The guidance does have a defintion of ownership: "Under § 61, all gains or undeniable accessions to wealth, clearly realized, over which a taxpayer has complete dominion, are included in gross income."
If you are the sole possessor of a private key which grants control of a cryptocurrency address then you have complete dominion over the crypto at that address. Under situation 2 of the guidance: "B has dominion and control of Crypto S at the time of the airdrop, when it is recorded on the distributed ledger, because B immediately has the ability to dispose of Crypto S."
Taken in the most taxpayer hostile interpretation that means that if the ledger is duplicated you have income because you have the ability to dispose of the forked coin with your private key even if you have no desire to touch it in any way.
This generates a lot of additional questions. What about a multisig situation? Can I have a buddy withhold a digital signature until I want to transact so that I did not own the crypto up until the transaction? Add in multiple jurisdictions of private key holders and things could get really interesting. Maybe it would be possible to pay no taxes at all! What about exchange coins where the person has no private keys and hence owns no crypto at all? Would they still have to pay taxes on crypto they clearly don't possess? What an absolute mess.
Lots of IRS regs are about the common case, not weird cases.
As an analogy: if I get paid by check on december 30th, and the check doesn't clear until january 2nd, is the income for the old year, or the new year? What if I hold onto the check, waiting for the new year? How about if I have the check, but I'm snowed in, and can't get to the bank? What if I can get to the bank on december 30th, but the bank is snowed in and closed?
(Answers: old year, old year, and then two don't knows)
What about the (unlikely) case that a wallet is shared between 2 or more individuals? Could I then "share" my private key with a trusted person (e.g. a parent) and claim _not_ to have complete dominion over the gains, thus no gross income?
So, according to the IRS, if you keep your crypto on an exchange, the exchange owns it, since it has complete dominion over the private keys. Taken literally, this would mean you wouldn't have to pay any taxes on it.
Right now there's a default transaction inclusion policy in Bitcoin Core that only includes a small number of low to zero fee transactions. Under current conditions zero fee transactions have to wait a while to be confirmed.
There's no proposal to change the default allowance for below standard fee transactions if the block size increases, so assuming cheap means zero or very low fee the increase in size will come from standard fee transactions which means increasing capacity won't drive down existing fees.
I'm not sure that your example makes sense. Suppose a scenario in which there are three miners with equal hash rates and a protocol which emits 3600 coins per difficulty period. The division of coins will be approximately 1/3 per miner when everyone is running. You're a miner and decide to enact your strategy.
What happens is that in higher difficulty periods your competitors who keep running constantly are making 1800 coins each. When the hash rate drops and you come on everyone gets 1200 coins each. Your expected revenue becomes 600 coins/period. The result of your strategy relative to just running constantly is halving revenue.
The only variance introduced is the speed at which new blocks are generated in each period.
While it's true that your remaining miners get more coins, kWh/coin is far higher and the power costs are most likely in normal currencies. In addition, the transaction times would become highly variable, reducing the utility (and hence value) of the cryptocurrency. Given both those points, you could cause huge instabilities in hash rate assuming you could persuade enough miners to join in.
The important point is that an attacker could use this just to wreck the cryptocurrency in question, although they may simply buy more coins at the lower price and profit from any rebound.
The attitude expressed by Faulks in the article seems to be precisely backwards if you genuinely believe that driving while intoxicated is a bad thing. The harm comes from the impaired reflexes and judgment, not someone punching in a command to drive home on a touch screen console. Making the two scenarios legally equivalent will only discourage responsible behavior.
Insurance is a cost of doing business. Coinbase generates their revenue from fees on the purchase and sale bitcoin, and from fees on merchant services. That's where the money comes from.
If you are the sole possessor of a private key which grants control of a cryptocurrency address then you have complete dominion over the crypto at that address. Under situation 2 of the guidance: "B has dominion and control of Crypto S at the time of the airdrop, when it is recorded on the distributed ledger, because B immediately has the ability to dispose of Crypto S."
Taken in the most taxpayer hostile interpretation that means that if the ledger is duplicated you have income because you have the ability to dispose of the forked coin with your private key even if you have no desire to touch it in any way.