Comment by haggenballs | Hacker News Reader

Comment by haggenballs | Hacker News Reader

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I had the same problems with re-balancing my own portfolio and ended up creating a trading bot that automatically diversifies my investment portfolio across the top 20 coins by market cap (10% capped). It is heavily inspired by the crypto20 whitepaper.

For anyone that is interested, you can find the project here: www.hodlbot.io

I'm about 1-2 weeks from the MVP launch. Only the top 20 coins by market cap fund will be available at the start. In the future users will be able to create their own custom weightings.

The bot requires users to have a Binance account and uses their API key (trade only, no withdrawal access), to execute monthly rebalances. Users will always own their own coins.

At this point, I haven't run into any huge issues with min trading amounts given a reasonable initial investment amount (~0.5 ETH). For example, the NEO example you mentioned.... the min trading amount on Binnace is actually 0.01 NEO (~$1.1 USD).

I'll be making the project open source in the future and sharing with you all!

This is a really clever idea, but as someone who's trying to stay as legal as I can with reporting my crypto transactions for taxes, this sounds like it could potentially be a nightmare to report (or possibly to pay taxes on), especially with the recent GOP addition to the tax reform law that made every cryptocurrency transaction, even a trade from currency to currency, a taxable event.

I really wish I could just freely use this as a tool for investment, but the laws seem pretty draconian right now, and not reflective of the open and experimental nature of this space.

Once you get this up and going, consider some reporting tools to help keep track of the transactions, so people can use it for both personal and legal purposes.

I've found that IRS requirement is really difficult to comply with. Does anyone have any tips for tracking trades?

I own no cryptocurrencies, and I have no idea why it is any more challenging to track than trading stocks, you buy at one price and sell at another.

What am I missing?

One big factor: traditional brokerage/investment accounts provide records of all stock transactions, including the cost basis and precise gain or loss. This typically comes via the 1099-B. It's straightforward to report and file taxes in this manner (relatively speaking).

Even the more legitimate exchanges in the US (ex: Coinbase) aren't currently providing these types of records. You may be able to export a list of trades, but often cost basis is missing. Or if, for example, you've moved coins through various exchanges, or traded one coin for another coin (say BTC to ETH), before converting back to fiat currency, it's very difficult to figure out how to report everything. There's no 1099-B.

Trading is taxed just like capital gains, and mining as income. For small investments with few trades, it's straightforward and you can likely use a free service. Beyond a certain threshold (like 200 trades), it's probably worth using something like https://bitcoin.tax/ or https://cointracking.info/ which will create your forms for you after you import (and painstakingly correct) trades, at a rather steep price ($120/mo) though cointracking has a lifetime buy for $380...

Is mining income taxed before conversion to USD? What price would you be expected to use?

We keep a log of transaction records. We can easily add a feature for users to export this as a CSV. Better yet in the future, I'd love to work with a user who is knowledgeable about this process to build a reporting feature.

Sounds great. Given that in stock market investing you are better off on average with passively managed tracker funds, there does seem to be a big gap in the market for a crypto asset equivalent. Having a crypto equivalent of an ETF as single tokens representing e.g. CMC100 would bring a whole host of challenges, e.g. regulatory, security, ease of manipulation (it is relatively easy for whales to temporarily get coins into the CMC100), etc. In the spirit of crypto, a solution you run yourself, and where you manage the keys to all the coins yourself, should go some way to addressing those concerns. Maybe in the longer term this sort of thing will be a smart contract you run yourself on a decentralised exchange to make it more easier.

is this list of crypto Index Funds complete? https://en.bitcoinwiki.org/wiki/Index_Fund

DigiCor.io is also a well established crypto index Fund

DigiCor Asset Managment is also a well-established crypto index fund.

> The bot requires users to have a Binance account ... (trade only, no withdrawal access)

> Users will always own their own coins.

To be fair, users do not actually own the coins if Binance owns the coins.

Sounds like a cool bot though, and great looking site! I signed up for the private beta. Looking forward to the open source!

Blocknet is an awesome open source project you may want to look into. It's an interoperability protocol and one example use-case project they built on it is a trustless decentralized exchange that allows you to trade directly from your wallet.

That's awesome. I definitely want to move to decentralized exchanges ASAP to minimize the trust required for these kinds of transactions.

Does that mean you also have to pay transaction fees for every trade, and wait for confirmations, etc.?

Correct, whether it's worth it or not depends on how much you care about security and decentralization. It works well for OTC trades, dark pools, escrow, no-limit withdrawals(because you're trading from your own wallet), and anyone who doesn't want to create an account and have their trades tracked.

What are the tax implications of owning your own coins when trading, compared to someone else owning the coins but giving you rights to it?

Identical

How are you planning to deal with the tax implications which arises due to buying and selling of coins?

There is a certain benefit of using coinbase's (or any) crypto fund where you don't actually have to own the coins, and that is not having to deal with the tax nightmare situation that creates.

taxes? lol...it's crypto so YOLO

Sounds awesome. Can't wait for weeks, have signed up.

One request: Could you lower the monthly fee for people like me who are from India like in the range of $1 to $5 per month. $15 is a large figure for Indian common citizens.

Would be great to see Purchasing Power Parity [0] more often in web applications which offer services and product for people around the world :)

- [0] https://github.com/rwieruch/purchasing-power-parity

I am genuinely interested: How do you feel about Saas pricing in general coming from India? Also how do Indian Saas products differ from e.g. US ones? Is it only the pricing point?

The concept is quite interesting and I like what I see so far! Signed up and attempted to share with friends. The referral link does not seem to work.

The referral link doesn't seem to work for me either. Maybe you want to add the referral link in the confirmation email as well? I lost my referral link after closing the tab on signup, forcing me to signup again :o

Looking forward to it! If only I wasn't 15k in line :D

I fixed it! Yes I will add it in the e-mail. Thanks for the heads up :)

I think it's a great idea and signed up for the beta. Just curious though - given the Binance hack today that seemed to only affect people who had given out their trade API keys, how will you ensure that people trust your bot?

This sounds like a pretty interesting application of crypto20, when are you planning to go live & do you have any early access?

Looks cool, can't wait for the early access!

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