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What is digital forensics in forensic science? Digital forensics plays a major role in forensic science. It’s a combination of people, process, technology, and law. Some notable methodologies are used to identify, collect, protect, preserve, analyze, extract, incident activity, recovery, and document a digital evidence report as per regional and international jurisdictions where the cybercrime occurred. Throughout the investigation data acquisition, data analysis, data integrity, data extraction, and reporting play a crucial role in the process. The digital forensic industrial practices and services vary from one region to other regions across the globe. In 2012, ISO (the International Organization for Standardization) and IEC (the International Electrotechnical Commission) launched an for Guidelines for identification, collection, acquisition, and preservation of digital evidence. Since then, different organizations frame their policies and implement them based on the Codes of Practice and Conduct for digital Forensic standards. There are some other notable used in practice, such as for and , and standards for conducting a conformity assessment on the evidence. ISO/IEC 27037:2012 common framework ISO/IEC frameworks ISO/IEC 17025 digital testing laboratory setup ISO/IEC 17020:2012 There are several branches in digital forensics that play an active role in cybercrime divisions. As per ISO/IEC 27037 framework, the examiner should adhere to the use of tools validated  by the body. Data Acquisition, Data Validation and verification (V&V), Evidence Extraction, Data Reconstruction, and Documentation. There are many open-source and proprietary Digital Forensics Tools available in the market such as the Sleuth Kit, FTK Imager, Xplico, osForensics, Winhex, etc., What is NIST definition of digital forensics? Digital forensics is used to identify, collect, protect, preserve, analyze, extract, incident activity, recovery, and document a digital evidence report for cybercrime activities on the victim and criminal offender’s evidence for legal liabilities, civil, administrative, and criminal proceedings. Digital forensic investigation is carried out by law enforcement, and individual and private entities. Throughout the investigation data acquisition, data analysis, data integrity, data extraction, and reporting play a crucial role in the process. The key characteristics that one should possess to become a successful digital forensics examiner? Anything comes to your mind now? In the digital forensic field, the roles and responsibilities of a forensic practitioner adhere to the digital service delivery of cybercrimes, security incidents, and other related crimes. This role required several skill sets to achieve high-level forensics examiner experience in capturing, analyzing, and extracting the digital data from the evidence. The following skill sets are requisite to be a forensic practitioner. ✓Investigative strategy ✓Education and experience in Information technology, Cybersecurity, cybercrime, and forensics field. ✓Existing and new forensic Tools and Techniques (T&T). ✓Laws and Industry regulations knowledge. ✓Industry practices. ✓Ethics in professionalism. ✓Emotional intelligence. ✓Competent and problem-solving. ✓Professional certifications in Cybersecurity, digital forensics, and hacking. ✓Subject-matter expert (SME) to the team. ✓Chain of custody. ✓Communications skills. Introduction: Since the formation of intellectual property rights. The main purpose and objectives vary from country to country across the globe with consideration such as types are patents, copyrights, trademarks, and trade secrets etc., Our main investigational focus is to examine a USB drive belonging to an employee who left the company and now works for a competitor. Investigation and Development Procedures: To conduct internal digital investigations and forensics examinations on company computing systems. Our main investigational focus is to examine a USB drive belonging to an employee who left the company and now works for a competitor. We have received additional instructions with the keyword “ ” to look for the documents in the USB drive. In this section, we examine the USB drive that might relate to this case. All the required procedures such as i various operations are documented with , it’s an open-source tool . confidential to identify any evidentiary artefacts dentifying, analyzing, investigating, developing, and testing Autopsy [1] Hands-On Project 1/Hands-On Project 2/Hands-On Project 3 Assessment Scope: The assessment scope of the Digital forensic investigations for this case is as follows: To analyze the digital media with respect to the evidence on Company proprietary materials. Giggig Tech To capture a disk image using “Access Data FTK Imager Lite” for digital forensic investigations. To analyze the USB to discover evidence related to M57 Patent Case. To discover the metadata using WinHex editor. To explore different types of File Headers. Hands-On Project 1–3 First, Open the “Autopsy tool” Home screen window on your PC. As shown in Figure 1. Step 1: Start Autopsy for Windows and click the icon. In the New Case Information window, enter in the Case Name text box. Step 2: Create New Case C1Prj01 ![Figure 2. To create a new case and choose the working directory. ](https://cdn.hackernoon.com/images/-jtd3jl1.png) Now, Click next to the Base Directory text box. Navigate to and click your work folder, and then click . Step 3: Browse Next In the Select Data Source window, click the list arrow, and click . Click the button next to the “Browse for an image file” text box, navigate to and click your work folder and the file, and then click . Click . In the Configure Ingest Modules window, click . Click and then . Step 4: Select data source type Disk Image or VM file Browse C1Prj01.E01 Open Next Select All Next Finish ![Figure 4. To add a source and source type information’s. ](https://cdn.hackernoon.com/images/-ijf3jia.png) ![Figure 5. Data source added to the database. ](https://cdn.hackernoon.com/images/-9eg3jjl.png) In the Tree Viewer pane, expand , , , and . We examine each subfolder under the Tree pane section to determine which folder might contain to this case. Step 5: Views File Types By Extension Documents files of interest If you found any files related to the case, select the files as a group, right-click the selection, and click . In the Save dialogue box, click to save the files automatically in Autopsy’s case subfolder: \Chap01\Projects\C1Prj01\Export. Step 6: Extract File(s) Save Work Write a short report of no more than one paragraph in the report, including facts from any content you found. When you’re finished, leave Autopsy running if you’re continuing to the next project. Step 7 Conclusion: In this USB investigation case, we identified and analyzed the seized USB drive for any potential breakthrough in this case. As a result, we successfully extracted the two files (one text file and one Excel sheet). Based on the extracted files from Autopsy, we identified Sylvia left a suicide note as shown in Figure 8. Furthermore, in Figure 9, an Excel sheet briefs about the asset auditing information. Sylvia’s life insurance is valued at $1 million set along with the rest of the assets. That concludes this case is related to a possible murder by her boyfriend to claim the insurance and other assets as a partner. Hands-On Project 2–2 Investigation and Development Procedures: To conduct internal digital investigations and forensics examinations on company computing systems. Our main investigational focus is to examine a USB drive belonging to an employee who left the company and now works for a competitor. We have received additional instructions with the keyword “confidential” to look for the documents in the USB drive. In this section, we examine the USB drive to identify any evidentiary artefacts that might relate to this case. First, Open the “Autopsy tool” Home screen window on your PC. As shown in Figure 1. Step 1: Special Note: Please, refer to Hands-on project 1–2, and repeat the same procedures from step2 to step5. To create, browse, select folders and create a workspace, procedures are similar to Hands-on project 2–2. Click the button at the far upper right, type “confidential” in the text box, and then click . Step 6: Keyword Search Search In the Result Viewer pane, a new tab named opens. Click each file to view its contents in the Content Viewer pane. Step 7: Keyword search 1 to select the files in the Keyword search 1 tab. Right-click this selection, point to , and click . In the Create Tag dialogue box, click the button, type in the Tag Name text box, and then click . Step 8: Ctrl + right-click Tag File Tag and Comment New Tag Name Recovered Office Documents OK In the Create Tag dialogue box, click the button, type in the Tag Name text box, and then click . New Tag Name Recovered Office Documents OK Click at the top. In the Generate Report window, click the option button in the Report Modules section, and then click . Step 9: Generate Report Results — Excel Next In the Configure Artefacts Report window, click the button, click the check box, and then click . Step 10: Tagged Results Recovered Office Documents Finish In the Report Generation Progress Complete window, click the pathname to open the Excel report. This Excel file should have several tabs of information about the files you tagged for this project. Step 11: Results — Excel Write a memo to Ms. Jones, including facts from any content you found, make sure to list the filenames where you found a hit for the keyword. List the cluster numbers for hits that occurred in unallocated space. Include the Excel spreadsheet with the report. Step 12: Conclusion: In this USB investigation case, we identified, and analyzed the seized USB drive for any potential breakthrough in this case. As a result, we successfully extracted the Nine files with the given keyword “ ” and generated an Excel sheet. Confidential Based on the extracted files from Autopsy, we identified Ex-Employee taking the company’s confidential and trade secret documents as shown in Figure 8. And Figure 13. Furthermore, an Excel sheet briefs about the Confidential file information to put forward the case legally with the proceedings. That concludes, this case is related to Intellectual property (IP) theft by an Ex-employee and shared with the competitor for grants in exchange. Hands-On Project 3–3 Investigation and Development Procedures: To conduct internal digital investigations and forensics examinations on the company’s trade secret theft. Our main investigational focus is that was to the HR department belonging to , Ralph Williams, who left the company and We have received additional instructions Ralph Williams that contained from April 2006, to in the USB drive which was shared with the new employer Smith Sloop Boats, a competitor of ACE Sailboats. Ms. Olsen specified; another specialist has already made an image of the USB drive in the Expert Witness format (with an . E01 extension). In this section, we need to examine its contents for any photograph files and other artefacts that might relate to this case to justify whether the anonymous complaint is true or a false flag. to examine a USB drive received through an anonymous letter a former employee now works for a competitor. to take photos belonging to ACE Sailboats Pvt ltd., trade secrets look for the Photos First, Open the “Autopsy tool” Home screen window on your PC. As shown in Figure 1. Step 1: Special Note: Please, refer to Hands-on project 1–2, and repeat the same procedures from step2 to step5. To create, browse, select folders and create a workspace, procedures are similar to Hands-on project 3–2. In the Result Viewer pane, scroll to the right, if necessary, until the Modified Time column is in view. Sort the column by clicking the header. Step 6: Modified Time Scroll down until you find the first file with a starting month of April 2006, and then click the file to view it in the Content Viewer. Press the on the keyboard to view all files created or modified in April 2006. Step 7: down arrow + every file that has a photo of a boat or part of a boat. Right-click this selection, point to and then , and click . Step 8: Ctrl Right click Tag File Quick Tag Follow Up In the Tree Viewer pane, scroll down and expand , , and . In the Result Viewer pane, click the tab to view the tagged photos. Step 9: Tags Follow Up File Tags Thumbnail To create a report, click Generate Report at the top. In the window, click the option button in the Report Modules section, and then click . Step 10: Generate Report Results — HTML Next In the Configure Artefacts Report window, click the button, click the check box, and then click . Step 11: Tagged Results Follow-Up Finish In the Report Generation Progress window, click the pathname to view the report. When viewing the report, click the links to examine the tagged files. When you’re finished, click in the Report Generation Progress window. Step 12: Results — HTML Close Right-click on the Html Report and Click Open to view the report in detail. Step 13: Contains thumbnails of images that are associated with tagged files and results. Step 14: Conclusion: In this USB investigation case, we identified and analyzed the USB drive for any potential breakthrough in this case. As a result, we successfully extracted the Thirty-seven files with the given instruction “Photos” and generated an HTML report. Based on the extracted files from Autopsy, we identified Ex-Employee didn’t take the company’s confidential and Trade secret documents as shown in Figure 15 summary. Furthermore, an Excel sheet briefs about the Confidential file information to put forward the case legally with the proceedings. That concludes, this case is not related to Intellectual property (IP) theft by an Ex-employee, and this claim is a false flag. — — — — — — — — — — — — — — — — — — — — — — — — — THE END Thanks for reading! Have a pleasant day! Quote of the day: **Growth is often a painful process.**

                        成長は往々にして苦痛を伴う過程である。

A Guide to Doing a Digital Forensics Examination on Digital Media (USB)    

Veterinary Telemedicine: Offering Animal Healthcare Online

It is no secret that Crowdfunding hold a tremendous potential in helping entrepreneurs and creators in pushing their projects forwards and gathering much needed financial resources. In 2018, The crowdfunding market size was valued at 10.2 billions dollars and was set to almost triple by 2025. It is undeniable: crowdfunding platforms give unprecedented opportunities to creators and make it possible to finance projects that would have been otherwise neglected and/or undervalued by traditional investors. It enables the process of investment to be democratized and let anyone  invest and contribute to innovative projects they are interested in. The problem is that crowdfunding through crowdfunding platforms has many pain points that may get in the way of the successful deployments of brilliant, disruptive ideas. When it comes to using Crowfunding platforms one of the main issues is the level of control exercised by those profit-motivated platforms: Often the platform acts as a gatekeeper, reinforcing rules that may sometimes be arbitrary or even detrimental to creative projects. The project can also be at risk if they happen to disagree with often ambiguous terms of service. Another problem is the fees taken by such platforms. Often such fees are quite expensive and could be used by the creators to actually move their project forward. Why pay the platform money that was meant to actually finance the project? Crowdfunding faces the issues that appear in any service that rely on third parties. The problem is that it beats up the democratic philosophy behind Crowdfunding and the problems it’s supposed to solve: that is the free contribution of the crowd to a project they happen to believe in. It distorts a creative endeavor that’s the fruit of collaboration between creators and enthusiasts into a business scheme. And this is precisely where Blockchain-reinforced Crowdfunding comes into play. ICOs: The missing link between crowdfunding and blockchains As we know, Blockchains are meant to enable decentralized, peer-to-peer exchange of value. So how can this advantage be leveraged for funding startups? In 2012, a Bitcoins enthusiast and software developer,  J.R Willet sought to raise capital for a project he wanted to start called MasterCoin. J.R. Willet wanted to exploit the bitcoin infrastructure by adding a layer in top of it in order to perform complex financial transactions  such as smart  property and saving wallets. To fund the project, one simple idea was implemented: contributors could send bit coins to development teams. In exchange, they received  digital tokens that could be used later on the Mastercoin service and whose value increased as the project gained leverage (i.e. they could be sold later on as their values increased). This novel way of crowdfunding worked like a charm: Willet managed to raise a fund of 5000 Bitcoins  (approx $500 000). This method of raising capital came to be known as Initial Coin Offering, and the possibilities that it opens up for crowdfunding are endless. So how does the funding work? In general, the process goes as follows: A startup company announces an idea and sets a date for funding the project. Contributors then pledge digital currencies (such as Bitcoin)  in exchanging for a number of digital tokens. Since ICOs generally come from tech companies, those tokens can then be used to use the services on the platform built by the startup. Eventually, as the value of the startup goes up, those tokens can then be sold for profit on digital exchange markets. One of the fastest ways to set an ICO is through the Ethereum infrastructure. As of now, Ethereum is the main platform for conducting ICOs. Ethereum even created a standard called ERC-20 that defines how Ethereum-based tokens must be implemented in order to ensure compatibility within the whole Ethereum network. Put simply, ERC-20 tokens define for developers what needs to be implemented in their tokens in order to ensure compatibility and integration with the rest of the Ethereum ecosystem such as wallets and marketplace. In terms of crowdfunding, this ensures the would be investors could trade their acquired tokens as most crypto-exchanges support ERC-20 based tokens. Why ICOs are disruptive As they leverage the potential offered by blockchains, ICOs have many benefits both from a creator and an investor perspective. It ensures that startups can gain support from contributors from all over the world,  without any geographical factor entering into the equation . It also guarantees that the self-funding startup will have control over their product as they don’t have to go through the hurdle of dealing with crowdfunding platforms  and international financial institutions, which not only spare them paying costly fees but also guarantees that the startup will not be subject to the whims and rules of such institutions. This opens up the doors for alternative ideas that could not have been able to find funding through traditional means such as Crowdfunding platforms and venture capital funds. Examples of ICOs Even though the concept of Initial Coins Offering is relatively new, it already has been used to successfully raise funds, most often for ambitious Blockchains related projects. In attempting to evaluate the potential of ICOs, one would be well-advised to consider both the amount raised by the tokens distribution event as well as the return on investment as time elapsed. The most known example of a project that successfully launched itself through ICO fundings is Ethereum itself, effectively raising $18 million in 2014, in the period of 42 days. Ethereum is of course, one of the leading blockchain-powered technologies in the world today and Ether, Ethereum’s crypto-currency went from $0.30  at its inception to $240.70 as of now (July 2020). Another notable case of raising funds through ICOs is EOS, which managed to raise a whooping $4 billion through its ICO in 2017. The project managed to raise the sum based on investors confidence alone. The product has only been launched in 2018. EOS’s positioned itself as  the most powerful infrastructure for decentralized applications. Investors confidence can be explained by the fact that it supposedly targeted solving the main pain points attributed to Blockchains such as performance, speed, and scalability. The enthusiasm of the investors is understandable since those pain-points are supposed to be the main reasons impending a large-scale, disruptive democratization of Blockchains. While it is already the 5th most powerful  cryptocurrency in the market, $4 billion is an enormous sum and whether EOS will manage to fulfill the high expectations it set for itself is a question remaining to be answered. Conclusion ICOs are a viable alternative to traditional crowdfunding. It offers many advantages such as more freedom, less involvement from intermediaries and less fees. The current benefactors are mainly blockchain related  projects, but it is to be expected that other projects will eventually manage to self-funds through ICOs.

Blockchains for Crowdfunding

Digital asset trading platforms or cryptocurrency exchanges have been a hot topic in the blockchain industry and will continue to be so as long as the industry exists. According to statistics, there are about 2004 Listed cryptocurrencies on , which are tradable in about 14287 markets with a total market cap of USD 222.8 Billion, this creates a daily trade volume of USD 14 Billion. CoinMarketCap These figures will be exceeded if Decentralized Exchanges, P2P trades, ICO investment trades among others were considered. Various types of cryptocurrency exchanges have been in existence since the introduction of blockchain to humanity: It all started with , which came with the problem of trust, exposure of document, security, and high fees as funds are being collected into a centralized wallet, pending when the users are ready to trade them. Centralized Exchanges (CEX) Then came the Decentralized Exchange (DEX), this allows peer to peer transaction between People without the involvement of any third party. This effectively makes the fee lesser but has its own problems, like low liquidity. Then came the , this allows peer to peer transaction between People without the involvement of any third party. This effectively makes the fee lesser but has its own problems, like low liquidity. Decentralized Exchange (DEX) combines the elements of a Centralized Exchange and Decentralized Exchange to correct their shortcomings while offering you the best of both worlds. Hybrid Exchanges Why We Need Something Different? Although there are many cryptocurrency exchange platforms currently available, it is however evident that the majority of them follow the standard model and protocol that offers a limited and frustrating trading experience to traders who would really love to get more out of exchanges. The need for an exchange that minimizes the conventional boundaries and provides its users with a comprehensive trading platform for trading various types of digital assets than just cryptocurrency, as well as tackle problems like security, high trading fees, lack of liquidity, slow customer support service, limited or insufficient asset pairing, and a user friendly interface has led to the creation of next Hybrid Exchange - SynchroBit™. SynchroBit™ Synchrobit™ is an innovative hybrid peer to peer platform, built by , an international group of experts in digital assets trading, blockchain, finance, branding, and digital marketing,  for a faster, smarter, cheaper, and secure trading of digital assets and cryptocurrencies. Synchronium® With its core technology based on the unique SYNCHRONIUM® innovative consensus protocol, is highly fast and is capable of handling 1 million transactions per second, meaning that it takes approximately 40 Nanoseconds for every transaction on the platform to be completed. PoSync™, SynchroBit™ This will enable users to execute various pairing models and bids. Also, being peer to peer, the platform will prevent manipulations of any sort. Features Of SynchroBit™ Being a Peer to Peer digital trading platform that allows trade for cryptocurrencies and Fiats, SynchroBit™ has some rich features that are simple to use and set it apart from every other exchange. Some of them are listed below: : Security has always and will always be a challenge to exchanges, as they are going to be under constant attacks from hackers who are interested in stealing money from the platform. SynchroBit™ is well equipped with Cyber-Security infrastructures and technology, effectively built to tackle cyber threats and attacks from hackers. Security Also, users of the platform will be empowered with training that will enhance the security of their account and provide them with available tools and solutions to maximize their security. : SynchroBit™ will offer high liquidity and diversity of listed assets. The platform is currently a P2P crypto trading platform, but additional trading markets which include precious metals, energy, and commodities being made available to users in the next version. Diversified Market This will make it the first trading platform to offer additional trading features with crypto assets. Other trading procedures such as Margin Trading and Futures will also be available. All trading pairs will be P2P which prevents any form of manipulation and enhances the liquidity of assets. All markets will be arranged in Modules like Crypto Market Module, Metal Market Module, Energy MArket Module, Commodity Market Module, ICO Market Module, etc. : By combining the benefits of both the Centralized Exchange (CEX) and the Decentralized Exchange (DEX), SynchroBit™ will offer the best of both worlds in its Hybrid Exchange by solving the problems of speed, user interface, risk, and high fees. Hybrid Functionality Our Key Differentiators With the aim of making trading faster, smarter, easier, cheaper, and better than it has ever been, SynchroBit™ introduced innovative trading solutions and tools that help minimize risks and maximizes profit while availing users the option to trade a diversified range of digital asset portfolio. Tools like the Trend-Limit™ will enable users to place an order at two different expected conditions with a single fund. Users can simultaneously place their expected target price at a High Stop-Limit and Low Stop-Limit with a single fund. Users will have access to instant customer support services from the platform’s advanced customer service technologies and well-trained staff, experienced in providing instant customer support. The platform uses AI technology to provide users with high-quality data, analysis, and market insights about listed digital assets which help them trade smartly during the uncertainty in the market. Income will be generated from value-added services to users, which will, therefore, make the trading fees on SynchroBit™ very competitive and cheaper, while there will be no fees charged for trading with the SNB token. SynchroBit™ will be open to users’ feedback and ensure to employ them to improve its services and performance, while periodically conducting surveys to analyze users’ experiences on the platform and improve its UI and UX. SynchroBit Coin (SNB) SynchroBit Coin or the SNB Token is the official currency of the SynchroBit Trading Platform based on the Ethereum Blockchain. It is an ERC-20 Token which enables its holders to benefit from its extended functionalities on all Synchronium® platforms as well. The SNB Token will be integrated into the SynchroBit™ platform by the end of Public ICO and will serve as a major payment option for fees on the platform including trading fees. The SNB Token will be listed on some of the reputable exchanges with high liquidity and volume such as LiveCoin, CoinsBit, Crex24, and BTC Alpha. It will also be made available for trade on major ETH decentralized exchanges too. SNB Token has been successfully generated on the 17th of April, 2019, on the Ethereum MainNet. The Pre-ICO buyers have already received their tokens. A total of 5% of the total supply is allocated to Pre-ICO holders and Private investors with a Lock-in period of 24 months. The Pre-ICO held from the 20th of April to the 20th of July, 2019, with a minimum purchase of USD 1000. Crowdsale will be done via three rounds of ICO from the 1st of August to the 28th of December 2019m while an IEO will be conducted on partner exchanges which will be announced before the 3rd round of ICO.  The sale of ICO in the 3rd round will be conducted simultaneously with the IEO as the IEO will be limited to only users of the partner exchanges. The SNB Token will cost $0.2 USD in the first round, $0.25 USD in the second round, and $0.35 USD in the third round. Check Out our Profile for our Links Telegram: https://t.me/snbex

Hybrid Trading Platforms - Meet Your Newest Competitor

Coinbase has grown to be one of the largest and most prominently used cryptocurrency exchanges in the world. As of this writing, boasts more than 25 million users on its platform. As impressive as this stat is, it comes as a bit of a shock that when it comes to Coinbase taxes, the exchange is unable to provide accurate documentation to millions of its users. This article breaks down why Coinbase taxes are so problematic and offers a solution to the problem. Coinbase Cryptocurrency Exchanges Cryptocurrency exchanges like Coinbase make it easy for everyday consumers to buy and sell cryptocurrencies. By nature of the technology that these exchanges operate on ( ), users are able to send and other cryptocurrencies to wallet addresses outside of their own network. An example of this would look like you buying Bitcoin through Coinbase and then sending it to a Binance wallet address to acquire new coins and assets on that Coinbase does not offer. blockchain Bitcoin Binance Being able to send cryptocurrencies to other locations and other wallet addresses is core to the whole premise of crypto. However, this core principle is also the culprit behind the massive Coinbase tax problem. A quick rundown of how the IRS treats cryptocurrency for tax purposes in the US The IRS treats cryptocurrencies as . Just like other forms of property — stocks, bonds, real estate — you incur a tax liability when you sell cryptocurrency for more than you acquired it for. property for tax purposes In this sense, cryptocurrency trading looks similar to trading stocks for tax purposes. For example, if you purchased 0.1 Bitcoin for $1000 in April of 2018 and then sold it two months later for $2,000, you have a $1,000 capital gain. You report this gain on your tax return, and depending on what tax bracket you fall under, you will pay a certain percentage of tax on the gain. Rates fluctuate based on your tax bracket as well as depending on if it was a short term vs. a long term gain. On the flip side, if you sold your cryptocurrency for less than you acquired it for, you can write off that capital . loss to save money on your taxes Why can’t Coinbase or other exchanges provide me with my required tax reports? To fully understand this problem, you need to understand how capital gains and losses are calculated. To calculate your gains/ losses, you simply apply this formula: Fair Market Value — Cost Basis = Capital Gain / Loss What is Cost Basis? is the original value of an asset for tax purposes. In the world of crypto, your cost basis is essentially how much it cost you to acquire the coin. Sticking with our Coinbase example, if you paid $1,000 to acquire 0.1 Bitcoin on Coinbase, your cost basis is $1000 for that Bitcoin. Cost Basis What is Fair Market Value? is just how much an asset would sell for on the open market. Again with cryptocurrency, this fair market value is how much the coin was worth in terms of US dollars at the time of the sale. So if I sold that same Bitcoin on Coinbase for $2,000, that would be my fair market value. Fair market value Using the formula, you can see that in this case, you have a $1,000 capital gain. $2,000 — $1,000 = $1,000 gain The Coinbase Tax Problem So here’s the huge problem: Because you can send cryptocurrencies from other platforms into Coinbase at any time, Coinbase has no possible way of knowing how, when, where, or at what cost you acquired that cryptocurrency that you sent in. Coinbase only sees that it showed up in your coinbase wallet. This means that anytime you move crypto assets off of Coinbase or into Coinbase from another location, Coinbase completely loses the ability to provide you with accurate tax information. This is because it has no way of identifying what your cost basis is in that certain cryptocurrency which is an ESSENTIAL piece to figure out your capital gain or loss. As you can see pictured below, Coinbase explains to their users themselves that their generated tax reports won’t be accurate if you have done any of the following: Bought or sold digital assets on another exchange Sent or received digital assets from a non-Coinbase wallet Sent or received digital assets from another exchange including Coinbase Pro, Stored digital assets on an external storage device, or participated in an ICO. That’s a lot of exclusions, and it likely accounts for over half of Coinbase users that are left high and dry when it comes to accurately reporting taxes. The Bigger Problem As you may have guessed, this doesn’t affect just Coinbase. Every cryptocurrency exchange out there that allows users to send and receive cryptocurrencies from other platforms (essentially all of them) face this exact same problem. This means that millions of cryptocurrency users cannot rely on their exchanges to provide them with accurate tax reports. It is simply impossible for the exchange to do so. Maybe you’ve seen all of the frantic posts on the internet of cryptocurrency exchange users freaking out because of the tax reports they tried to generate from Coinbase and other exchanges and how completely inaccurate they are. The Solution The solution hinges on aggregating all of your cryptocurrency data that makes up your buys, sells, trades, air drops, forks, mined coins, exchanges, swaps, and received cryptocurrencies to build out an accurate tax profile that contains all the necessary data. We built exactly this at CryptoTrader.Tax. is a tool for cryptocurrency traders built to solve this tax problem. It allows cryptocurrency users aggregate all of their historical trading data by integrating with exchanges and making it easy for users to bring everything into one platform. Once the historical data is in the system, the tax engine will auto-generate all of the necessary tax reports for cryptocurrency traders to file . CryptoTrader.Tax like the 8949 Today, thousands of users use CryptoTrader.Tax to securely and automatically build out their required . Users can take these generated reports to their own tax professionals or can simply upload them into tax software like . cryptocurrency tax reports TurboTax As of January 2018, the CryptoTrader.Tax team partnered up with Intuit’s TurboTax to make the filing process seamless and fast for traders. In Summary Coinbase taxes are not accurate for millions of users. If you are one of the many facing this problem, it can be wise to leverage tax aggregating tools like CryptoTrader.Tax to aggregate everything and stay compliant. *This post is for informational purposes only and should not be construed as tax or investment advice. Please speak to your own crypto tax professional , CPA or tax attorney on how you should treat taxation of digital currencies. Originally published at www.cryptotrader.tax .

The Coinbase Conundrum: Providing Accurate Tax Information to Users

“Centralized” versus “Decentralized” Thinking About Technology Bob Dylan mural in Minneapolis (21 April 2018) Digital technologies are hot these days. Everybody is talking about them. My colleagues and students are all intrigued by artificial intelligence, robots and blockchain. You’re not up to speed if you don’t incorporate “tech” into whatever it is that you are doing. What worries me, however, is that a lot of the “tech talk” I hear lately focuses on automating and streamlining existing procedures, processes and practices. The focus is on integrating technology into the old, centralized world of hierarchies and compliance. I really believe this is a mistake. Instead, what we should be focusing on is how digital technologies can create a new more open, inclusive and “decentralized” world in which everyone has the opportunity to be more creative and entrepreneurial. And here I don’t mean the creativity that comes from simply using new technological tools, such as 3D printing or digital content creation. I am referring to the potential of digital technologies to transform our society. That is why we need to have a much clearer understanding of how decentralization can help spur creativity, entrepreneurship and innovation. The Centralized Approach But not everyone thinks of new technology in this way. For many, new technologies are seen as a means to build even stronger hierarchies and reinforce traditional ways of doing things. Here, the idea is that digital technologies can strengthen centralized systems. Many of my colleagues see technology as a means to ensure and monitor compliance, thereby “robotizing” society (in the sense that AI is going to help business owners and business leaders decide what is “good” or “bad” behavior, who should be hired, promoted or let go). They believe that technology can help solve the typical problems (mainly information and participation problems) with hierarchies. What I have noticed recently, however, is that people who think of technology this way are quick to abandon it when things go wrong. Or, when things get really disruptive, the technological developments are viewed as a bubble, a myth or empty science fiction. One can see this skepticism recently in discussions of autonomous cars, super-intelligent AI or the wide-scale adoption/acceptance of crypto-currencies or blockchain applications. The Decentralized Approach We need to be much smarter about new and disruptive technologies. Instead of reinforcing “centralized and traditional” systems and pre-defined structures, we must understand and appreciate that technology has the ability to “decentralize” society and create more level playing fields (creating more opportunities to people who operate outside the established practices and reputations). This in turn will spur entrepreneurship, facilitate sharing and encourage collaborative creative activities. Entrepreneurship In a decentralized and “tech-centered” society, individuals no longer have to be satisfied with the prospect of becoming anonymous cogs in a larger organization or corporate machine. Instead, technology has the capacity to transfer control from organizations and institutions back to individuals. Individuals have the ability to maximize their personal potential by building a lifestyle and a sense of identity that revolves around doing something that they care passionately about. And technology makes this possible. The digital transformation ushered in by the gradual expansion of this type of opportunity has created an unprecedented degree of choice as individuals seek to express themselves in whatever way they believe best suits their own unique interests and talents. Think YouTube, Medium, Instagram. New platforms for personal expression are everywhere. For some, this may involve becoming a developer, for others, a designer, and — of course — for some, it involves setting up a business and becoming a serial entrepreneur. There are endless possibilities. It doesn’t matter what people aspire to be, the key point is that digital technologies afford a greater range of opportunities than ever before to engage in a meaningful life project through “work”. This is the “age of opportunities”. Sharing Technologies also allows for the sharing of ideas in a “decentralized” way with less barriers (and first needing to be accepted by incumbents or other traditional “authorities”). But it is not only about sharing information (the one-way dissemination of information from one party to another). Sharing is about building an on-going and constructive dialogue with other individuals that can then have a significant impact on the future opportunities. We need to recognize the material benefits that accrue from sharing. By sharing, more inclusive and meaningful relationships with others can be forged. Sharing fosters a sense of belonging and expands the pool and diversity of potential collaborators. Collaboration Technology also facilitates “collaboration”. By “collaboration”, I mean any project that involves building something together through a process of co-creation. And digital technologies play a crucial role in facilitating this kind of meaningful collaborative activity. What I love about the digital age is the possibility to interact with people that I don’t know and, probably, never will really know. This creates multiple opportunities for collaborative “co-creation” that I’ve never experienced before. And There is One More Thing I spoke at a conference in Minneapolis last week where it became clear that it is important to acknowledge that these decentralized opportunities offered by digital technologies are not open to all and that new forms of social exclusion are created. Discussions focused on the need of a “basic income” were introduced. Nevertheless, we shouldn’t be overly dismissive or cynical about the extent and importance of the social change initiated by digital technologies. But, nor should we be complacent and assume that technologies will deliver a better world. We need to develop strategies to ensure that technologies deliver on their promise. For instance, the most innovative companies today understand that the delivery of innovative products and services over the long term will require a greater degree of cooperation between multiple actors and stakeholders. Product development requires gathering together disparate elements (hardware and software) and integrating them into a coherent product that delivers a value proposition that has relevancy for consumers. This task of gathering — identifying, coordinating and then combining — diverse elements into a coherent package will require unprecedented levels of cooperation both within the firm (i.e., between different “divisions” of the firm), but also with “external” partners, such as developers, creators, universities, startups. A firm’s capacity to build and maintain inclusive relationships in which all partners work collaboratively together will only become more crucial in the future. According to this approach, the existence of hierarchies or “silos” are counter-productive, and those firms that fail to embrace a more decentralized and open form of organization will struggle to innovate (and eventually survive). What is interesting is that an important part of decentralization involves “giving back” to society or the local community in order to improve that community. The more “open” companies understand the importance of embedding themselves in a local community as a means of facilitating (directly indirectly) collaboration. This may mean the corporation supporting “local” startups that operate in diverse sectors of the economy, possibly unrelated to the corporation’s main business. and At least, this interest in community-building is found amongst the most innovative corporations. For instance, during the conference, the example of Under Armour’s founder-CEO Kevin Plank was used. Kevin Plank has built a reputation for investing (through his fund Sagamore Ventures) in a number of startups and projects in the Baltimore area. Some of the companies that have received such support — for example, a flower delivery company — are not necessarily in fields that Under Armour will ever be able to exploit commercially. By encouraging such firms to re-locate to Baltimore, Kevin Plank correctly recognizes the potential value for his company in community-building and creating a business and social environment that makes a particular region more attractive to the best talent. Presentation at the University of Minnesota (20 April 2018) 👏 Thank you for reading! Please click the below, or leave a comment. There is a new story every week. So if you follow me you won’t miss my latest insights about how the digital age is changing the way we live and work.

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