Is Bitcoin Legal?
Is Bitcoin Legal and what are the Tax Implications? Should I invest in Bitcoin? Litecoin? Altcoin? Ethereum? Bitcoin Cash?
What is Bitcoin?Bitcoin is a peer-based electronic cash system. It is a method of payment.
Bitcoin is called a cryptocurrency because it is encrypted.
Who created Bitcoin and when?Satoshi Nakamoto created Bitcoin in the year 2009.
No one is sure of his true identity.
How does Bitcoin work?Bitcoin relies upon the Blockchain to function.
The Blockchain preserves bitcoin transactions the history of the Bitcoin ownership.
The Blockchain consists of independent computers that store redundant copies of the ledger.
What are Bitcoin Miners?Miners are computers that facilitate Bitcoin transactions.
Miners create new Bitcoins every day as a reward for facilitating transactions.
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 ...
Once there are 21 million--no more will be created.
Who administers Bitcoin?Surprisingly, there is no government that administers Bitcoin.
Is Bitcoin Legal?In the US, bitcoin is legal. In Malta and Venezuela it is not legal.
Is Bitcoin subject to taxes?Yes, Bitcoin is subject to taxes.
About the AuthorCharles 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.
Should I Buy BitcoinMajor companies are investing in the blockchain. However, Bitcoin is not universally accepted. Further, the price of bitcoin is determined solely by speculation. Some have speculated that bitcoin will reach $40,000, but until then it could fluctuate wildly.