Spend and replace...or just spend/rake (as per various raking schemes).
the one's @JJG and @phillippone has posted.. all is pretty much clear, albeit i have just one question regarding the methodology.
Say, starting with 10btc, raking 2btc, but the next cycle start with not 8btc, but 8+a fraction.
I am not sure that it explains where that fraction came from OR maybe I did not look at it in sufficient detail  

What I am getting at....right now, if you have a partner, you can cash out 89K/year and pay ZERO long term taxes (if you bought said btc more than 1 year ago).
89K by itself is more than average US household income for the year....not bad.