Inside The World Of Cryptocurrency

Inside The World of Cryptocurrency

Cryptocurrency took the world by storm. You probably have an idea of what this financial product is all about.

It has advantages and disadvantages; you must be a savvy investor if you don't want incredible losses.

It's an exciting opportunity that can make you lots of money. The truth is cryptocurrency has been here for years now. But it's not until recently that people started paying attention. However, if you are new to the world of cryptocurrencies, it's okay to be a little confused.

Here are some of the things you need to know.

So, What Is Cryptocurrency?

In the simplest terms, cryptocurrency is virtual or digital money. The virtual currency is secured by cryptography, which is nearly impossible to double-spend or counterfeit. A central authority doesn't issue them.

That makes them immune to manipulation or government interference. It exists in a digital wallet. You will be lucky to find an accountant Central Coast who understands the currency well to explain it to you in detail.

Why Is It So Volatile, You Ask? Supply and demand make the currency so unpredictable and liable to change rapidly. For example, Bitcoin had 21 million coins when first created in 2009. Right now, there are around 18 million coins in circulation across the world. That makes the demand for Bitcoin very high while the supply is limited. An accountant Central Coast and other investors are always aware of the numbers.

You have to do the same if you are interested in cryptocurrency.

Remember, cryptocurrency is largely unregulated. That makes it unstable; it can rise and fall in value at any time.

It makes it an undesirable investment at times when you

consider such things. A few years ago, a coin was worth cents, while today, it goes for $ 46,000.

As more and more platforms start to accept cryptocurrency, it makes it easy for the everyday shopper. It makes more people interested in how the currency works. But it's always best to talk to your accountant Central Coast, before you make drastic decisions.

But What about Tax? At Oracle, we see hundreds of seasoned and would-be investors dabbling in cryptocurrency every year. ATO has always been on these investors about tax payable on their potential gains. You should be aware of Capital Gain Tax (CGT). It happens when you dispose of the cryptocurrency and make a loss or gain from it.

If you make gains, you will be subjected to tax when that time of the year finally rolls around. If you hold on to the crypto for more than a year, you will have a discount on the gains. Crypto tax is not the same as what you would pay on an investment property.

However, CGT on crypto is complicated; most people just pay because they don't understand the rules. Your accountant Central Coast can help you understand the taxes better. Also, ATO keeps tabs on your crypto trades

using a data-matching technology. It may not be as invisible as you think; you better get your tax implications right before landing in trouble.

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