People are using more and more virtual money, like Bitcoin, which is not supported by a government. Many central banks have warned them. But most authorities take a practical approach. According to its definition, Wikipedia said Bitcoins are the global cryptocurrency and digital payment system called the first decentralized digital currency. This is because the system works without a central repository or single administrator. It was invented by an unknown programmer, or a group of programmers, under the name of Satoshi Nakamoto and released as open source software in 2009.
Bitcoins are important for law enforcement agencies, tax authorities and statutory regulators. They all try to understand how cryptography fits into existing milestones. The legality of your bitcoins’ activities is based on who you are, what you do with it and where you live.
It has demonstrated a controversial subject for supervisors and law enforcement agents, who have targeted the digital currency to control its use. We are still early in the game, and many legal authorities are still struggling to understand cryptography, much less the laws that do it. Among these uncertainties is a question: Is Bitcoin legal?
The answer is yes, depending on what you are doing. How you invest in Bitcoin.
Public authorities are increasingly concerned about the implications of bitcoin because it can be used anonymously and, therefore, a potential money laundering tool. In particular, law enforcement agencies seem to be concerned about the decentralized nature of the currency.
With the price of Bitcoins, which recently outperforms gold, more and more investors are interested in acquiring some of their digital cryptographic currencies. However, the same question that Bitcoin lovers have asked since the beginning of Bitcoins is still relevant. Is Bitcoin a good investment? Here are four things to consider before investing in Bitcoin.
1. The price of Bitcoins are extremely volatile
Although we have seen Bitcoin’s price increase compared to the current gold price. We also saw the price increase of $ 1,000 in the past and then drop to $ 200 and stay there. The problem with Bitcoin is that you never know how prices work. Bitcoin is a relatively new currency. The truth is that the foreign exchange market can crash at any time and your investments may fall. If you decide to invest in bitcoins, do not forget to buy low and sell high. Also, keep in mind that there is always the possibility that the bass is never louder.
2. You pay taxes to Bitcoins
Bitcoins are not exempt from taxes, and the type of taxes you have to pay is very complicated. If you are just an investor, paying taxes is relatively easy because you only pay the main profits and losses of all the Bitcoins you bought and sold. If you are a miner or you are playing Bitcoin and earn other means, taxes will be much more challenging. It not only pays taxes on capital gains but also pays taxes to the virtual currency as if it were a paper currency and may have to pay self-taxes over which Bitcoin won.
3. It is not Anonymous
Unlike popularity, Bitcoin is not anomyonic but a pseudonym. All Bitcoin transactions are publicly and registered on the network. However, the identity of the user remains unknown even with address behind it until the information is revealed during a purchase or under any circumstances
4. Not supported or regulated by a government.
It contrasts sharply with the dollar, yuan, pound and other forms of currency used around the world. Therefore, many people see bitcoins as something similar to monopoly money. This is because it is not a fiat currency nor is it based on something of tangible value like gold. In other words, it’s worth a bitcoin where people see their worth. While, in a sense, this applies to any currency, the value of a bitcoin is much more volatile than other forms of money because of its chaotic nature.
While, in a sense, this applies to any currency. The value of a bitcoin is much more volatile than other forms of money because of its chaotic nature.