Advantages And Disadvantages Of Bitcoin As A Cryptocurrency

Bitcoin is a digital currency which can also be termed as a cryptocurrency. It is a viable mode of transaction, because it can be used for payments and is accepted at multiple avenues, especially online avenues. But the actual property which can be presented as the main characteristic of bitcoin is that it is a decentralized currency which uses a distributed ledger for carrying out financial activities across the world.
The ledger represents a financial record which is updated each time a transaction is performed. This way, the record on each ledger is updated every time that a financial transaction is performed. This ensures that a single digital payment cannot be charged twice and people can easily transfer different sums of money to one
The IRS understood the need for taxing the new cryptocurrency model and now has presented a guideline for implementing federal taxes on virtual currency funds. According to IRS, cryptocurrencies such as bitcoin can be presented as holding trading or business value, which should be treated as self employment when looking to analyze funds for taxation requirements.
It can be difficult to implement income tax on the bitcoins that are mined by a person or even by an organization. However, income tax applies on all kinds of payments that you receive against your services or tangible property. This means that in most jurisdictions, you have to legally report your bitcoins as income on which you are willing to pay taxes. The taxation authorities currently do not have the means to catch you for a few bitcoin transactions, but it is not advised to avoid these records from the IRS.
In most cases, the current ruling is that bitcoins should be a subject to self employment tax. On the other hand, it is possible in some states to record the income that you have made with your bitcoin transactions, but you have to pay capital gain tax on your