BTCF – Module 1 – Q&A

[Chris Coney]

Please post any questions that arose from Module 1 of the Bitcoin Foundation Course here.

Also, if any of the content needs updating this is the place to mention that too.

• This discussion was modified 8 months, 2 weeks ago by  Chris Coney.

[Ken]

Wondering if it is better to buy BTC initially through coinbase, coinbase pro or the celsius wallet?

[Chris Coney]

Definitely not Celsius because their fees are extremely high when you buy inside the wallet. Earning interest with Celsius is fine but I don’t recommend buying bitcoin through them.

Coinbase pro is the best choice because it carries the lowest fees, it’s just that the process is a bit more complex than regular coin base.

[Mark]

I used to use Coinbase pro app. But lately the fees are very high. So now I’m looking for an alternative application.

[Chris Coney]

Have a look at Kraken fees: https://support.kraken.com/hc/en-us/articles/201893638

[Nicholas]

When inputting a purchase into cryptocompare, should I use the total amount I purchased, or the total amount after fees?

For example, I deposited $500 into Gemini Exchange for my first purchase, but only bought a total of $498.25 because of fees associated. Which number should I log? If the answer is a total $500, should I be tracking how much I paid in fees somewhere as well?

Thanks in advance, Chris!

• This reply was modified 7 months, 3 weeks ago by  Nicholas.

[Chris Coney]

Use the total amount you spent. That’s what I do.

If you think about it, as soon as you buy some Bitcoin you are already at a slight loss because you spent $500 but didn’t get the full $500 worth of Bitcoin due to the fee.

When I look at cryptocompare I want to know my real return after fees.

[Markose]

Hey Chris ,

I wanted to check with you and ask you if you have bought BTC or other cryptos from Binance.com. Do you think its a good alternative to Coinbase etc

[Chris Coney]

Yes I use Binance for buying altcoins but I don’t recommend it at the foundation level.

[Laide]

Hi Chris

You mentioned tracking for tax reason. What is the best way to buy Crypto? As an individual or Comapny?

[Chris Coney]

That is a very difficult question for me to answer because tax planning is unique to each individual.

It also depends on which country you live in and so on.

If you are in the UK like me then you may be pleased to know that HMRC recently updated it’s guidance on crypto tax:

https://www.gov.uk/hmrc-internal-manuals/cryptoassets-manual

If that isn’t of any help to you then you will need to consult an accountant with expertise in crypto. My accountant advises me on tax matters.

[Laide]

Thanks Chris,

I live in UK, the link is very useful.

[robin]

Does Celsius offer a standard interest? What if Bitcoin fluctuates down? Is the interest based upon the amount deposited with no change? What is the rate?

[Chris Coney]

Hi Robin,

The interest rate varies every week. As more Bitcoin is available for lending, the lower the interest rate gets.

As more Bitcoin is being borrowed, the higher the interest rate gets.

The rates are all set by the market in real time.

If Bitcoin fluctuates down it doesn’t matter because all the payments are done in BTC. For example if someone deposited 1.0 BTC into Celsius and the average interest rate was 5% over 12 months, their balance would be 1.05 BTC. It makes no difference what price BTC is in US dollars.

The interest rate is the same whether you deposit $10 of BTC into Celsius or $1m.

The current interest rates are displayed on Celsius home page at: https://celsius.network/

[Mark]

What if I take a loan in bitcoins? Will I have to pay the money back in bitcoins?

In that case, if the value of bitcoin falls, I can benefit from the loan.

• This reply was modified 3 months, 2 weeks ago by  Mark.

[Chris Coney]

Generally yes you pay your Bitcoin back in Bitcoin because that is what you borrowed, but it depends on the lending service.

And yes, borrowing Bitcoin is a way of making money on the price going down.