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Tuesday, October 4, 2022

Buying and selling items secondhand for cryptocurrency

[Carlos M. asks] “Would you use crypto for garage sales, used-good sales or flee-markets? Do mobile wallets generate a new address automatically? If it’s too anonymous how can I prove later that I did pay for a specific payment?” [Andreas answers] How do you prove when you pay with cash? You don’t.

In most countries, the way the system works is that you make a truthful declaration and unless you’re audited there’s no reason to doubt that truthful declaration. And you are not required in the US at least, to collect identity information at a garage sale from everyone who gives you money.

You are required to pay taxes on it. You are required, if you’re using crypto, to calculate the capital gains and losses, but you’re not required to do KYC on the person who bought your 25-year-old tricycle at a garage sale for $3. So, how do you do it? Yes, you use a mobile wallet.

Yes, 99% of the smartphone mobile wallets essentially generate a new address for every payment. You can generate an address and then you can generate another one for the next customer while you’re waiting to receive notification that the payment from the previous customer has come through.

It’s a bit tricky with bitcoin, It’s easier with Lightning, but then again, who are you going to find out who’s going to be able to pay you right away with a Lightning wallet? Not likely, unless you’re in a hotspot of the crypto activity or at a crypto meetup.

But yes, I have sold [my car for bitcoin]. You’ve probably heard this story many times before. I sold my car, second hand for crypto, for Bitcoin, and that was in 2014, I believe. And yeah, I sold a MINI Cooper for Bitcoin in the parking lot of a strip mall at 10 or 11 at night, I think it was a Wednesday or a Saturday or I don’t know, it was definitely not banking hours.

And I used the smartphone and a QR code, and then I declared it on my taxes exactly the way I would if I had received cash. And that’s really the treatment for most of this stuff, so that should work for you too. If you enjoyed this video, please subscribe, like and share.

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