Questions Answered about Bitcoin

Bitcoin has been on the buzz since 2009 as a cryptocurrency, or in other words, a virtual currency, not belonging to one specific country. 

They were designed to be able to make transactions online without your identity being linked to the purchase. People and law enforcement are also skeptical about crypto. Crypto isn’t taxed, and you don’t know if this payment method is being used for illegal activities and money laundering.

Why are people using a cryptocurrency instead of staying with traditional currencies? To learn more, you can similarly use them to a regular bank account to hold your money, but there are no fees, and transactions are made and received at the amount you are sending. The worth also fluctuates. 

There is a lot to know about cryptocurrency, and we are here to answer the top questions people have regarding it. 

How Anonymous Is Bitcoin? 

The answer is not entirely because it is virtually impossible to make something 100% anonymous. There are experienced government agents and hackers that have ways to find out information, even with Bitcoin. However, to the everyday person, the transactions are anonymous. 

If someone is not doing illegal transactions with them, there is no reason to worry about why your identity might be found out while using the cryptocurrency. 

Where Can I Use Bitcoin?

Many restaurants and shops now accept it around the world. You just have to look for a sign when you go to pay. A lot of major online companies also accept the currency, including Amazon and Microsoft. More are set to accept it in the near future.

It can be used for a variety of different things from food shopping and common household items to gift cards and even buying a plane ticket. With time we will likely be able to use for a wide range of things.

Is Bitcoin Taxable Money?

There are no regulations regarding taxing Bitcoin or other forms of crypto. However, you have to pay taxes on all income earned, through a regular bank and money or a cryptocurrency. 

In other words, if you are making an income through a cryptocurrency, then you have to pay income tax on that money, but not crypto itself. If you are making transactions through cryptocurrency or are using it as a savings account in some way, then no, you do not have to pay taxes. 

Is Bitcoin Legal and Safe to Use?

In the United States and Canada, cryptocurrency is legal. In other places in the world, it can vary. You can invest your money into a cryptocurrency without fear of being scammed or faced with legal trouble. 

Having Bitcoin is legal, but it is how you use them is where legality comes into play. If you are using them to make illegal purchases, laundering money, or not paying taxes on income earned through cryptocurrencies is illegal. 

Because Bitcoin is still a new currency, and it is evolving, the laws are also dynamic. To remain without legal troubles, make sure you are only using them for authorized activities and products. Also, make sure you are paying taxes on any money earned through crypto. 

Is it Possible to Buy Bitcoin With Cash?

You can buy Bitcoin using a variety of payment methods, including cash. You can use cash, debit cards, credit cards, and wire transfers. 

First, you will set up your Bitcoin wallet an ID number. Here is where you will keep your cryptocurrency. Your wallet can be a software wallet, an online wallet, or a vault wallet. A software wallet is connected to the hard drive of your computer. 

An online wallet is as it sounds, a place online to keep your cryptocurrency. A vault wallet is completely offline and protected with several keys to secure your wallet. After the setup, you can deposit, however much money you want into your cryptocurrency wallet.

How Much Is a Bitcoin Worth, and Why Should I Invest in Them?

It is constantly changing its value, similar to stocks. In October 2019, it is valued at over $8,000 per Bitcoin. It has raised its value since last year, but it is always rising and falling. 

Because the value of them is continually changing, there is some risk of investing in them. With higher risk, there are higher rewards. Someone can invest and cash out when they are high in value to make a lot of money. However, the complete opposite can happen as well, and you end up losing a lot of money. 

You can sell them when you want to cash out with a cryptocurrency exchange. Also, you can use a Bitcoin ATM to withdraw money from your wallet. You can get a BItcoin debit card by selling your bitcoin and receiving a prepaid card. 

What Does the Future Hold for Bitcoin?

When Bitcoin first came about, it was thought that it would storm the world and take over how we think about money. However, that hasn’t been the case, and it has been a bit of a slow process. It does look like things could be picking up for Bitcoin, however. 

With many of the bigger retail options online accepting the currency, more folk are deciding to give it a try. It’s also becoming legalized in more places so is likely to be used in more countries as time goes on. It has the potential to be a grand worldwide currency.

It will probably keep growing but will come down to one deciding factor: central banks. They will be the ones who make it go big or stop it from ever becoming something huge.

The Bottom Line

Cryptocurrency is a relatively new payment method, and there is still a lot to figure about it. We suggest only buying as much Bitcoin as you would put into stocks because the value constantly fluctuates.

Some believe that this will be the new currency of the world, and other currencies will cease to exist. We can only wait and see how cryptocurrency changes the world as we know it today.