Things to Know About Cryptocurrency Taxation - Pam Sotiropoulos Cryptocurrency have been in news lately because tax officials believe that they can be used to enjoy wealth and avoid taxes. Even the Supreme Court recommended the appointment of a special investigation team on black money to discourage trade in such currency. If you spend or invest in virtual currencies, it is important to understand how virtual currency transactions are treated for tax purposes. Transaction Process in Cryptocurrency: - When a transaction is initiated by a user, his computer sends a public cipher or public key that interacts with the person receiving the currency with the private cipher. If the receiver accepts the transaction, the initial computer adds a piece of code on the block of such encrypted code which is known to every user in the network. A special user named 'Miners' can attach additional code to publicly share blocks by solving cryptographic puzzles and earning more crypto currencies in the process. Once a miner confirms a transaction, the record in the block cannot be changed or removed.
Know about the Cryptocurrency Market: - There are a lot of fluctuations in the Cryptocurrency market. The unstable nature of the market makes it more favorable for a long-term play. There are several established news sites that report on digital currencies, including Coindesk, Business Insider, Coin Telegraph, and Cryptocoin News.