Asset Hld Pty Ltd media@assethld.com Contact: Terry Rogers Phone: +61 (0) 456032140
Suite 3W 9 Violet Street Redcliffe QLD 4020
How Bitcoin Could Promote Economic Growth in Australia Many people have only heard about Bitcoin due to its relationship with the “dark web�, but there are plenty of entrepreneurs and investors who now see that this digital currency and payment platform is about more than just libertarian philosophies and avoiding taxes. At its core, Bitcoin is nothing more than a transaction ledger that allows everyone on the network to agree on transfers of value. Instead of clearing a transaction with PayPal or some other centralized third-party, changes to the decentralized Bitcoin ledger are confirmed through consensus. While the currency is what usually gains more attention than the platform, the reality is that bitcoins are nothing more than the units of account on the Bitcoin balance sheet. The nature of distribution of this new payment protocol has plenty of benefits when it comes to lowering transaction fees, having a form of programmable value, avoiding inflation, and removing a lot of the friction involved with the currency monetary system. Debunking the Media Myths Most pundits in mainstream media still have a skeptical view of Bitcoin. This new cryptocurrency has shown plenty of promise when it comes to disrupting the international remittances market and cutting out middlemen such as Visa and Mastercard. However, there are also people out there who state it is only useful for criminals. While it is true that Bitcoin first became popular as the only payment method on Silk Road, an online drug bazaar where users could purchase everything from marijuana to heroine, the facts are that most new technologies are adopted by people on the fringe before anyone else. This was the case with the Internet and, it will probably be the case for every other new technology in the future. In addition to claiming that bitcoins are going to lead to an outbreak of drug and terrorist financing, the media also point to the currency's volatility as a reason for its ultimate failure. There is no disputing that bitcoins are volatile right now, but it's important to point out that this volatility has decreased over time. While fluctuations of 100% or more on a daily basis were commonplace in the early days of the currency, it is starting to trade within a much smaller range as the market cap increases. The main driver of Bitcoin's current volatility is regulatory uncertainty. The price of a single bitcoin should become more stable as various countries around the world define their stances on Bitcoin and cryptocurrency as a whole.
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Asset Hld Pty Ltd media@assethld.com Contact: Terry Rogers Phone: +61 (0) 456032140
Suite 3W 9 Violet Street Redcliffe QLD 4020
The Benefits of a Bitcoin Economy To be clear, Bitcoin as a payment system is probably not going to be able to takeover the world economy unless the bitcoin currency becomes a viable store of value. One of the main perks of Bitcoin is the extremely low cost of transferring value within the network but, that advantage is lost when you're also converting bitcoins to dollars, euros, or any other currency on each side of the transaction. If the day comes where a Bitcoin economy is actually a viable choice for businesses in Australia, then we could be looking at removing hundreds of billions of dollars of extra, unnecessary costs from the system. Australian exporters should love the idea of using Bitcoin for international payments because there isn't a cheaper or faster way to send money across the globe. Whether you're someone who is exporting natural resources to Europe or selling a t-shirt in your online store to someone in the United States, you will notice a number of benefits when switching over to Bitcoin. Firstly, each transaction will cost a merchant between $0.01 and $0.05 USD. This should be preferred over the $20+ wire transfers or $0.30 + 3% fees that all merchants know and despise. These fees also become more costly when you're talking about converting currencies during a transaction. With Bitcoin, there is only one currency in use, so there's no need to worry about a conversion charge. The fact that chargebacks are also impossible on the Bitcoin network usually grabs the attention of any merchant rather quickly. Bitcoin Businesses for Australia In addition to assisting current businesses with lower costs of doing businesses, Bitcoin could also lead to the rise of completely new businesses in this new economy. The field is still wide-open when it comes to creating the world's most widely used Bitcoin exchange or wallet and, Australia could benefit from embracing this kind of innovation. The natural resources that are currently at the heart of Australia's economy will not last forever, and allowing businesses to create new products and services in the Bitcoin space could lead to a long-lasting economic boom throughout the country. It's important to remember that Bitcoin entrepreneurs will likely flock to the countries who embrace Bitcoin more than others, so creating the right kind of regulatory environment around cryptocurrency is the key to unlocking this new opportunity for growth. While Australia does not need to become the “Wild West� for Bitcoin, it would be wise to talk to the top innovators in this space to see what kind of new regulations make sense.
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Asset Hld Pty Ltd media@assethld.com Contact: Terry Rogers Phone: +61 (0) 456032140
Suite 3W 9 Violet Street Redcliffe QLD 4020
Current Bitcoin Tax Policy in Australia Much like other countries around the world, the tax policy around the bitcoin is still evolving in Australia. The Australian Taxation Office has indicated that bitcoins will be taxed like any other currency, and the ATO views the digital money as nothing more than a “new medium of exchange.� Whether or not a GST applies to the bitcoin is still up for debate, and a decision on that should be released with new guidance from the ATO on June 30. Is Bitcoin Here to Stay? While it is likely that the technology behind Bitcoin is here to stay, the debate is still open on whether or not bitcoins will work as a currency. The bitcoin holds many of the most important features of any form of money, but it's currently missing the ability to hold value in a stable manner. It's interesting to note that bitcoins are already able to compete with other volatile currencies, such as the Venezuelan bolivar. Once the regulatory environment around Bitcoin becomes clearer, we could see certain individuals in developing countries move from their local fiat currencies over to bitcoins. If that happens, then the sky's the limit on how Bitcoin can change the world economy.
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