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Imagine this. You have just bought the house of your dreams. Before the sales agent hands over the keys he tells you he has two pieces of very important advice.

First of all, he warns you that although you can make as many copies of the keys as you like, if ever all the keys are lost, you will never be able to enter the house again ever. In fact, no one will ever be able to enter the house. It will be empty for eternity.

You have lost your house.

Just as you are pondering which members of your friends and family you should leave spare keys with, he relates his second piece of advice.

If any copy of your keys are stolen or fall into the hands of an unscrupulous person, they can obviously gain access to your house. But worse than that, they would be able to change all the locks and prevent you from ever entering your house again ever.

Furthermore, you will have no recourse. The scoundrel will be able to sleep in your bed and drink champagne in your jacuzzi, and there is absolutely nothing you can do about it.

You have lost your house.

This may seem far-fetched and ridiculous but it is exactly the situation regarding cryptocurrency and private keys. Here we have the twin issues of the neurotic fear of losing your private keys contrasted with the paranoia of someone gaining access to them through malicious intent.

If you are naturally forgetful and neurotic about losing your keys, you may distribute them among various, supposedly trustworthy people and store them in various secret places. Unfortunately, this just makes it easier for someone to find them or use them for their own benefit. So one day, as you are idly daydreaming about which model of Range Rover you will buy with your enormous crypto profits, you discover that your uncle Bill has run off to Puerto Rico with the maid, accompanied by all your crypto. Your aunt Grace is distraught but she will get over it: she has already sold his golf clubs. But for you, your dreams are over, and its a few more years in the battered old Ford.

Or, you have a paranoid bent. You bury your hardware wallet in the garden and hide a copy of the seed phrase in the roof lining of your car. Then the day comes when the dog digs up the wallet and chews it into a hundred pieces and your car is stolen and the thief drives it into the river.

Luckily, you remember you gave another copy of the seed phrase to your sister, so you frantically call her to discover she had hidden the note in the sugar bowl. Unfortunately, she had forgotten about it and the paper had not survived the full dishwasher cycle at 50C. You should have laminated the note but you didnt, did you? Your sister is very apologetic, but for you, your dreams are over.

Its a few more years in the battered old Ford.

The main crypto exchanges are holding a huge amount of customers cryptocurrency in their custodial wallets. Why is this, I wonder, when all the advice is to get any assets off exchanges as soon as possible after any transacting and secure them with non-custodial wallets.

Could it be that many of us dont want to be our own bank? We dont want the responsibility and are averse to suffering the neurosis and paranoia of securing our private keys. We are happier to trust Coinbase, Kraken etc. with our crypto assets as we have previously trusted our banks.

It is true how many of us in the West have lost money that was held in major banks? Not many. And exchanges are just like banks, arent they?

However, the history of crypto exchanges is not so rosy as we mistakenly imagine our banks history to be. The Altsbit exchange was hacked only a few days ago and although the losses suffered were far smaller than the fortune spirited away in the Mt. Gox scandal, it simply shows that exchanges are low-lying fruit for hackers and remain vulnerable.

In order to encourage mass adoption of cryptocurrencies, a solution must be found which is user-friendly and provides secure management of private keys without trusting third parties. In this modern age, if the best we have is to etch seed phrases onto hardened steel plates and hide them in the basement, we have a long way to go.

Featured Image: Shutterstock/TheVisualsYouNeed

Read more:
Bitcoin (BTC) and Crypto Paranoia: The Neurosis of Private Key Safekeeping And Why We Need a New Paradigm - The Daily Hodl

Four firms are controlling the Bitcoin mining rigs production industry. The biggest gainer? Obviously Bitmain, but who else is in charge of the chip production?

TokenInsight has prepared a report saying that by the end of 2020, these four firms will take complete control over the Bitcoin mining market. Those are the Bitmain, Ebang, Canaan, and MicroBT. During 2020, the companies will eat out 3 percent more from the mining markets cake. Now, they cumulatively control more than 95% of the network. By the end of 2020, 98% of the market will lie under the firms.

What will the miners do in such circumstances? They typically worry about centralization in the production of area-specific equipment (and code).

According to Johnson Xu, TokenInsight analyst, we can blame the network effect:

The top four companies consistently have had strong market power in the past; going into the future, this strong market power will translate into the dominant positions of the top four companies.

Considering that they already have 95% under control, the total power seizure is probably only a matter of time. Johnson Xu sees no possibility that some other companies will enter the field to compete. Cryptocurrencies have many underwater rocks and bugs that can jump out of the blue. Indeed, you can lose all the money or business thanks to a single weak line of code.

TokenInsight predicts that Bitmain will control 63% of the market, while now they have 55-58%. Canaans share will increase to 18%, while now they control 10-15%. Bitmain receives such high marks because they have recently withdrawn from the AI development. Xu notes that Bitmain considers AI as a high cost and low profitability venture. Once they finish restructuring business and assets, the market share will grow bigger because they have established names.

Also, Xu thinks Canaans market share is about to increase thanks to the IPO that the firm held back in 2019. As for MicroBT, they now have 20-25% of the market, but TokenInsight predicts that theyll lose positions down to having only around 10%. The issue is in the recent arrest of the companys founder. As for Ebang, they will keep control over the current 7% that they have.

When you try to sell mining rigs, you have to find special clients worldwide, convince them that youre not a scammer, and establish relationships with them. It is a very hard task and people will have to put a ton of time into logistics and marketing and a support department to power up sales. Bitmain already has all that, including the strong leader who can aim the companys ship in different directions, not only follow the iceberg-magnetic market trends.

Back in the old days, there were only Bitmain (and probably Bitfury) on the market. They were offering chips that exist. Since then, many of the firms took some of the Bitmains mining market share. However, Bitmain developed into the leading company in the industry, providing the best solutions for the best prices to people.

There are thousands of miners worldwide who wait, prey on and order equipment from China every time the company makes sell off party. However, the coronavirus effect may play bad jokes with Bitmain this year, as some of the key parts of the country locked down on quarantine.

Jeff Fawkes is a seasoned investment professional and a crypto analyst covering the blockchain space. He has a dual degree in Business Administration and Creative Writing and is passionate when it comes to how technology impacts our society.

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Bitmain, Ebang, Canaan, and MicroBT to Cement Control over Bitcoin Mining Market in... - Coinspeaker

For crypto owners looking to estimate how much they owe in taxes, there are some platforms with a free crypto tax calculator. They integrate with major crypto exchanges and wallets, allowing you to import your crypto transaction data and start calculating your taxes for free. Some of them also integrate with leading tax filing software such as Turbotax.

Also read: Bitcoin, Tesla Stock, Tron: How Warren Buffett Got His First Bitcoin

As cryptocurrencies become more popular and their adoption rises, governments worldwide are ramping up their efforts to tax them. In the U.S., the Internal Revenue Service (IRS) has named cryptocurrency a top priority this year. Not only has the agency sent out over 10,000 letters to remind crypto owners they must pay taxes, but its main tax form used by over 150 million U.S. filers now includes a cryptocurrency question.

For crypto owners who want to calculate how much they owe in taxes, there are many tax preparation platforms with a crypto tax calculator to help them minimize their tax liabilities and claim all the deductions possible. Most online crypto tax calculators require you to import your transaction data from exchanges or wallets in order to calculate your tax obligations. They will also generate various reports to help you with tax reporting and filing. Some have even partnered with leading tax filing services such as Turbotax. Below are some popular platforms with a cryptocurrency tax calculator. For more options, see our post on 10 useful tax tools for crypto owners.

Crypto Trader Tax by Coin Ledger is a tax reporting platform with a built-in crypto tax calculator. It integrates with all major crypto exchanges, including Coinbase, Coinbase Pro, Bittrex, Bitstamp, Gemini, Poloniex, Binance, Kucoin, Kraken, Bitfinex, Huobi, Hitbtc, and Cash App. You can also import data from unsupported exchanges manually. Once you have imported your data, Crypto Trader Tax will calculate your tax obligations and generate tax reports.

The platforms crypto tax calculator is free to use. You only have to pay when you want to view and download your full report, its website details. The reports generated include an audit trail report, the IRS Form 8949, a short and long term gains report, and a crypto income report. The platform also offers international support. Your capital gains and losses can be calculated in every fiat currency and your tax reports used in any country that supports FIFO, LIFO, or specific identification methods.

Four pricing levels are available on Crypto Tax Trader: $49, $99, $199, and $299. The cheapest plan allows you to import up to 100 trades. All levels have Turbotax and Taxact integration to help you file your tax returns.

Koinly is also a popular platform with a crypto tax calculator, available in over 20 countries. Similar Crypto Trader Tax, to use Koinlys tax calculator, you need to import your data from crypto exchanges, wallets or public addresses. You can then review your transactions and generate your tax reports, which include capital gains, income and gifts, margin trades, options and futures trades, and audit logs. You can then export your transactions to tax filing platforms such as Turbotax, Taxact, and Xero.

It is also free to start using Koinlys crypto tax calculator. Start for free, pay only when you are ready to generate your reports, its website states. To generate tax reports for filing, Koinly offers three plans costing $79, $179, and $399. The cheapest level allows 300 transactions.

Cointracker has been advertising its free crypto tax calculator since January. Cryptocurrency users with up to 200 transactions in a given tax year can use Cointracker to calculate cryptocurrency taxes free of charge, the company wrote. This enables the majority of cryptocurrency users to seamlessly become and stay tax compliant as they transact and use cryptocurrency, all at zero cost.

The free level comes with portfolio tracking, capital gains tax calculation, and error reconciliation. The platform also offers a more heavy-duty plan which costs $179, allows up to 3,000 transactions, and comes with several more options. There is also an unlimited level for which you need to contact the company for a quote.

Zenledger describes itself as much more than just a free crypto tax calculator. It claims to be The most comprehensive cryptocurrency tax software on the market. The service aggregates your many ledgers, marks the transactions to market, and allows you to categorize each transaction by use. It also integrates with major crypto exchanges and has partnered with Turbotax. Reports it generates include completed tax forms and audit reports.

Besides a free tax estimate, Zenledger offers a variety of pricing options, starting at $69, $149, and $399. The lowest level allows up to 1000 transactions and $15,000 in total asset value. Product consulting and customization service is available as an add-on at $100 per hour.

Tokentax is another cryptocurrency tax software and accounting platform with a built-in crypto tax calculator. Similar to other platforms featured above, Tokentax integrates with major crypto exchanges and allows you to manually import your trade history from other exchanges. Once your transaction data has been imported, the platform will calculate your tax obligation and generate your tax reports, including the IRS Form 8949, an audit trail report, a crypto mining and income tax report, and an international gain and loss report. Tokentax has also partnered with Turbotax.

In order to use Tokentaxs crypto tax calculator, however, you will need to pay for one of the three plans which cost $65, $199, and $799. The basic plan only allows up to 500 transactions from Coinbase, Coinbase Pro and Binance. Level 2 supports every exchange and allows you to import up to 5,000 transactions. All three levels have Turbotax integration.

The list above is not exhaustive as there are many more companies with a crypto tax calculator. News.bitcoin.com has previously provided a list of 10 useful tax tools to help crypto owners with tax filing. Regardless of which tax software you use, the IRS has recently provided some tips which cryptocurrency owners should know before filing their tax returns.

Do you have a favorite crypto tax calculator? Share your thoughts with us in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Images courtesy of Shutterstock.

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A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

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Bitcoin Taxation Support Growing Industry Here are 5 Useful Cryptocurrency Tax Calculators - Bitcoin News