Virtual currency like Bitcoin has shifted into the public eye in recent years.Some employees are paid with Bitcoin, more than a few retailers accept Bitcoin as payment, and others hold the e-currency as a capital asset.Recently, the Internal Revenue Service (IRS) clarified the tax treatment of Bitcoin and Bitcoin transactions.Convertible virtual currency is subject to tax by the IRS Bitcoin is the most widely circulated digital currency or e-currency as of 2016.It's called a convertible virtual currency because it has an equivalent value in real currency.The sale or exchange of a convertible virtual currency — including its use to pay for goods or services — has tax implications.The IRS answered some common questions about the tax treatment of Bitcoin transactions in its recent Notice 2014-21.Tax treatment depends on how Bitcoins are held and used.Bitcoin used to pay for goods and services taxed as income If you are an employer paying with Bitcoin, you must report employee earnings to the IRS on W-2 forms.

You must convert the Bitcoin value to U.S.dollars as of the date each payment is made and keep careful records.Wages paid in virtual currency are subject to withholding to the same extent as dollar wages.Employees must report their total W-2 wages in dollars, even if earned as Bitcoin.Self-employed individuals with Bitcoin gains or losses from sales transactions also must convert the virtual currency to dollars as of the day earned, and report the figures on their tax returns.bitcoin enjeuxBitcoins held as capital assets are taxed as property If you hold Bitcoins as a capital asset, you must treat them as property for tax purposes.elouera bitcoinGeneral tax principles applicable to property transactions apply.bitcoin still exists

If the Bitcoins are held as a capital asset, like stocks or bonds, any gain or loss from the sale or exchange of the asset is taxed as a capital gain or loss.Otherwise, the investor realizes ordinary gain or loss on an exchange.Bitcoin miners must report receipt of the virtual currency as income Some people "mine" Bitcoins by using computer resources to validate Bitcoin transactions and maintain the public Bitcoin transaction ledger.bitcoin fog forumAccording to the IRS, when a taxpayer successfully “mines” Bitcoins and has earnings from that activity whether in the form of Bitcoins or any other form, he or she must include it in his gross income after determining the fair market dollar value of the virtual currency as of the day he received it.bitcoin festplatte weggeworfenIf a bitcoin miner is self-employed, his or her gross earnings minus allowable tax deductions are also subject to the self-employment tax.bitcoin font

See also: target Contents 1 2 3 4 5 6 7 8 9 Difficulty is a measure of how difficult it is to find a hash below a given target.The Bitcoin network has a global block difficulty.Valid blocks must have a hash below this target.Mining pools also have a pool-specific share difficulty setting a lower limit for shares.difficulty = difficulty_1_target / current_target (target is a 256 bit number) difficulty_1_target can be different for various ways to measure difficulty.Traditionally, it represents a hash where the leading 32 bits are zero and the rest are one (this is known as "pool difficulty" or "pdiff").The Bitcoin protocol represents targets as a custom floating point type with limited precision; as a result, Bitcoin clients often approximate difficulty based on this (this is known as "bdiff").Each block stores a packed representation (called "Bits") for its actual hexadecimal target.The target can be derived from it via a predefined formula.

For example, if the packed target in the block is 0x1b0404cb, the hexadecimal target is Note that the 0x0404cb value is a signed value in this format.The largest legal value for this field is 0x7fffff.To make a larger value you must shift it down one full byte.Also 0x008000 is the smallest positive valid value.The highest possible target (difficulty 1) is defined as 0x1d00ffff, which gives us a hex target of It should be noted that pooled mining often uses non-truncated targets, which puts "pool difficulty 1" at So the difficulty at 0x1b0404cb is therefore: And: Here's a fast way to calculate bitcoin difficulty.It uses a modified Taylor series for the logarithm (you can see tutorials on flipcode and wikipedia) and relies on logs to transform the difficulty calculation: To see the math to go from the normal difficulty calculations (which require large big ints bigger than the space in any normal integer) to the calculation above, here's some python: Current difficulty, as output by Bitcoin's getDifficulty.

Graphs There is no minimum target.The maximum difficulty is roughly: maximum_target / 1 (since 0 would result in infinity), which is a ridiculously huge number (about 2^224).The actual maximum difficulty is when current_target=0, but we would not be able to calculate the difficulty if that happened.(fortunately it never will, so we're ok.)See discussion in target.The minimum difficulty, when the target is at the maximum allowed value, is 1.The difficulty is adjusted every 2016 blocks based on the time it took to find the previous 2016 blocks.At the desired rate of one block each 10 minutes, 2016 blocks would take exactly two weeks to find.If the previous 2016 blocks took more than two weeks to find, the difficulty is reduced.If they took less than two weeks, the difficulty is increased.The change in difficulty is in proportion to the amount of time over or under two weeks the previous 2016 blocks took to find.To find a block, the hash must be less than the target.The hash is effectively a random number between 0 and 2**256-1.

The offset for difficulty 1 is and for difficulty D is The expected number of hashes we need to calculate to find a block with difficulty D is therefore or just The difficulty is set such that the previous 2016 blocks would have been found at the rate of one every 10 minutes, so we were calculating (D * 2**48 / 0xffff) hashes in 600 seconds.That means the hash rate of the network was over the previous 2016 blocks.Can be further simplified to without much loss of accuracy.At difficulty 1, that is around 7 Mhashes per second.At the time of writing, the difficulty is 22012.4941572, which means that over the previous set of 2016 blocks found the average network hash rate was (The eternal question.)The average time to find a block can be approximated by calculating: where difficulty is the current difficulty, hashrate is the number of hashes your miner calculates per second, and time is the average in seconds between the blocks you find.For example, using Python we calculate the average time to generate a block using a 1Ghash/s mining rig when the difficulty is 20000: and find that it takes just under 24 hours on average.