One of the advantages of that transaction has been to become familiar with Coinbase, the service that holds my account ('wallet' in cryptocurrency jargon). They send me occasional emails informing me about new features. For example, during the last few months I learned:-
- 2016-05-24: Coinbase Exchange is now GDAX, Adds Ether Trading
- 2016-06-22: Coinbase adds support for PayPal and Credit Cards
- 2016-07-21: Coinbase adds support for Ethereum
- 2016-11-07: Payment Methods for European Customers
The Ethereum announcement in July caught my full attention. After a few posts touching on the subject...
- Ethereum Crash Course (June 2016)
- Bitcoin in the News : 2016-07 More++ (August 2016; 'Ethereum DAO')
- Cornell's IC3 (October 2016; 'DAO = Decentralized Autonomous Organization')
...I felt I had sufficient knowledge to buy a small quantity. I signed on to Coinbase (always an irritating three-step process: password, SMS code, email link), discovered that I needed a fiat currency (Euros in my case) to buy anything, sold half of my bitcoin, and bought an equivalent amount of ethereum (NB: lower case, to be consistent). Coinbase charged a 1.5% commission on both sides of the transaction.
After the second transaction, Coinbase showed that I still had all of the Euros in my account. I thought about trying a double spend to see what would happen, but decided that I didn't want to risk getting a black star next to my name.
The Coinbase account overview gives a price history of the currencies. Here's a comparison of the two currencies over the past year. Did I exchange a winner for a loser?
Left: ETH;
Right: BTC
In my previous post, Bitcoin in the News : 2016-11 More++, I noted, 'It sounds like every purchase with bitcoin might trigger a corresponding capital gain/loss'. If this is the case when I sold half of my bitcoin (a small amount) to prepare the ethereum purchase, the accounting is going to be awkward.
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