Money equals power all over the world, even if it comes in different currencies. The U.S. stock market doesn’t just help people to gain and lose fortunes domestically, it also impacts forex and other stock exchanges. Bitcoin is different. It’s wholly unique in that there isn’t a steep learning curve. In fact, a student at George Washington University Online is just as likely, and perhaps maybe a little more, than a broker to be able to explain the concept of Bitcoin.
It’s a cryptocurrency that was made for computer users to be able to create their own little world. Payments made with Bitcoin are all but untraceable, which isn’t good for world governments. If they can’t get their hands on the source of each bitcoin, how will they be able to tax it?
Bitcoin and Dark Web
There’s a market for everything, including illegal activities. Drugs and even murder-for-hire are said to be obtainable online via the Dark Web. No government likes the idea of people being able to go online and pay for illegal products and services with no fear of reprisal. Entire societies have fallen by the proliferation of such activities. While stock market exchanges are made out in the open, the Dark Web offers insider trading tips at a premium. The sad part is that many of these kinds of activities are paid with bitcoins.
Taxing Online Transactions
Say that you bought 100 bitcoins two years ago and you just remembered that you had them. Today, you’d be a millionaire and the government is going to want their cut. This is where legislature gets tricky as Bitcoin was created on the web and none of its users want to be tracked or monitored in any way. Any money that you make is subject to tax. On the other hand, how is the government going to be able to tax transactions that can’t even be tracked? This is why countries like North Korea considered doing away with Bitcoin and other cryptocurrencies altogether. Bitcoin is also popular with George Washington University students because it can be used to pay for all manner of things.
When you want to cash out your stocks, you are responsible for reporting the transaction when you file taxes. It appears the U.S. government wants the same rules to apply to Bitcoin transactions.
Tracing Bitcoin Purchases and Sales
If you purchase Bitcoin rather than mine it, you need to have a source of funding. Most people just use their debit or credit cards to buy bitcoins and then keep the coins stored in a secure e-wallet. Exchanging bitcoins for cash can be harder. Unlike stocks, bitcoins aren’t really backed by hard currency. Instead, you have to find someone who believes that they are valuable enough to trade for cash and you are going to pay for that service.
Bitcoin doesn’t operate like the stock market, but it can get just as huge, if not bigger, as long as the government allows it. With that said, you shouldn’t invest in Bitcoin if you don’t know how it works. The good news is that you need far less formal trading experience to become a bitcoin miner than a stock trader.