Future of cryptocurrency
None of us here on Steemit are surprised by the reality that fortunes are being made by cryptocurrency traders.
But the question I have is:
What will authorities do when they realize this money is difficult to track and therefore tax?
That's something that everyone wants to know. At the moment there's not much that can be done, the US even announced that then can't/ won't be auditing people unless they hold above a certain amount. I think crypto is here to stay however not without a battle
Trying and not finding that announcement -- any link or remember when/where that was?
As it is right now and will be for a long time even crypto owners are still tied to the fiat system to benefit from profits. As soon as you want to cash out in fiat you would have to prove where the money is coming from. After its cleared you can us it and then whenever you spend it, you pay taxes. The part of tracking the origin and taxes are two different things in my mind
Yes, my understanding is that it is treated as an asset and you have to pay capital gains?
Surely depends on which country you live in...in The Netherlands its not yet considered a source of income and indeed non taxable as such yet. To determine the worth of an asset they take the worth per the 1st of the year. Which could be veeeery nice if it works out right
What a mess though -- imagine if you have to report capital gains for every single transaction where you exchanged cryptocurrency for some real good....
The solution here is, if you really need to, to cash out privately. Through the use of simple personal exchange, for example via http://localbitcoins.com .
That is awesome! How does the process work? Meaning, how is the process completed simultaneously so that neither takes much risk seeing as how neither know each other?
As I understand it whenever a purchase is set up, the actual coins are being held and once payment is processed and proven the coins will automatically be released
Ideally, you can meet "face to face" and do the exchange in person.
However, please do check out the local bitcoins site I linked... I am not affiliated with it in any way, other than as a user. They have implemented an automated escrow mechanism that minimizes the risk to buyer and seller. They deduct a very modest fee, as I recall (it has been a while since I used their service.) The sellers and buyers tend to have some rather hefty "markups," but even there you will find some competition...
As more and more people "buy in" to crypto, I expect that informal exchanges will increase. I think that would be something I would like to see near term with Steemit, informal Steem/fiat exchanges serving the needs of the Steemit community. I know that some of that has already happened, and as the community grows, it should become more widely practiced...