Getting to know the technology

Those who follow the technology that is related to CryptoCurrencies are convinced that the technology of blockchain will change the world and remain with us forever. Its significance is often compared to that of the internet itself - the technology, they say, will provide and endless number of second layer applications that use the network of Bitcoin. In the early days, the internet was thought to be the same as e-mail only; now, of course, we know that it was the foundation of solutions that turned our previous world and economy upside down.

In order to buy CryptoCurrency, you need to, at least on a basic level, become familar with how the stock exchange works and what the roles of the brokers are. Unless you have someone you trust with up-to-date, working knowledge of this topic, you should take the time and get to know this topic as well in order to use it successfully.

Since this is a new area, many frauds try to make money on people gullibility and greed. It is essential to be able to differentiate between a legitimate crypto-project and a simple con. Therefore, we need to know some basic concepts and be able to use the tools that rank CryptoCurrencies according to their different features. Also, you need to recognize when someone wants to scam you before investing in a project. If the people that want to do business with you are rarely available and you find no information on them, their introductory materials are full of empty phrases without any substance.

While this is not closely related to the technology itself, this may be one of the most crucial elements of your knowledge. When do people buy? When do they sell? What is it like when the market panics, how do you recognize when it is happening?

Does who have prior experience with stock exchange definitely have and advantage - no wonder that many veterans of the exchange switched to dealing with CryptoCurrencies in the past years. Also, it is worth mentioning that although CryptoCurrencies and the way the move have many common features with the classic stock exchange, dealing with CryptoCurrency is still a completely new are and it is hard to see in advance what will happen in a few years' time.

The first time people buy Bitcoin they usually do it with the aim of leaving their investment alone for a couple of years. They later realize, that no matter where the market moves, they can't not deal with their investment, since more often than not, they put more into it than they should have. Basically, you should never put more into it than what you don't care if you lose, without getting worked up about it.

You can buy CryptoCurrencies from different platforms, brokers and exchanges. You can store them in a specialized electronic wallets or on paper. - we are dealing with how to buy and store them later.

Using the shifting of the exchange rates, most beginners start with this area with altcoins (everything other than Bitcoin). Due to the (seemingly) easy profit, they jump into different deals without thinking them over. Trading goes through CryptoCurrency exchanges like the traditional Forex platform, but we trade with CryptoCurrency instead of USD or EUR. Some exchanges allow you to trade with USD as well, like Kraken. Getting profit from the shifting of exchange ratio is an interesting question - our portfolio might shrink in dollar value, but grow in BTC.

When you decide to buy CryptoCurrencies, you need to create an account on a site that makes buying and selling them possible. Whether its a simple broker or a stock exchange, due to security concerns you will need to go through a somewhat thorough authentication procedure. There are pages where you only need an email address, but on other sites (like, e.g., Coinbase) you may need one of the following:

If they require a photo that is older than six month, they usually provide the means to take a photo with your computer's webcam.

It is important to adhere to the security measures of the site and use two-factor authentication (2FA). You'll get a code in text message to your phone when you want to login to the site. Your login will only be successful if you provide the right code.

If you already have access to the exchange or broker, you need to select which CryptoCurrency you want to buy from. As a rule of thumb, you should buy when it is low or going down and not when it is high or rising. Choosing the CryptoCurrency you want to buy is always a complex process, so you need to decide first whether you are in for the long run or want to trade. If you want to trade, you'll need to dive into the specifics of trading.

If you "only" wish to buy it and at some point in the future, sell it, and realize some profit, you need to examine the following.

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Beginner's Guide | CryptoCurrency.org

Crypto is the best invention of this century. It came into existence when bitcoin was launched in the market. The initial benefit you can grab by capitalizing on this crypto is its blockchain. Blockchain technology is the best one that doesn't have any authority over its head to control it. You will be happy to hear that the cryptocurrency network is p2p which means that people can easily transact their money any time of the day. There are plentiful benefits of cryptocurrency, and people are getting all these benefits by using them for transactions, trading, and long-term investing purposes at the bit bolt .

Effortless transactions!

One can carry out the transactions of crypto quickly. The fantastic thing about the bitcoin transaction is its lower cost. Yes, even if you make more private transactions, you also don't need to pay high transaction costs. With the help of a simple app or website, or hardware bitcoin wallet, any individual can make transfers and receive payments in different kinds of cryptos. Some of the best types of crypto comprise bitcoin, Ethereum, Litecoin, etc., even if you want to cash out your crypto holding; it is also effortless and straightforward using the bitcoin ATM. You can buy bitcoin from the ATM with traditional money. The people who have a shortage of financial system access can use cryptocurrencies because they only require internet and smart device.

High-class security!

We all know that crypto transactions are in the form of cryptography, and with the security of blockchain, cryptocurrency transfers are the safest form of making payments. It can be one of the most practical benefits you can grab by investing in cryptocurrency. It would be best if you heard that the security of crypto is committed in the higher part by using the hash rate. When the hash rate is higher, it needs high computing power for compromising the entire blockchain network. The hash rate of bitcoin is highest among other cryptos making it the most secure crypto worldwide. It is also essential that using the bitcoin exchange is also secure if you select the reliable and reputable one.

Quick settlement!

Many people want to invest in cryptocurrency only because of its higher value, but others want to get the advantage of using crypto for making the exchange. You will be impressed to know that the bitcoin transaction is a meager cost because the intermediary has no involvement. Moreover, with the transfers of most cryptocurrencies, one can quickly settle in just a few minutes. However, when you choose the wire transfers of the banks, then it can cost you a high amount of money, and it might take around 3 to 5 days for the settlement. So using bitcoin is the best option you have on your list.

Entirely private transfers!

Privacy is the most probable reason for the increasing fame of bitcoins. Well, the thing is that this ledger only signifies the wallet's address and not the person's identity. So it means that no other person can get to know who is making the transactions. There is no doubt that most of the transfers of the cryptos are pseudonymous, but still, there are many ways available for making the transaction more anonymous. You can learn about these ways and make your bitcoin transaction fully anonymous with little or no hassle.

Easy cross-border payments!

The surprising thing about crypto is that there is no reputation of the borders. A person in one country can easily send crypto to someone living in another country without difficulty. With the traditional modes of payments making the international border, payments were quite a hassle. You have to go through a lot of paperwork and wait for plenty of days to settle the transactions. Moreover, the bank charges a hefty fee for making foreign transfers. But with cryptocurrency, you are free. You can make a transaction in any part of the world without getting permission from any entity. The impressive thing is cryptocurrency markets are open 24 hours a day and seven days a week without having any exception. So it is the best option available right now, and you should get these benefits by investing in crypto now.

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Learn About The Best Benefits Of Cryptocurrency That You Can Grab Anytime! - The Dubrovnik Times

Aarika Rhodes, an elementary school teacher mounting a left-leaning primary challenge against California Democrat Brad Sherman, the most prominent critic of cryptocurrency in the House, is promoting the technology in her run. She said she has taken several thousand dollars worth of donations in cryptocurrency to date, having embraced it after talking to voters and hearing from crypto advocates who urged her to draw a distinction with Sherman on the issue.

More and more people of color, women, single moms are looking into Bitcoin, the largest cryptocurrency, Rhodes said. I never met anyone who was against it.

Roughly one in six Americans have personally traded, used or invested in cryptocurrency, according to Pew Research Center, including 13 percent of white, 18 percent of Black, 21 percent of Hispanic and 23 percent of Asian Americans.

So far, the political incentives around cryptocurrency are proving lopsided. More candidates have found reason to embrace a technology backed by legions of devoted users, a fresh crop of newly rich donors, and a growing number of lobbyists, than to vocally reject it.

Look, it just seems cool. Everybodys got a friend whos made some money on it. Theres a lobbyist who wants to take me to lunch, said Sherman, who has called for banning cryptocurrency outright, of the hype that has made it popular with his colleagues on the Hill. Shunning the technology, on the other hand, has brought the congressman few immediate rewards. In addition to facing a crypto-fueled primary challenge, he has inspired the creation of a new super PAC, Shut Down Sherman, dedicated to taking down Enemy Number 1 to Crypto.

Sherman bemoaned a lack of political interest in what he sees as the emerging threats from crypto, such as its potential to undermine U.S.-imposed financial sanctions and the U.S. dollars status as the global reserve currency.

That is worth hundreds of billions of dollars to American families, and theres no lobbyist in this city that protects it, he said. No lobbyist is fighting for the ability to go after criminals with sanctions.

Ron Hammond, director of government relations at the Blockchain Association and an advisor to the pro-crypto HODL PAC, said that rather than fielding concerns about crypto, he is more likely to receive requests for advice. Congressional staffers from both parties want help, he said, drafting pro-crypto tweets for their bosses, who see that the subject can generate frenzied social media engagement.

The website for the Congressional Blockchain Caucus, which was formed to foster the accounting technology underlying cryptocurrency, lists 18 Republican and 17 Democratic lawmakers. Sherman, though, is not alone in taking a hard line on the crypto boom.

Brock Pierce, a former child actor turned crypto entrepreneur, is exploring a run for the Vermont Senate seat being vacated by Democrat Patrick Leahy. | (Photo: Business Wire)

Massachusetts Sen. Elizabeth Warren has called for Congress to do more to regulate the industry. She is also among the Democrats calling for a crackdown on the carbon emissions associated with some cryptocurrencies, like Bitcoin, which relies on vast numbers of specialized computers competing to solve mathematical puzzles as part of an energy-intensive process that secures its network.

Hillary Clinton and Donald Trump have both spoken out against cryptocurrency on account of its potential to undermine the dollars global dominance.

In June, Trump likened Bitcoin to a scam, telling Fox Business Network, "The currency of this world should be the dollar. And I don't think we should have all of the Bitcoins of the world out there. I think they should regulate them very, very high."

Younger politicians are less likely to prioritize such concerns. I dont know a single Republican under the age of 50 whos critical of crypto, said Hammond, who previously worked for Republican Rep. Warren Davidson of Ohio. Hammond said that some older members of the party quietly oppose cryptocurrency adoption but have hesitated to express public opposition.

The technology has even split the Trump family along generational lines. Former first lady Melania Trump, 51, posted a tweet this month in honor of Bitcoins 13th birthday, as she launches her own line of non-fungible tokens, digital collectibles that rely on the same blockchain technology that enables cryptocurrencies.

While those who deal on the world stage are more likely to see crypto as a threat to the U.S.-led global financial order, many mayors like Eric Adams of New York and Francis Suarez of Miami have embraced crypto as a way to attract attention, and potentially jobs, to their cities.

The technology is also inspiring candidates who have made money from it to mount crypto-themed runs for office. In Oregons newly created 6th District, Matt West, a DeFi or decentralized finance, a new form of lending enabled by blockchain technology developer, is running as a pro-crypto Democrat. On the heels of a quixotic independent presidential bid, Brock Pierce, a former child actor turned crypto entrepreneur, is exploring a run for the Vermont Senate seat being vacated by Democrat Patrick Leahy.

As the total value of cryptocurrencies has exploded to more than $2 trillion in recent years, those made rich by the boom have begun to throw their weight around as donors, too. Last year, the second-largest individual donor to Joe Bidens presidential election efforts was Sam Bankman-Fried, the 29-year-old founder of cryptocurrency exchange FTX. Bankman-Fried gave more than $5 million but evinced little interest in scoring a meeting with the beneficiary of his largesse.

As Congress and the Biden administration begin to grapple in earnest with the implications of cryptocurrency on a range of policy fronts, crypto donors are becoming more strategic. On New Years Eve, Jesse Powell, the CEO of Kraken, another exchange, issued a public call for lists of candidates who support cryptocurrency and of crypto enemies. The next day, he announced he had made maximum allowable contributions to 15 politicians, including Rhodes, Mandel and West.

Sam Cooper, a former deputy chief of staff to pro-crypto Sen. Ted Cruz who now advises crypto clients in the private sector, said donors are still getting their bearings this cycle, before what he anticipates will be a more organized effort in the next presidential election.

By then, Cooper said he expects crypto will have gone from a niche issue to a campaign trail staple. Will Bitcoin become a core issue in 2022? No. Its going to be inflation and immigration and the things we see everyday, he said. But I do expect in 2024, especially on the Republican side, that this will be an issue.

Ben Schreckinger covers tech, finance and politics for POLITICO; he is an investor in cryptocurrency.

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Bitcoin crashes the midterms - POLITICO

A streamlined tax regime is pivotal to a clear, constructive and adaptive regulatory environment

Notwithstanding the eventual introduction of the Cryptocurrency and Regulation of Official Digital Currency Bill in Parliament, cryptocurrencies continue to proliferate. In fact, a liberal estimate suggests that as many as 10 crore Indians may already have investments exceeding a total of $10 million in them. This not only creates an avenue for generation of tax revenue for the nation but also puts forth a Herculean challenge for the tax authorities who have to track and tax transactions involving cryptocurrencies.

Although the Income Tax Act, 1961 (IT Act) does not specifically mention cryptocurrencies, it does cast a wide enough net to bring crypto transactions under its ambit. Trading in cryptocurrency may be classified as transfer of a capital asset, taxable under the head capital gains. However, if such cryptocurrencies are held as stock-in trade and the taxpayer is trading in them frequently, the same will attract tax under the head business income. Even if one argues that crypto transactions do not fall under the above heads, Section 56 of the IT Act shall come into play, making them taxable under the head Other sources of income.

However, this in itself is not sufficient in order to put in place a simple yet effective taxation regime for cryptocurrencies. Since cryptocurrencies are unlike any other asset class, stored and traded virtually, there are varied challenges which need to be addressed in order to streamline the process of taxing crypto transactions.

First, the absence of explicit tax provisions has led to uncertainty and varied interpretations being adopted in relation to mode of computation, applicable tax head and tax rates, loss and carry forward, etc. For instance, the head of income under which trading of self generated cryptocurrency (currencies which are created by mining, acquired by air drop, etc.) is to be taxed is unclear. If these are taxed under capital gains, what should be taken as the cost of acquisition for the purpose of computation? If the acquisition cost is to be taken as the fair market value of the said cryptocurrency as on date of generation, how does one arrive at this value? Since there is no consistency in the rates provided by the crypto-exchanges, it is difficult to arrive at a fair market value. Conversely, there are divergent views in the market treating such an income as business income or other sources of income, which are taxable at individual tax rate slabs (which may be higher than those applicable to capital gains). Similarly, when a person receives cryptocurrency as payment for rendering goods or services, how should one arrive at the value of the said currency and how should such a transaction be taxed?

Second, it is often tricky to identify the tax jurisdiction for crypto transactions as taxpayers may have engaged in multiple transfers across various countries and the cryptocurrencies may have been stored in online wallets, on servers outside India. In such cases, it becomes difficult to pinpoint which jurisdictions tax laws would become applicable and what kind of tax treatment would be effected especially in light of various nations having differing tax treatment for crypto assets including imposition of a general ban on them.

Third, the identities of taxpayers who transact with cryptocurrencies remain anonymous. Each crypto address comprises a string of alphanumeric characters and not the persons real identity, giving tax evaders a cloak of invisibility. Exploiting this, tax evaders have been using crypto transactions to park their black money abroad and fund criminal activities, terrorism, etc.

Fourth, the lack of third party information on crypto transactions makes it difficult to scrutinise and identify instances of tax evasion. One of the most efficient enforcement tools in the hands of Income Tax Department is CASS or computer aided scrutiny selection of assessments, where returns of taxpayers are selected inter alia based on information gathered from third party intermediaries such as banks. However, crypto-market intermediaries like the exchanges, wallet providers, network operators, miners, administrators are unregulated and collecting information from them is very difficult. Another consequence of this lack of information is that the tax authorities are left with hardly any tools to verify any crypto transactions which do get reported. They are instead forced to fully depend on the data provided by the taxpayers.

Fifth, even if the crypto-market intermediaries are regulated and follow Know Your Customer (KYC) norms, there remains a scenario, where physical cash or other goods/services may change hands in return for cryptocurrencies. Such transactions are hard to trace and only voluntary disclosures from the parties involved or a search/survey operation may reveal the tax evaders.

While the aforementioned challenges provide enough food for thought to policymakers, certain steps can be taken to provide a robust mechanism for taxing crypto transactions going forward.

To begin with, the income-tax laws pertaining to the crypto transactions need to be made clear by incorporating detailed statutory provisions. These could include provision of a definition for crypto assets for tax purposes and guidelines addressing the major taxable events and income forms associated with virtual currencies. This should be followed by extensive awareness generation among the taxpayers regarding the same.

The practice of having separate mandatory disclosure requirements in tax returns (as is the case in the United States) should be placed on the taxpayers as well as all the intermediaries involved, so that crypto transactions do not go unreported. Additionally, the existing international legal framework for exchange of information should be strengthened to enable collecting and sharing of information on crypto-transactions. This will go a long way in linking the digital profiles of cryptocurrency holders with their real identities.

Furthermore, the Government must impart training to its officers in blockchain technology. In this regard, it may be noted that the United Nations Office on Drugs and Crimes Cybercrime and Anti-Money Laundering Section (UNODC CMLS) has developed a unique cryptocurrency training module, which can aid in equipping tax officers with requisite understanding of the underlying technologies. Tax authorities should also equip themselves with the latest forensic software (such as Elliptic Forensics Software is being used by the USA Internal Revenue Service and GraphSense used in the European Union) which can analyse a high volume of crypto transactions at a time and raise red flags in cases of suspicious transactions.

It is certain that cryptocurrencies are here to stay. A streamlined tax regime will be essential in the formulation of a clear, constructive and adaptive regulatory environment for cryptocurrencies.

Aastha Suman is in the Indian Revenue Service, posted as Deputy Commissioner of Income Tax, Karnataka and Goa. Ishaan Sharma is in the Indian Railway Accounts Service, posted as Divisional Finance Manager, Bengaluru Division, South Western Railways. The views expressed are personal

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Taxing cryptocurrency transactions - The Hindu