Is Bitcoin Legal?
What is Bitcoin?
Bitcoin is a peer-to-peer electronic cash system. It is intended as a means of payment.
Bitcoin is a cryptocurrency because it is encrypted.
Who created Bitcoin and when?
Satoshi Nakamoto created Bitcoin in 2009. No one is sure who he really is.
How does Bitcoin work?
Bitcoin relies upon Blockchain technology to function.
The Blockchain preserves Bitcoin transactions and the history of the Bitcoin ownership.
The Blockchain consists of numerous independent computers that store copies of the ledger across the globe.
What are Bitcoin Miners?
Miners are computers that facilitate Bitcoin transactions.
New Bitcoins are created every day as a reward for Bitcoin mining.
The successful miner is rewarded with newly created bitcoins and transaction fees, as new Bitcoins are created every day.
The current reward for mining is 12.5 newly created bitcoins per block added to the blockchain.
This reward will not last forever, as it will be cut in half every additional 210,000 blocks that are created.
How many Bitcoins exist?
16 million Bitcoins exist but ...
Once there are 21 million--no more will be created.
Who administers Bitcoin?
Surprisingly, there is no government or company that administers Bitcoin.
Is Bitcoin Legal?
In the US, it is legal. In Malta and Venezuela it is not legal.
Is Bitcoin subject to taxes?
Yes, just like everything else in life Bitcoin is subject to taxes. About the Author
Charles Zimmerer JD, CPA, is a licensed investment advisor.
He is president of a tax and investment consulting firm.
Mr. Zimmerer's firm assists taxpayers with their tax questions.
The firm also helps people with liquidating their Bitcoin holdings and diversifying their investments.
If you would like to speak with him, please contact him for a complimentary discussion.