Cryptocurrencies are on the rise in Greece. Credit: Public Domain

In the past couple of years, cryptocurrency has invaded Greeces society, mostly because of high taxation and the pandemic. While the average Greek might not know what bitcoin means, interest in its mining has risen significantly.

In Greece, an estimated double-digit percentage of the population are into cryptocurrency trading in various platforms. Mining, on the other hand, is a much more expensive and energy-consuming business for Greek individuals.

The cost of cryptocurrency mining equipment and the rising costs of electricity in Greece make crypto mining a prohibitive task for Greek citizens, says civil engineer and entrepreneur Georgios Nolis. Big business, on the other hand, could attempt it with much greater ease.

Cryptocurrency is a form of digital money, completely decentralized and out of the reach of banks and national governments. It is recorded in a sort of digital catalog, and its maintenance demands huge amounts of electricity.

Mining is a process through which computers are being asked to solve extremely difficult mathematical riddles. These riddles demand top-notch computer equipment, thus even higher than usual amounts of electricity.

As an example, in order to maintain bitcoins cryptocurrency mining system, it would need the yearly electricity consumption of the nation of Finland. As a result, cryptocurrency mining is unreachable for even an upper-middle-class EU citizen and this is even more true in Greece.

There is no methodology to measure the number of people or companies mining cryptocurrency in Greece, says Nolis, the CEO of Lancom Ltd, a data collection and cloud service provider based in Thessaloniki.

Cryptocurrency mining is as anonymous as the currencies themselves, he says. I am personally aware of a handful of miners in Greece who are amateurs. They are investing in between 1 and 10 mining rigs, the equipment needed for mining, he adds.

There are even fewer Greeks who own so-called cryptocurrency mining farms and all of them are outside the country, mostly due to electricity costs. Professional miners usually employ a group of people to maintain and increase their investment. They utilize huge computers on a 24/7 basis.

And yet, last May, Bitcoin.com reported that the interest in cryptocurrency from women in Greece had grown 163.67%. This was the highest percentage in Europe, according to this particular study. The number of Bitcoin ATMs in Greece also increased to at least five around the country in 2020.

Cryptocurrency mining is very expensive. An Ethereum cryptocurrency mining rig would require computer equipment costing close to 20,000. It consumes 4,800 watts, which means it would cost around 1,000 worth of electricity per month in Greece.

Ethereums average cost at 2,000 means that a miner can mine 65% of one cryptocurrency coin in 30 days. That is worth 1,600, which allows for a net monthly profit of 600 after electricity expenses in Greece.

Miners are usually paid by a so-called Proof of Work, verified by a transactions verification from a blockchain cryptocurrency network, like Ethereum. In other words, they are being compensated for their computer power and being paid in cryptocurrency.

Their fee goes into a digital wallet, where each miner can grow his share of cryptocurrency in Greece. If they want to collect real money, they have to sign up to a digital exchange office and change them into dollars, euros, or any other conventional currency.

Crypto gains can only be taxed if they get into the banking system. Once they are turned into Euros, and enter an account, the Greek state taxes them at the usual 22%.

For companies who own cryptocurrency accounts, the only way to avoid taxation is to exchange them with products that accept crypto payments. If cryptocurrency mining and use rises the way it has in the past two years, a source of unregulated, non-taxed transactions might become part of the financial norm.

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All You Needed to Know About Cryptocurrency in Greece - Greek Reporter

Slatestone Wealth's Chief Market Strategist Kenny Polcari reacts to Chinas central bank declaring all transactions involving Bitcoin and other virtual currencies illegal.

Tesla CEO Elon Musk said on Tuesday that governments should stay out of regulating the cryptocurrency market.

"It is not possible to, I think, destroy crypto," Musk told New York Times columnist Kara Swisher during the Code Conference in Beverly Hills, California. "But it is possible for governments to slow down its advancement."

Instead, he believes that regulators should simply "do nothing" and "just let it fly."

BITCOIN MINERS EYE NUCLEAR POWER AS ENVIRONMENTAL CRITICISM MOUNTS

His comments come as the chairman of the Securities and Exchange Commission, Gary Gensler, has referred to cryptocurrencies as the "Wild West" of digital assets and has pushed for greater regulation in the United States. Meanwhile, China launched its own crypto crackdown last week, declaring all transactions and mining activities in the country illegal.

Musk weighed in on China's ban, noting that part of it likely has to do with the country's "significant electricity generation issues."

"A lot of South China is having random power outages because the power demand is higher than expected," he explained. "Crypto mining might be playing a role in that."

Musk himself warned of the "insane" electricity consumption of Bitcoin mining earlier this year, and reversed course on accepting the world's largest cryptocurrency as an alternative form of payment for Tesla vehicles due to its heavy dependance on fossil fuels. However, the electric vehicle maker still holds Bitcoin on its balance sheet after purchasing $1.5 billion worth of it in February.

In addition to China's potential concerns about its energy consumption and environmental impact, Musk said that cryptocurrency is "fundamentally aimed at reducing the power of a centralized government" and that the Chinese "don't like that."

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Looking ahead, Musk expressed hope that the cryptocurrencies could help reduce "error and latency" in the financial system, but emphasized that he wouldn't call himself a "massive cryptocurrency expert."

"I think theres some value to cryptocurrency," Musk said. "I dont think its the second coming of the messiah, which they all seem to think."

As of the time of publication on Wednesday, the cryptocurrency market is trading higher, with Bitcoin currently around $42,000 per coin and rivals Ethereum and Dogecoin around $2,900 and 20 cents per coin, respectively, according to real-time price tracking by Coindesk.

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Elon Musk says cryptocurrency regulators should 'do nothing' and 'let it fly' - Fox Business

While the rest of the crypto market struggled to decide its direction, the decentralised blockchain platform was knocked off its perch by Tether, the largest stablecoin in the world, on September 29.

This time around, even the slew of new partnerships announced by the platform barely two days ago, were not enough to shelter Cardano from the pressures of the global crypto market, which has settled into a slump.

"[It is an] autonomous bank that buys and sells stablecoins for a price in a range

Cardano founder, Charles Hoskinson, describes Djed in its whitepaper published in August 2021

Just like Google has the Play Store for Android Apps and Apple has the App Store, the Plutus dApp Store is where users will be able to download applications that are powered by Cardano.

And, if all this wasnt enough, the commercial and venture capital arm of the cryptocurrency, Emrugo, announced $100 million in fresh funding to further develop the Cardano ecosystem.

The higher the market cap of a particular digital asset, the more dominant it is considered to be in the global market. The more dominant it is, the more likely it is to weather the tides of time in the volatile environment that is cryptocurrencies.

The crypto market initially shrugged off Chinas proclamations as just another scare tactic. However, big wig companies did not have the same reaction.

The biggest crypto exchanges in the world, Binance and Huobi, announced they will no longer be accepting new registrations from users based out of China. Sparkpool, the second largest mining pool in the world for Ethereum, will be shutting down operations in less than 24 hours. And, Alibaba Chinas e-commerce giant announced it will no longer be selling mining equipment.

SEE ALSO:Keeping your cryptocurrency safe 12 ways to keep hackers, scammers and fraudsters at bay

Alibaba, Binance, Sparkpool and other companies are scrambling to avoid any heat from China over crypto concerns

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Cardano is no longer the worlds third largest cryptocurrency - Business Insider India

The government plans to compartmentalize virtual currencies and their tax based on their use

The rapid rise of cryptocurrency in India has opened up several business and income opportunities for a number of people. Some people are interested in quickly creating wealth by directly trading in the popular, and sometimes high-yield, coins, while others are creating ways to accept them as payments at restaurants and online shops. There are also some who may have gained cryptocurrency through mining. However, there is some confusion about how the government may tax these incomes or how an individual or institution should declare them. The move by authorities to first ban and then allow trading in virtual coins has only added to the confusion.

In 2018, the Reserve Bank of India banned banks and other financial institutions from facilitating transactions in cryptocurrency like Bitcoin, Ethereum, Dogecoin, and others. Later, in early 2020, the Supreme Court reversed the order, allowing trading of these virtual coins. Still, they have not yet received the status of a legal tender in India. The RBI has said it is working on its own cryptocurrency and will proceed with caution, keeping in mind the disruption this new form of currency may cause to the existing financial order.

Despite all that, you will have to pay taxes on these incomes. The confusion is whether to declare them as capital gains or in any other source.

The government plans to compartmentalize virtual currencies and their tax based on their use, be it investments, payments, or utility.

The government has already made it mandatory for companies dealing with virtual currencies to disclose profit or loss incurred on transactions. It also asked them to disclose the amount of cryptocurrency they hold in their balance sheets. But this has not yet brought the taxability laws to govern their transactions. Still, the income tax laws have always sought to tax income received irrespective of how it was received.

So there are primarily four scenarios of income from cryptocurrency.

1.Mining

Mined cryptocurrencies are self-generated capital assets. Subsequent sale of such bitcoins would usually give rise to capital gains.

2. Transferred in exchange for real currency

The appreciation in the value of cryptocurrency held as an investment may classify as a long-term capital gain or a short-term capital gain depending on how long the asset has been held.

3. Income from trading activity

The income from trading crypto coins would constitute income from business and hence the profit can be taxed as applicable tax slabs.

4. Received on sale of goods and services

These cryptocurrency gains can be treated on a par with receipt of money. So the recipient would be taxed under the head profits or gains from business or profession.

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Do You Need To Pay Income Tax On Gains From Cryptocurrency? - NDTV Profit

Europe is now the world's biggest cryptocurrency economy, with the continent receiving over 870 billion in crypto in the past year.

Countries in central, northern and western Europe (CNWE) accounted for 25 per cent of all global cryptocurrency activity, new analysis by blockchain data firm Chainalysis found.

The United Kingdom saw the largest volume of cryptocurrency trading in the CNWE region, at around 145 billion. The UK was followed by France, Germany, the Netherlands and Spain.

At the same time as crypto transaction volumes in Europe began to increase in mid-2020, volumes in East Asia - the previous world cryptocurrency capital by transactions - entered a steep decline.

According to Chainalysis, Europe's growth was largely driven by so-called "whales", large institutional investors shifting enormous sums of cryptocurrency.

"CNWEs cryptocurrency economy began growing faster in July 2020. At this time, we saw a huge increase in large institutional-sized transactions, meaning transfers above $10 million (8.5 million) worth of cryptocurrency," the Chainalysis report said.

The firm's data shows how significant that growth has been. In July 2020, large institutional transfers totalled around 1.2 billion. By June 2021, that figure had ballooned to 39.6 billion, at which point the whales accounted for over half of all crypto transfer volume in the CNWE region.

The majority of large institutional transactions in Europe went to DeFi, or "decentralised finance" platforms, the report found.

DeFi platforms have been embraced by large investors as they offer ways to stake cryptocurrencies, essentially allowing long-term holders to make money from interest payments by lending their cryptocurrency to DeFi protocols.

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Europe is now the world's cryptocurrency capital as China's Bitcoin bans start to bite - Euronews