WebProNews

Tag: bitcoin value

  • IRS: Bitcoins Are Property And Absolutely Taxable

    IRS: Bitcoins Are Property And Absolutely Taxable

    Good news and bad news has just come down the pipe courtesy of the IRS. The good news? Bitcoins have received a huge boost in terms of U.S. government recognition. The bad news? If you were hoping to invest in Bitcoins for the purpose of evading taxation…it’s a no-go.

    The IRS announced on Tuesday that they will treat the virtual currency as property for the purposes of taxation.

    Ajay Vinze, the associate dean at Arizona State University’s business school thinks that the announcement is good for the Bitcoin.

    Vinze said, “[The Bitcoin is] getting legitimacy, which it didn’t have previously.”

    He also feels that this is one act by the United States government that can help put the currency “on a track to becoming a true financial asset.”

    This doesn’t stop the announcement from being a headache for many American advocates of the Bitcoin. It’s thought of by many a currency rather than as property.

    There is some worry that the “clarification” may do more harm than good. If Bitcoins are not only unstable, but taxable property, does this make them not worth the risk?

    Pamir Gelenbe, is a partner at Hummingbird Ventures. The venture capital firm recently invested in online Bitcoin exchange Kraken.

    Gelenbe understands that many who have gotten their hands on Bitcoins may be less inclined to spend them following the IRS’s decision.

    “People might just be tempted to hoard rather than spend, because as soon as they spend they would be liable to incur capital gains taxes,” said Gelenbe.

    The IRS not only expects taxes on capital gains. The government agency is also demanding that “miners”, persons responsible for introducing new Bitcoins into the market via unique algorithms, report the Bitcoins as part of their income.

    The guidelines being set by the IRS may feel like growing pains, but growth and stability is what is needed if the Bitcoin is to maintain its global presence.

    Image via Wikimedia Commons

  • Bitcoin Creator Possibly Found. Anyone Care?

    Bitcoin Creator Possibly Found. Anyone Care?

    If anyone was anticipating a major furor over the creator of Bitcoins being discovered, they’re no doubt disappointed.

    As of now a Japanese American known by the alias Satoshi Nakamoto is thought to be the creator of the digital currency. He was reportedly found in Southern California where he presently resides.

    The man denied any and all involvement with the creation of Bitcoins to the Associated Press. Either the wrong man was credited with the currency’s creation or for some reason the “Father” of Bitcoins wishes to remain unknown. Some speculate the reason for his adamant denials are tax-related.

    Regardless of the man’s story, numerous sources insist that his discovery is largely irrelevant. The survival of the Bitcoin is said to rest in the many hands of the persons responsible for its creation and maintenance.

    By all accounts…not exactly a smooth ride so far given the recent scandals and theft

    Despite ongoing troubles, some continue to throw their full support behind the Bitcoin, including the Winklevoss Twins. A few days ago the capitalist brothers made headlines when they used an estimated $500,000 worth of the currency to purchase tickets for a flight into space.

    Though owning the coins has worked out well for some, others have have been so unfortunate as to watch their money vanish.

    Those who have thus far held onto their money may soon find that their previously unregulated cash stash is highly taxable. Despite Japan not recognizing the Bitcoin as a currency, there is talk of taxing it.

    With the Bitcoin’s ongoing struggle for legitimacy, it’s no wonder that no one really has time to stand around in awe and admire the man who allegedly gifted the world with the Bitcoin.

    Gregory Maxwell, a core developer of the Bitcoin, said, “If the creator of bitcoin mattered to our ability to use it, then bitcoin has failed in its technological goals”.

    Image via Wikimedia Commons

  • Bitcoin Exchange Giant Vanishes; Is the End Near?

    Bitcoin Exchange Giant Vanishes; Is the End Near?

    Bitcoin trader Kolin Burgress is not happy with Mt. Gox. The London-native hopped a plane and headed all the way to Tokyo, Japan to let the Bitcoin exchange giant know how he felt about losing $320,000 worth of the currency.

    “I may have lost all of my money,” said Burgess. He had been picketing the building since February 14th, demanding answers.

    “It hasn’t shaken my trust in Bitcoin, but it has shaken my trust in bitcoin exchanges.”

    There is plenty of reason at present to have one’s trust in Mt. Gox shaken. The company has yet to explain or resolve a massive security glitch that lead the organization to freeze member accounts. Mt. Gox is now blaming the security flaw for the theft of about 740,000 Bitcoins.

    The alleged value of the stolen currency is said to be around $350 million. It’s hard to put an exact value on the missing money as the currency remains unstable, prone to fluctuation as speculators worry. As questions arise over the safety and legitimacy of Bitcoins, the value continues to drop. The value of a Bitcoin fell from $550 to $470 in recent hours.

    Mt. Gox’s website remained down as of Tuesday with no signs of returning any time soon. It went dark on Sunday, following the resignation of CEO Mark Karpeles from the board of the Bitcoin Foundation. With the group is seeking to have Bitcoins recognized as a legitimate form of currency, the scandal is a serious blow to their cause.

    Since Mt. Cox’s major blunder, several exchanges and pro-Bitcoin organizations came together to release a joint statement to the public, saying they have every intent to “re-establish the trust squandered” by Mt. Gox.

    How this will be done is unknown, as s latest incident has served to undermine the claim that the Bitcoin is far more secure than existing established currencies.

    Image via Wikimedia Commons

  • Bitcoin Value Drops And Bounces Back

    Bitcoin Value Drops And Bounces Back

    Bitcoin values dropped 20% in just 3 hours after the online drug enterprise, Silk Road was shut down and had its domain seized. Silk Road’s founder, Ross William Ulbricht was arrested on Tuesday and the site was seized by the FBI just hours later.

    Silk Road used Bitcoin as its only form of currency so it is easy to see how the service could take such a big hit during the shutdown. Although the shutdown is the likely cause of the major drop, there could be other reasons behind it too. Bitcoin has seen its value drop before, once in October 2011 and as recent as April 2013.

    Luckily for the company, the drop was only temporary. During the shutdown of Silk Road, the Bitcoin value dropped from $140 to $109 on the Mt. Gox exchange. As of Thursday morning it was back up to $128 and rising.

    Patrick Muck, the Bitcoin Foundation lawyer said, “Over time the value of Bitcoin will be determined by its useful purposes. Day to day price fluctuations based on events in the news are not really an effective or accurate measure of the value of the system.”

    The Silk Road was used to buy and sell a number of illegal items such as drugs and stolen credit card information. Over a million accounts were registered on the site and each one had a Bitcoin account that was used to fund their purchases or process payments. For the month of September, there were over 13,000 listings for “controlled substances”.

    Image from Wikimedia Commons.