Companies that are selling products accepting cryptocurrencies, like Bitcoin, are on the rise. This is a good sign of cryptocurrency getting recognized as a valued payment method. This will generate even more global awareness about Bitcoin and other cryptocurrencies in general.
So no “highway to hell” for the cryptocurrencies? Well, not exactly, but there can be a “bad moon rising” in the future; mainly in the form of taxes. In earlier articles we have given some pointers why there is such a “negative image” created around everything Crypto related. For example : the trade of illegal goods, like drugs, and the shutdown of Silk Road by the US government. That way; the US seized all of the Bitcoins that had belonged to Silk Road.
It was shut down after an FBI raid in September 2013, when agents took control of its server and arrested the people that were involved with this shady “marketplace”. A clever move to gain a foothold on the Bitcoin market. As Bitcoin rises in price; so does the profit the US potentially could get.
Last December, the US agreed to kind of “legalize” the use of Bitcoin and more importantly, NO TAX would be asked when using Bitcoin. There is also no “regulatory institute” planned in short term. (http://www.forbes.com/sites/kashmirhill/2014/01/31/Bitcoins-legality-around-the-world/ )
Granted, there are some shady websites and people out there, just like in the “non virtual” world. But the US made a historical step forward concerning Bitcoin. By accepting it as a “legal payment method”, they recognized Bitcoin for what it is. But the US is not representing the whole wide world, so what are the other countries thinking about Bitcoin and other cryptocurrencies?
There are some articles out there that project a 58% tax on the use of Bitcoin, and other doom scenarios. Honestly, countries won’t take such drastic measures. Some countries will, in the future, probably opt for some form of tax, but nothing concrete is on the drawing board.
The fact that the US “accepted” Bitcoin as a viable payment method gave most countries pause during which they will probably opt for a “ wait and see” stance. Some countries, like Belgium and Croatia, already do so, to see what way the wind is blowing.
Most of the “doom thinking writers” forget most countries follow the mainstream, aka US policy. Ok, not on everything, but on most things. So the “we got confirmation for the cyber doodah institute from this or that country blah blah” doesn’t mean anything and hasn’t got any validity.
Remember, if a country does have a policy or a certain course, they will publicize that in official documents, or sometimes an official statement will appear in financial publications (like Forbes, the Times, etc). But it seems we are drifting off-topic.
So to tax or not to tax? If there is a tax, the government will get a piece of every transaction people do with Bitcoin. If that tax is too high, like the 58% like some doom writers think, Bitcoin will lose much of their support, because it wouldn’t be very profitable anymore.
Let’s face it : people want to make an extra buck,Euro, whatever, so they use Bitcoin. If the tax will be too high, people tend to go to greener pastures and choose other cryptocurrencies to trade and pay with.
A tax on Bitcoin isn’t that great for businesses either. If there is no tax, the items can be sold at much lower prices, because no tax will be levied against the product. There is a chance you need to pay import tax, but that is a chance you also have when buying things on amazon.com while living in Europe.
Will the future of Bitcoin and other cryptocurrencies be a great one? That is a difficult question. In the short term, most countries will adopt a “wait and see” stance. Eventually some countries will dig deep and follow the US example of treating Bitcoin as an “official payment method”.
There may be countries that want to “milk the cash cow”, but if they tax the coin too much, users will choose other cryptocurrencies. It’s a good thing that there is no lack of altcoins. Although the tax levy avenue will not be practical, because a regulatory institute and “watchdog” needs to be created, and this will not be attempted in current climate.
In the long run there may be some attempts to create some form of regulatory institution, but how that will look like, let alone function, will be something for the future.