types of concerns or hopes when they get interested in cryptocurrencies, so it makes more sense for me to choose the most common questions and answer them for everyone’s benefit.

I will not only be answering the questions here on this blog, I’ve also lined up some very interesting crypto expert guests on Mastermind.fm who will help me tackle the issues that you mention to me.

Just go ahead and fill in the form below to send in your question/s.

So you’ve started buying and selling some Bitcoin, then bought some Ether, and perhaps even ventured further to buy some Dash and Ripple. After some time, seeing that you’re profiting massively, you decide to sell some of your tokens. Some time later, you decide to buy a new token that you believe will revolutionise the world.

The problem is, of course, keeping track of all these purchases and sales. You want to keep track of whether you’re actually turning a profit or not, plus you need to present your results to the taxman come end of year.

So what are your options? Surprisingly few, I discovered.

Here are the three best online cryptocurrency portfolio trackers:

Cryptocompare

This is possibly my favourite of the bunch. It has a clean interface, and while it doesn’t have any exchange integrations (meaning you have to enter all trades manually), it does give you a very clear idea of how your portfolio is performing. You can also add more than one portfolio.

The big issue and deal-breaker is when you need to sell some crypto. There is no way to just enter the crypto you sold and select which cost basis to use.

Let’s side track for a minute and talk about cost basis. Since Bitcoin is taxed as personal property, like shares of stock, investors theoretically have the option to sell their assets on a first-in-first-out (FIFO) basis, a last-in-first-out (LIFO) basis, or to sell those specific tax lots that are most efficient under the “specific share identification” method used for stocks.

Going back to Cryptocompare, imagine you made 60 purchases of varying amounts of Bitcoin, but always less than 1 Bitcoin. At a future point in time you decide to dispose of 30 Bitcoin at one go. You would imagine that you be able to open up your portfolio and enter the sale of 30 Bitcoin as a single transaction, and have the tracker calculate your gains or losses based on all the other smaller previous purchases. But alas, this is not the case. The Cryptocompare portfolio expects you to select the original purchase transactions, and for each of those transactions record a corresponding sale. This gets very messy, very quickly. I was very disappointed by this situation, as I had spent a significant amount of time entering all the purchase trades manually, only to be stopped in my tracks by this issue when I made a sale.

I am still hoping that the Cryptocompare guys fix this issue by allowing us to select which cost basis to use, then enter sales trades separately from the original purchases. Until this is fixed, I wouldn’t recommend using Cryptocompare to track your portfolio, unless you are exclusively buying cryptos and not selling.

Altpocket

This is a social platform mixed with a portfolio tracker. I don’t really care about the social elements, but the interface is very nice. It’s a very new tool that is currently free but will have a price attached in the near future. The biggest issue I have with it is that it doesn’t do automatic imports from Kraken, only Bittrex and Poloniex.

Cointracking

This is the oldest and most complete portfolio tracker. It has a bunch of features and is also available in several languages. Unfortunately it also looks very old and is nowhere as slick as the other two options above. It’s import facilities are unparalleled, however, so if you can forgive the ugly interface, it’s a usable option.

Have you used any other portfolio solutions to track your cryptocurrency? Let me know if you have found something ideal.

This week there’s been some hullaballoo over the comments of JPMorgan Chase chief executive Jamie Dimon, who took aim at bitcoin, calling the cryptocurrency “a fraud” and “worse than tulip bulbs.”

Understandably, this came as a bit of a shock to the lay people who don’t really understand the fundamentals of Bitcoin and cryptocurrencies. This is by no means the first time that someone has pronounced Bitcoin dead or denounced cryptocurrencies, but unfortunately statements from such prominent people always make the news.

Let’s be clear, Dimon’s firm is one of the chief architects of the global financial crisis that led to the interest in a somewhat arcane cryptocurrency in the first place. There would be no bitcoin without Jamie Dimon — and in some ways he’s right to fear its rise.

As a Vanity Fair piece revealed last week, JPMorgan Chase paid out $13 billion (with a “b”) to the U.S. government because of its role in the financial crisis and the mortgage security fiasco that almost destroyed the U.S. economy.

This goes to show that you need to be very careful where you’re getting your news and information from. There’s a lot of purely ridiculous stuff out there, especially in new spaces such as cryptocurrencies.

So to counter Dimon’s arguments, here’s a few of my favourite responses.

John McAfee’s response to Jamie Dimon:

Next, a great article from Marcel Ellis about Jamie Dimon and his hidden agendas.

It is normal and actually recommended to approach Bitcoin and other cryptocurrencies with a criticial mind. They are obviously highly speculative investments and have no intrinsic value. However, they are also a whole new type of asset. To try and compare them to tulip bulbs is just naive, as I discussed in a previous post. There is really no direct comparison to Bitcoin and cryptos throughout history, and that is what makes it so exciting.

Unlike fiat currency, Bitcoin is fully transparent and controlled. We know exactly how many Bitcoins will exist in 5, 10 or 50 years. If you take a look at history and the ways that fiat currency has been manipulated and how many people’s lives were instantly ruined during periods of hyperinflation, amongst other government triggered actions, you would be hard pressed to name Bitcoin as a fraud and not fiat currencies.

To conclude, while it’s anyone’s guess where the value of Bitcoin will be in a few years time, or whether it will still be the leading cryptocurrency, there’s little doubt that blockchain technology is here to stay, and even institutions like banks and governments are investing huge amounts of money and resources into this technology.

If you’re interested in entering the space of cryptocurrency, make sure you educate yourself and follow news from reputable resources. I’ve already compiled a list of great cryptocurrency resources that you can use to start off.