Cryptocurrency, a topic that has both the “loyal lovers” and the “passionate haters” and there are also people who don’t have any idea about cryptocurrency. But why so? Let’s make things simple and clear. With this article, you will get to know all about Cryptocurrency; Bitcoin, Dogecoin, etc.
Let’s take an example, Elon, Bill and Warren are friends, they want to buy a donuts but, only Warren has the money, so Elon and Bill promise to pay their part of the money after some days, but for that Warren got their signature on 3 papers and they each kept on one paper, writing the clear note; what amount to be taken from both of them. We know this deal in financial terms; Peer-to-Peer transactions and that is how cryptocurrencies; Bitcoin, Dogecoin, etc works.
Consider this Donut a bitcoin and there are many donuts in the market having different values and principles but they all have the core similarities; all the transactional records are in a decentralized manner, and they have limited supply.
Simply, Cryptocurrency is an electronic currency that can buy goods and services in which “Cryptography” is used with a strong online ledger. Cryptography involves the use of codes for protecting the information between the sender and the receiver. It uses Blockchain technology which is completely decentralized and managed using advanced/smart computers, making complete transparency.
Countries over cryptocurrency’s implications:-
No Central Bank issues or regulates cryptocurrency, instead, the implication and the applicability of cryptocurrency are dependent on the nations’ respective governments. The same can be analyzed when RBI declared that India will soon have its official cryptocurrency and may ban all the other private cryptocurrencies like Bitcoin, Dogecoin, etc.
Countries with a positive approach towards cryptocurrency:-
AMERICA
The United States has taken positive actions towards cryptocurrency but some government agencies are there to prevent the use of Bitcoin and consider it illegal, although some companies like Microsoft, Tesla, and SpaceX welcome Bitcoin payment. The “US Department of Treasury Financial Crimes and Force” has been issuing guidance on Bitcoin since 2013, the treasury has defined Bitcoin as not a currency but a money service business.
CANADA
This country ensures that cryptocurrency transactions do not involve money laundering activities and shows positive stands towards it. This means income generated from bitcoin transactions is business income and the taxation depend on whether the individual has to sell or buy a business or only be concerned with investment.
AUSTRALIA
Similar to Canada, Bitcoin is neither the money nor the foreign currency with the Australian taxation office, rolling it as an asset for capital gains tax purposes in Australia.
Talking about the European Union on October 22, 2015, the European court of justice ruled that buying and selling digital currencies are considered a supply of service and that it exempts them from VAT in the whole European Union.
Finland
The Central Board of taxes has given Bitcoin await exempt status by classifying it as a financial service and this statement means that Bitcoin can be treated as a commodity in Finland but not as a currency.
But with all these implications and adaptability by the countries, doesn’t imply that countries only have a positive view over cryptocurrency; many countries are against it; some of the countries in the list are:-
CHINA
Cryptocurrency is banned here. China strictly prohibited all banks and other financial institutions from the transaction or involvement in these cryptocurrencies. Also, the government has tracked down the miners who used to mine those.
RUSSIA
Like China, it does not regulate cryptocurrency, and it is illegal to use it for transactions.
Countries, and it does not allow for investment.
AnotherLittleThing is that cryptocurrency still does not have the right system; no institution is available for its monitoring and regulation. In this case, governments can set up a regulatory body especially for crypto transactions to make a secure and trustworthy system.
Every advanced technology has its own merits and demerits, but with time these demerits get resolved, and with time merits are evolved with more benefits and features.