The document summarizes recent developments regarding cryptocurrencies in 2014. It mentions that the IRS ruled that virtual currencies like Bitcoin should be treated as property for tax purposes. It also discusses China possibly outlawing cryptocurrency exchanges and the impact of the Heartbleed bug on Bitcoin exchanges and users. Global Bitcoin mining income is reported to have declined that year.

1. Crypto-currencies
What’s new?
2014

2. The Law
UPDATES

3. IRS
The IRS ruled on Bitcoins and other similar virtual currencies on March 25, 2014. Services to account for this
have already popped up:
• Coinreporting.com (which claims 11,238 new users over the last year)
• Bitcointaxes.info
Brian Klein
Partner, Baker Marquart
“[The] exchange
of… virtual
currency … to pay
for goods… has
tax liability”
“Every regulation is
also a business
opportunity. Tax
accounting for
Bitcoin is needed.
TurboTax for
Bitcoin”
Digital Currency Entrepreneurship & Startups
Bitcoin is Legally Recognized
* Brazil followed suite, but has exemptions for those transacting less than $16k per year http://www.coindesk.com/brazil-tax-bitcoin-investors-everyday-users/
* IRS guidelines: http://i.cdn.turner.com/money/2014/images/03/25/IRS_Notice_2014_21.pdf?iid=EL

4. Digital Currency Entrepreneurship & Startups
Rumors swirl that China’s
orders shut down of
exchanges’ bank accounts
1
BTC Trade and Huobi
confirm rumor while BTC
China denies it
2
BTC China opens Bitcoin
ATMs in China3
CHINA OUTLAWING IT?
http://blogs.wsj.com/moneybeat/2014/04/14/bitbeat-bitcoins-status-in-china-not-so-black-and-white/
http://www.cnbc.com/id/101583758
http://www.reuters.com/article/2014/04/16/us-china-bitcoin-idUSBREA3F0MK20140416

5. Prices
UPDATES

6. Digital Currency Entrepreneurship & Startups
A ROUGH MONTH
!
!
Auroracoin, a Litecoin
derivative, introduced at $100,
launched via “Air drop” on
March 25 for ~$11 ($300 for
each citizen) and now sits
at ~$1
Bitcoin Litecoin
Auroracoin Ripple

7. Digital Currency Entrepreneurship & Startups
CoinTerra
Mines about $230,000 to $260,000 worth
of Bitcoins a dayCloud Hashing
250 customers switched to alternative-
currency mining machines
KnCMiner
Saw new sales shrink by 30 percent in
the past three weeks
LOSING MONEY MINING
2013: $25.2M/week
2014: $14.9M/week
Global Miner Income
Global Income
Global income has fallen from $25.2M a
week to $14.9M in one quarter
• Less lucrative http://www.sfgate.com/technology/article/Bitcoin-mining-leaves-some-speculators-in-a-hole-5398031.php
• http://www.pymnts.com/news/2014/bitcoin-mining-train-losing-steam-as-some-face-cash-losses

8. Security
UPDATES

9. Digital Currency Entrepreneurship & Startups
Exchanges were taken offline and the
official Windows client was deemed
vulnerable. Unlucky individuals saw
their wallet keys stolen by hackers.
HEARTBLEED HACKING
Disruptions
• Exchanges go offline http://techcrunch.com/2014/04/09/what-bitcoin-users-need-to-know-about-heartbleed/
• http://motoringcrunch.com/news/bitcoin-owners-devastated-over-heartbleed-infiltration/10012555/

10. Thanks, Lab Zero
(our host)
Michi Kono
Visit our host at http://labzero.com
Visit the Meetup page at http://meetup.com/digital-currency/
Contact the author at michi.kono@coinposit.com