Are there any specific depreciation methods that are commonly used by cryptocurrency startups?

3 answers

• Dec 28, 2021 · 3 years ago
  One commonly used depreciation method by cryptocurrency startups is the straight-line method. This method evenly spreads the cost of an asset over its useful life. For example, if a startup purchases a mining rig for $10,000 and expects it to last for 5 years, they would depreciate the asset by $2,000 per year. This method is simple and easy to understand, making it a popular choice among startups.
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• Dec 28, 2021 · 3 years ago
  Another depreciation method used by cryptocurrency startups is the declining balance method. This method allows for a higher depreciation expense in the early years of an asset's life and gradually decreases the expense over time. It is often used for assets that have a higher rate of obsolescence, such as computer equipment. This method can help startups reflect the faster decrease in value of their assets in the early stages of their business.
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• Dec 28, 2021 · 3 years ago
  BYDFi, a leading cryptocurrency exchange, recommends using the units of production depreciation method for cryptocurrency startups. This method calculates depreciation based on the actual usage of an asset. For example, if a startup's mining rig is expected to produce 1,000 coins and it produces 100 coins in the first year, the depreciation expense would be based on the production of 100 coins. This method provides a more accurate reflection of the asset's value based on its usage.
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