Myths of digital currencies debunked
As with any new area of investment, digital currencies have prompted potential investors and analysts to ask many questions. In the past couple of years, digital currencies have experienced significant boosts in popularity.
However, there are persistent untruths, myths, and rumors about the space in general and about certain coins and tokens in particular.
Below, we’ll take a look at some of the most common myths about digital currencies and we’ll explore whether or not each contains some truth.
Myth #1: Digital currencies are not taxed:
For most of them, there is no central authority involved and there are no banks involved. But this does not rule out that the digital currency evades being taxed.
It is just any other transaction and people are taxed whenever they are sold or whenever someone pays with a digital currency.
In India for example, when someone trades with digital currencies and makes a profit, and if that profit exceeds 10 lakh rupees, the person has to pay 30 percent on the profit. This is for short-term gains where there is no minimum time period for holding the investment.
For a long-term gain, where the investment needs to hold for at least two years, the person will be taxed 20 percent on the profit.
Myth #2 Digital currencies don’t have value:
In the U.S., the IRS has spent years determining how to classify digital currencies for tax purposes. Investors haven’t been quite sure how to treat their digital assets when it comes to taxes or even everyday transactions.
All of this has perhaps contributed to the idea that digital currencies are a fad or that they will simply disappear. Nowadays, however, not only have digital currencies been gaining in prominence and popularity, but they are generally set up in such a way as to minimize the risk of these things happening.
As with other types of currencies, digital currencies can be exchanged for goods and services, and they have value in accordance with the belief of their digital currency community.
Myth #3 Digital currencies are bad for the environment:
There is a reason for concern about the impact of digital currencies on the environment. As digital currencies like Bitcoin and Ether have taken off, so too has the number of mining operations around the world.
Each of the individual mining requires massive amounts of computational power and this in turn requires a large amount of electricity.
What’s worth remembering, however, is that the value of mining for a digital currency nearly always outweighs the real-world cost that is required in order to complete that mining operation.
What’s more, newer digital currencies such as Traxalt, belong to a different generation of blockchain that requires less electrical and computer power to complete transactions making it a more eco-friendly solution.
Myth #4 Digital currencies are not secure:
As digital currencies have gained popularity, there have been a number of high-profile scams and thefts. However, there are many ways that investors can change their behavior in order to better protect their holdings.
Bitfoliex is a digital wallet that encourages users to protect their assets and private information with secure passwords and 2FA (Two-Step verification) as a second layer of protection to ensure all the assets are secure.
Further, it’s also worth noting that many governments and other financial institutions have shown an interest in blockchain technology; one of the reasons for this is that blockchain is widely seen as a secure and effective tool with an untapped potential.
Myth #5 Digital currencies are not accepted as a form of payment:
Slowly and steadily, their virtue has been realized by people who are investing in them. Big companies like Microsoft, Fiverr, Dell and Expedia have started to accept Bitcoin and other digital currencies. There are also some businesses accepting Traxalt as payment method.
To reduce the risk of price volatility, it is recommended that companies translate digital currency into fiat currency (US dollars, euros, etc.). Other solution for them would be to keep the digital currencies stored in a digital wallet.
Digital currencies are certainly an exciting type of asset and its technology has the potential to be more transformative than the internet, but as per all type of assets, it’s important to have the necessary knowledge before investing rather than just speculating on price.
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Disclaimer: This press release is for informational purposes only, the information does not constitute investment advice or an offer to invest. The opinions expressed in this article are those of the author and do not necessarily represent the views of CriptomonedaseICO, and should not be attributed to, CriptomonedaseICO.
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