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Keep Your Crypto | How to Guard Your Digital Wealth Against the IRS

LooTzFeb 7, 2019, 2:39:23 AM
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With the increasing awareness of cryptocurrencies, the question of how to regulate them has been the main focal point for regulators. Commonly viewed as money for making illicit transactions, regulators have a sense of urgency to create strict guidelines regarding their use, traceability, and how they’ll be taxed.

Each country has its own regulating body regarding taxes, but due to the United State’s influence on the rest of the world, the decisions of the Internal Revenue Service held a great deal of sway.

When Bitcoin was created 10 years ago, the overall idea behind it was to create a form of digital cash that did away with all intermediary services. In other words, a genuinely peer-to-peer currency. Fast forward 10 years and Bitcoin, along with many other altcoins, have created a profound splash in the world of traditional banking.

This upending of the status quo has sent regulators with the IRS scrambling to figure out where cryptocurrencies lie. Are they an investment? An asset? Spendable cash? Do they represent capital gains? Should they be a security? These are all questions still being debated, and yet, the IRS along with major exchanges such as Coinbase claim that you do in fact owe taxes on them.

Due to the complete lack of clarity, users will be better protected if they safeguard their digital wealth, first and foremost, before even considering paying the IRS and their hasty virtual currency tax plan.

The Best Blockchain to Anonymize Your Crypto

When it comes to keeping your crypto wealth intact, there isn’t a better option for anonymizing your accounts than with a strictly privacy-oriented cryptocurrency. After cycling through the code and each blockchain’s main anonymizing functions, Pirate Chain stood out amongst the rest.

Pirate Chain beat out better-known currencies such as Monero, Zcash, PIVX, Komodo, and Zen Cash. Although Pirate Chain is based from Zcash and Komodo, it implements its own unique functions that allow it to shine in giving its users total freedom.

Pirate Chain utilizes the state-of-the-art zk-SNARKs to obfuscate addresses when creating transactions. The cryptographic model allows for both ends (sender and receiver) to become entirely anonymous. This function of privacy is completed all while allowing network consensus to validate the transaction and enter it into its ledger; all without ever compromising its clients.

Although Zcash was the first to bring zk-SNARKs to the rest of the crypto community, they failed to only allow private transactions. Instead, most users on the Zcash blockchain utilize the public send address, which is inherently not private.

Another main issue is that the majority of exchanges that list Zcash have already stated that they will not utilize shielded (private) addresses to keep users accountable. Pirate Chain, on the other hand, will only allow anonymous transactions; therefore never compromising its users.

Recently, Coinbase has issued tax newsletters, alarming many critics and drawing conclusions that Coinbase is, in fact, trying to keep themselves in good standing with regulators. Interestingly enough, Zcash is a listed asset on Coinbase, and although the first to shed light on zk-SNARKs, the exchange has already announced they will not honor shielded addresses.

This also comes at a time where there are many blockchain analysis groups that have been contracted by agencies such as the IRS and other regulatory and banking institutions. These firms are used to compile data on crypto users, and to effectively pair public wallet addresses with a users identification.

This breach of trust is only another reason in a long list of why blockchains such as Pirate Chain are necessary. Utilizing a privacy-based cryptocurrency doesn’t mean you have anything to hide, it just means that you are unwilling to let a regulatory body control your digital wealth.

It can only be assumed that agencies such as the IRS will continue and step up their efforts to tax individuals on their crypto holdings. Whether you feel that this is unethical due to crypto’s decentralized and stateless nature, or if you think that the IRS needs to formulate a better understanding of digital assets clearly, it’s best to remain anonymous to safeguard your hard-earned digital wealth.

How to Safeguard Your Digital Wealth From the IRS

First, you will want to acquire Pirate Chain tokens (ARRR) on a digital exchange. The only exchange offering a pair with BTC or KMD is Digital Price and soon to be Crypto Bridge DEX. Once you’ve exchanged your BTC or KMD for ARRR, you may now download the Pirate Chain Wallet.

Alternatively, you can begin mining ARRR immediately using a GPU or ASIC miner. Block rewards are 256 ARRR with a new block occurring every 60 seconds.

Once you’ve acquired ARRR by buying or mining, you can now send it to your native Pirate Chain Wallet. Since Pirate is based off the Komodo platform, you’ll need to download from the Komodo website. Once you’ve downloaded the Agama or KomodoOceanQT wallet, you can run it in Pirate native mode.

Now you’re ready to transact entirely anonymous funds through Sapling addresses. This means that your digital wealth is secure because you are the only person that knows its destination address.

No longer will blockchain analysis groups have the ability to trace your digital movements. The IRS will also be unable to claim that you hold any kind of digital wealth because you have effectively made it disappear.

Up until the release of Pirate Chain, many users were trying to anonymize their cryptocurrencies through bitcoin mixers and peer-to-peer networks such as LocalBitcoins. These services have critical flaws that don’t adequately resolve the issue of total anonymity. The reasons being because of payments through debit/credit cards or because of pure inconvenience and a lack of trust.

Ultimately, the safest method to guard your digital wealth against the IRS is by making it disappear. Pirate Chain has shown that it can adequately do what other blockchain platforms have failed to do. By creating a strictly private-send only cryptocurrency, Pirate Chain has demonstrated that its primary focus is keeping its users anonymous.