Ur doing the lord’s work

Happy Fourth! #meatstr

Happy Fourth! #meatstr

Key migration is still an unsolved problem, it's perfectly reasonable to use npubs for paid services imo and the root problem should be addressed

Only 3 dedicated souls at the gym this morning, dreaming of what can be.

I wouldn’t be concerned thought. If anything, they would send you a 1099 showing cost and proceeds being essentially the same. This is what Strike does if you send another Strike user sats directly.

I did a test transaction last year and they actually reported a .02 proceeds with .03 cost. So they reported I had a .01 loss on the transaction.

The service side of my business is that way, so I can relate. To add a layer of complexity, I deal with about 20% international customers who I think I can make a great case to for using bitcoin. They struggle with time zones, bank hours, exchange rates, fraud alerts, etc.

I’m going to have new problems once I start to convince a few of them to pay in bitcoin instead of fiat. This is closer than most people think too. At our last meetup, someone demoed using Strike payment rails to spend fiat out of their bank account to seamlessly send bitcoin to me with a zero balance in their actual strike account. No taxable event there. Strike does this in something like 30 countries already. It’s fully KYC’d but it solves a real problem

I think that could work, but I’m definitely no CPA lol.

I might have to message you in the future to see how your process is going. I setup BTCpayserver but haven’t yet pulled the trigger. Our payment flow is different, we don’t really do retail. Most of what we do is high-dollar and estimates could take days, weeks, even years by the time we consult/quote/invoice since we’re in the construction

POS. I actually do capture the BTC payments at the register as Bitcoin but when that data gets pushed to the bookkeeping backend I deposit it to “Cash on Hand”. I’m using Lightspeed POS and I need to build a middleware to automate the payment workflow between Lightspeed and BTCpay. But I’m not really a developer so I’ve been avoiding that and just added a payment method called bitcoin in the POS, create the sale, and then jump to a browser where the BTCpay server page is and enter the amount. Once it goes through I jump back to Lightspeed and hit bitcoin as the payment method and it prints the receipt. It’s more or less the same as accepting a check, which I also have as a payment method in Lightspeed.

Strike has the ability to do exactly this. Basically you’d have fiat funds in your wallet and pay lightning invoices with it. I’ve never done it that way though. Jack Mallers talks about it in some videos to combat this exact problem.

I’m so grateful for this thread, thanks to you both for taking the time to articulate these ideas.

I’m in agreement with whichever one of you suggested that BTC payments would be slow to start. I am currently running a BTCpay server and a lightning node. I am just marking BTC payments as cash, effectively buying KYC free sats. I think? I have not had an accountant review any of this. BTC payments so far are a minuscule portion of the business so I’m willing to face the music for any mistakes I make now.

I have an account called “Cash on Hand” and I deposit all cash to that account. If I don’t wind up moving it to a real bank account before the end of the year then the real cash is never actually there anymore, because I spent it, so I settle that balance to another account called Owner’s Pay.

I should also mention that I have two businesses operating under the same umbrella, one is service and the other is retail sales. The service business retails parts that are installed, and is probably about 65:35 service:COGS. The retail outfit is new and is where I’m experimenting with the BTCpay server.

Bigger picture, I’m trying to figure out how to sweep profits into BTC and what kind of ratio of operating capital to keep in fiat to avoid those taxable events of selling or spending the BTC until laws become more sensible. I have levered some BTC a couple of times for operating capital when needed to avoid the taxable events.

I think the real challenge is to get people to spend it. I can see Lightning payments replacing cc’s.

From the stand point of just buying vs selling a good or service, i would argue that it’s marginally cheaper than buying since you’re getting the gross profit as a markup. For instance, I’m swapping a $50 (cost) lamp that is sold for $100 in Bitcoin. Yes there’s a tax cost to account for but it should still be better if you can get people to spend their Bitcoin.

Good conversations, maybe someone reads and gets inspired. 🤝

No I understand what you’re saying. I guess I’m approaching it from the idea that it’s more than likely a novelty in the beginning, you won’t have a lot of sales, and the inventory costs would be covered by the gross profit of the other items. This would allow the store owner the ability to “bank” the sats for future use therefore converting cash to the “harder” asset of sats.

It certainly easier for a service business to get to a bitcoin standard since most service business revenue is “self generated “ and therefore has very little cost.

But the idea still stands, the collection of bitcoin for a good or service would generate ordinary income , creates a basis for a future sale, and the future sale would generate a capital gains tax or benefit based on the holding period.

Every technology ever invented. Every war ever won. Every disease ever cured. Every bridge ever built. Every battle ever fought. Every step up the ladder of science was all in the hope that a beautiful woman would look at the man who accomplished the feat in this way. Precisely at the moment he entered her.

You may not like it, but accept it.

If I was to implement Bitcoin into a business I would do the following:

Create an account (similar to the checking account) in my accounting software so when I sold an item for bitcoin, I’d record the selling price and corresponding revenue. When entering the sale, I’d notate #sats received (date will be automatically done as long as recording entries real time or daily). This will :

1- recognize the revenue of selling the item

2-give you the cost basis of the sats and the date you received them.

Then when you need to convert to fiat, you’d reduce the bitcoin account based on the #sats sold, recognize a gain or loss on the conversion, and receive the cash into you’re bank account.

In this scenario, all income has been reported and you have cost basis documented. If you could find vendors that take Bitcoin, you could buy inventory with the Bitcoin and achieve the full circular economy that we hope to one day see. In that scenario, you’d recognize the cost of the inventory or other expense item and would have a gain or loss on that conversion as well.

If you’re not running a computerized accounting software package, this can be done with a pen and paper. My guess is no one would accept Bitcoin if they didn’t run their company books on a computer system of some sort.

If I was doing lots of small transactions, you might do a bulk entry (total sats and total fiat sold

Value) at the end of the day vs entering each item. In that scenario I’d be looking to implement a BTCPayserver instance to use in collecting activity. (For instance a coffee shop or snowcone stand)

My thoughts would be all bitcoin transactions will be slow for anyone in the beginning and scale up as interest increased.

Is this anything close to what you’re asking? If not, and me specific questions and I’ll answer. I’ve given this a lot of thought but it’s the first time I’ve put it down for others to read.

#bitcoinbusiness