What makes Bitcoin different from other currencies
decentralization
All kinds of currencies around the world, with the exception of cryptocurrencies, are in some way related to government power. All transactions go through the bank, you pay a fair amount of fees, and when you send money, it takes a lot of time to get to the sender.
On the other hand, in Bitcoin, nobody controls it. As a decentralized network, it works through the cooperation and communication of all who participate in it. For that reason, even if parts of the network are not working, transactions can still be made normally.
counterfeiting is impossible
Bitcoin is designed to be non-counterfeiting. The transaction validity of BTC is guaranteed through blockchain technology and various defense mechanisms inherent in its algorithms.
Most traditional currencies are extremely vulnerable to counterfeiting, and monetary authorities do little to prevent counterfeiting.
durability
Bitcoin does not exist in real form and therefore cannot be destroyed in any way. Unlike banknotes or coins, Bitcoin exists permanently.
Cryptocurrency cannot be canceled once it is transferred.
If someone accidentally transfers cryptocurrency funds to the wrong person’s wallet, there is no way to undo it. Like all other Bitcoin features, it is designed to prevent fraud. However, in the case of traditional currencies, all transactions can be canceled at any time, usually with just one phone call.
Substitutability
Traditional currencies such as dollars and euros can be accepted in many countries, but most currencies can only be used in one country. On the other hand, BTC is an online currency that can be used anywhere in the world.
How is Bitcoin Taxed?
Bitcoin has not yet obtained legal fiat currency status in most countries, but some national tax authorities are recognizing its importance and suggesting regulatory measures for it. However, the method of regulation is very different from country to country.
The US Internal Revenue Service (IRS), for example, treats Bitcoin and other popular cryptocurrencies as assets rather than currencies. Taxpayers who sell goods or services in exchange for bitcoin are required to fill in the value of the bitcoins they received on their tax return form when they file their annual tax return. Cryptocurrency miners, on the other hand, are also required to file tax returns under U.S. tax law, but only if the mining was successful.
Meanwhile, according to the authoritative interpretation of the European Union Court (ECJ), Europe’s Supreme Court, Bitcoin is treated as a currency, not an asset. Bitcoin is exempt from VAT but is required to pay other taxes. Meanwhile, the UK tax authorities consider Bitcoin as a foreign currency and judge all matters related to BTC based on individual facts and circumstances. As of July 2017, Bitcoin is recognized as an official payment method in Japan, but sales tax is exempted.
Bitcoin is a relatively new currency, and the taxation and regulatory framework for it varies considerably from country to country. Moreover, there are many countries where there are no specific laws or regulations for cryptocurrencies.
