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Status as of Friday, May 4, 2018

Posted: Fri May 04, 2018 7:36 pm
by Steve Sokolowski
Good evening!
  • This evening, since profits have increased due to the fixes with static coin miners and stale shares, we decided to become less conservative with coin sell prices. That will cause profits to increase by about 1%.
  • Yesterday, Vance completed a program to check all exchanges for coins that have forked, so that Chris can investigate them. We determined that there were about 20 coins that had forked, so Chris upgraded or discontinued all those coins over the past two days. The elimination of the forks seems to have increased profits as well, but both of these improvements won't see a significant difference until they have been in effect for a day or two.
  • Constance is going to complete destination tags for Ripple, NXT, Monero, and other coins that support them this weekend, so we'll be issuing a new website release on Sunday.

Re: Status as of Friday, May 4, 2018

Posted: Fri May 04, 2018 11:28 pm
by CSZiggy
I'm curious, when you sell the coins, since they aren't over a year old if we just mined them, how does the capital gains tax get handled?

If the pool doesn't find that many LTC or BTC blocks and thats the payment form most customers seem to go with, when you sell the verge coins that were found to buy the other coins, is the 33% US capital gains tax coming off the sale of the coins or ?

I'm guessing the pool does a bit over $600 a year in business, so when you pay out $100,000 in a day to the miners, is half of that from bought-sold coins in order to make payments? Is the percent you charge us enough to cover the $15,000 a day the pool would have to pay to sell $50,000 in coins to convert to forms of payments requested by the miners?

I keep running the numbers and it seems I should be making more here than I ever do. I guess I just have one of them low-luck type miners that doesn't get credit for the full hash or something on this pool compared to other pools.

Re: Status as of Friday, May 4, 2018

Posted: Sat May 05, 2018 8:04 am
by Steve Sokolowski
CSZiggy wrote:I'm curious, when you sell the coins, since they aren't over a year old if we just mined them, how does the capital gains tax get handled?

If the pool doesn't find that many LTC or BTC blocks and thats the payment form most customers seem to go with, when you sell the verge coins that were found to buy the other coins, is the 33% US capital gains tax coming off the sale of the coins or ?

I'm guessing the pool does a bit over $600 a year in business, so when you pay out $100,000 in a day to the miners, is half of that from bought-sold coins in order to make payments? Is the percent you charge us enough to cover the $15,000 a day the pool would have to pay to sell $50,000 in coins to convert to forms of payments requested by the miners?

I keep running the numbers and it seems I should be making more here than I ever do. I guess I just have one of them low-luck type miners that doesn't get credit for the full hash or something on this pool compared to other pools.
Because coins are sold immediately upon mining, there is no capital gains tax on them. Capital gains taxes are only relevant when the value of the asset has changed between the time of acquisition and sale.

As a mining pool, we rent hashrate from customers, use that hashrate to mine coins, do things internally to satisfy our debts. The documentation explains this fully, but the target is to pay out 95% of earnings to customers. Since there is no conversion necessary, solo miners earn exactly 97%.

Low luck miners never have their earnings reduced. When they are identified, their balances are forfeited in full. Since your balances weren't forfeit, low luck mining had nothing to do with you.

What was changed yesterday was our targeting of payouts. Previously, static coin miners earned too much because they were paid improperly for known stale shares, lowering the remaining amount of money that was available for dynamic coin miners. Now that we fixed that, static coin miners make a lot less, but dynamic coin miners only made a trivial amount less. We increased earnings across the board by about 1% because the money that was previously paid to static coin miners for performing no useful work was now available, and should be paid to customers who are mining normally.

Re: Status as of Friday, May 4, 2018

Posted: Sat May 05, 2018 2:29 pm
by Steve Sokolowski
CSZiggy wrote:I'm curious, when you sell the coins, since they aren't over a year old if we just mined them, how does the capital gains tax get handled?

If the pool doesn't find that many LTC or BTC blocks and thats the payment form most customers seem to go with, when you sell the verge coins that were found to buy the other coins, is the 33% US capital gains tax coming off the sale of the coins or ?

I'm guessing the pool does a bit over $600 a year in business, so when you pay out $100,000 in a day to the miners, is half of that from bought-sold coins in order to make payments? Is the percent you charge us enough to cover the $15,000 a day the pool would have to pay to sell $50,000 in coins to convert to forms of payments requested by the miners?

I keep running the numbers and it seems I should be making more here than I ever do. I guess I just have one of them low-luck type miners that doesn't get credit for the full hash or something on this pool compared to other pools.
I wanted to make another reply to state that we adjusted the target upwards another 1%, so earnings in two days are now expected to average 2% more than they would have before.

Re: Status as of Friday, May 4, 2018

Posted: Sat May 05, 2018 3:44 pm
by CSZiggy
Steve Sokolowski wrote: Because coins are sold immediately upon mining, there is no capital gains tax on them. Capital gains taxes are only relevant when the value of the asset has changed between the time of acquisition and sale.
I thought that meant if you bought a coin for $100 and you sold a coin for $100 that there was no capitals gains tax.
But if you created the coin for $0 out of thin air and then sold it for $100, that you owed capital gains tax on that $100
I thought you had to list how much you paid to acquire the initial capital investment, I didn't realize you were able to list that you paid $100 for the acquisition of the coin in order to sell it at the same price.


Without a receipt of the purchase, I thought the purchase price of the coin was 0, you sell it for what you sell it for, and pay capital gains tax on that.
If you had mined it earlier you would pay income tax at the time it was made, and when you sell it, you list the price you paid taxes on as the acquisition price. But if you aren't paying income tax on the coins generated then the acquisition price of the coin should be 0, so selling it at any value should be a capital gains event. Or does the pool pay income taxes on the coins at the time mined and lists that as the acquisition price?


So, if I mine at a site that doesn't have a forced payout value, I can let my coins sit in there for a year and then request a payout and as long as I sell them right after they hit my account I wouldn't have to pay any capital gains taxes? But if I take payments as I earn them, then I have to pay either income tax now or change in price capital gains taxes later. Interesting.

Re: Status as of Friday, May 4, 2018

Posted: Sat May 05, 2018 8:33 pm
by Steve Sokolowski
CSZiggy wrote:
Steve Sokolowski wrote: Because coins are sold immediately upon mining, there is no capital gains tax on them. Capital gains taxes are only relevant when the value of the asset has changed between the time of acquisition and sale.
I thought that meant if you bought a coin for $100 and you sold a coin for $100 that there was no capitals gains tax.
But if you created the coin for $0 out of thin air and then sold it for $100, that you owed capital gains tax on that $100
I thought you had to list how much you paid to acquire the initial capital investment, I didn't realize you were able to list that you paid $100 for the acquisition of the coin in order to sell it at the same price.


Without a receipt of the purchase, I thought the purchase price of the coin was 0, you sell it for what you sell it for, and pay capital gains tax on that.
If you had mined it earlier you would pay income tax at the time it was made, and when you sell it, you list the price you paid taxes on as the acquisition price. But if you aren't paying income tax on the coins generated then the acquisition price of the coin should be 0, so selling it at any value should be a capital gains event. Or does the pool pay income taxes on the coins at the time mined and lists that as the acquisition price?


So, if I mine at a site that doesn't have a forced payout value, I can let my coins sit in there for a year and then request a payout and as long as I sell them right after they hit my account I wouldn't have to pay any capital gains taxes? But if I take payments as I earn them, then I have to pay either income tax now or change in price capital gains taxes later. Interesting.
Unfortunately, I'm not able to give you advice on what you should do at other sites. You'll have to talk to an attorney about how you should pay taxes on gains elsewhere.

As to our own taxes, I think I described it well above. We pay taxes on the difference between what we mined and what we paid for the miners we are renting from customers.

Re: Status as of Friday, May 4, 2018

Posted: Sat May 05, 2018 11:20 pm
by Aura89
CSZiggy wrote: I thought that meant if you bought a coin for $100 and you sold a coin for $100 that there was no capitals gains tax.
But if you created the coin for $0 out of thin air and then sold it for $100, that you owed capital gains tax on that $100
You do not get capital gain/loss on coins you mine, you get income tax. You only get gain/loss from coins you buy, and keep.

Re: Status as of Friday, May 4, 2018

Posted: Sat May 05, 2018 11:57 pm
by CSZiggy
Aura89 wrote:You do not get capital gain/loss on coins you mine, you get income tax. You only get gain/loss from coins you buy, and keep.
I agree, you get income tax on the coins at the time you mine them. But then you have a tax at the time of the sell of them also, so I disagree with your second statement.

I'm pretty sure when you do the sell of them it triggers the capital gains, from the price you paid when you mined them and were taxed at, subtracted from the we hope higher price, and that new gain(from original income taxed price to the new sell price) is what you now also owe capital gains taxes on.

So you mine a LTC today, you owe taxes on $180, you wait until November and sell it for $1180, then you made $1000 and now owe capital gains tax on that $1000. If you hold the coin for less than a year before you sell, then it costs double in tax costs.

Depending on what country you are in your income taxes and laws may differ.
If you think just because you mined the coins you only have to pay income tax for the price you made them at and can later sell them down the road and keep all of the profits, I think you need to check again and make sure you are holding enough back to pay for the taxes on those capital gains.

Its not just from coins you bought and kept, its from coins you also mined and sold.
My concern was If I was getting less profits because we are somehow paying the taxes on the coins that are sold.
The admins have said that wasn't the case, good enough for me.

Re: Status as of Friday, May 4, 2018

Posted: Fri Sep 07, 2018 4:08 pm
by DAUD1000
Hi people,

I am New to mining and i have managed to mine a few coins such to the value of $0.12, but these are now forfeited, so i cannot continue to mine these, why has this happened ? I am mining Using ANTMINER S7, if i am doing anything illegal please inform me , i seem to have no issues using Slushpool.

:evil:

Re: Status as of Friday, May 4, 2018

Posted: Sat Sep 08, 2018 8:30 am
by Steve Sokolowski
DAUD1000 wrote:Hi people,

I am New to mining and i have managed to mine a few coins such to the value of $0.12, but these are now forfeited, so i cannot continue to mine these, why has this happened ? I am mining Using ANTMINER S7, if i am doing anything illegal please inform me , i seem to have no issues using Slushpool.

:evil:
Could you submit a support ticket about the issue? The problem might be that you were identified as having a low-luck miner. Chris can help resolve the issue or reverse the forfeiture in a support ticket.