The Growing Popularity of Digital Currencies

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Digital currency is a kind of electronic money, which has boosted in popularity

and grabbed the attention of many enterpreneurs. It is distinguished from

another electronic money,because it is a cryptocurrency. That means that no

one can track the transaction. The most wide-spread cryptocurrency is a

Bitcoin. Being a new product on the market, digital currency became a sharply

arguable topic. Indeed,it is difficult to decide if it is a successful venture or not.

Currently the product has more disadvantages,than advantages.

First of all, digital currency is not safe enought. According to bincoin official

website «Bitcoin on mobiles allows you to pay with a simple two step-andpay.

»

It means that a client do not need to create an account, sing up, and swipe his

card. It seems like an advantage,that a person can stay incognito and save its

time,but it becomes less safe. The official bitcoin website warns that cipher

transaction is not absolutely safe. Being untracked is not able to guarantee

safety.Users are not insured using cryptocurrency. Taditional electronic

money,which can be tracked , have more advantages in this case.

Another weak side,which makes digital currency incomplete,is that a bitcoin is

not controled by central bank. The payment is realized directly between users

without middlemen. It attracts many persons, including thiefs. Being unable to

control bitcoins, few countries have made cryptocurrency illegal .Also there is

a number of countries, which did not make it illegal,instead of it they have

created some specific laws about bitcoins. For instance:

«Meetings with policymakers in the UK in September suggested that bitcoinbased

businesses would not have to register with regulators, at least for the

time being, while they consider their regulatory position. The most recent

message from the UK suggests that bitcoins won’t be treated as money, but

will instead be classified as single-purpose vouchers, which could carry a

value-added tax (sales tax) liability on any bitcoins that are sold.

Germany is perhaps the most advanced country when it comes to regulating

bitcoin and virtual currencies. Although some issues remain unresolved, the

German government has exempted bitcoin transactions held for over one year from 25% capital gains tax. It also categorized bitcoin as a form of

private money.

Finland issued a regulatory guide to bitcoin in September, which imposed

capital gains tax on bitcoins, and taxes bitcoins produced by mining as earned

income.

Sweden’s Finansinspektionen financial regulator now considers bitcoin as a

means of payment, following guidance issued last year. Exchanges must

register with it and meet the requirements faced by other financial

institutions.» (coindesk, 2013)

Regardless of the fact that bitcoins have these disadvantages, its popularity is

boosting increasingly. Some small businesses,like travel websites, have

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