A Couple of Busted Myths and 4 Benefits of Digital Currency

What started out as a geeky attempt to come up with a decentralized currency ended up being something everyone, from telemarketers to gym rats is discussing and even investing into. We’re talking, of course, about the world of digital currencies, and the mentioned attempt was more than successful. With this trend sweeping the world, let’s discuss all the benefits that digital currencies bring to the table.

Reducing the costs and complexity of financial transactions

Every cryptocurrency is based on the popular blockchain technology, and understanding the benefits of the digital currency is impossible without knowing at least the basics of how the blockchain works.

Doubtlessly an ingenious invention, blockchain was created by a mysterious entity (either a person or group of people, although wilder theories do exist) called Satoshi Nakamoto. The main idea behind this technology is based on torrents – distributing without copying information, thus creating the foundation of a brand new type of internet.

So, what’s the big deal behind blockchain? Well, it is an incorruptible digital ledger of economic transactions that can be programmed to record everything of value. The cryptos cannot be counterfeited and transactions are irreversible (at least arbitrarily, by the sender), making it a smooth, quick and stable process. This, along with the fact that the digital currencies provide anonymity, is enough to make them both cheaper and simpler alternative to more traditional financial transactions.

General amount of security

Safety has always been the primary selling point of digital currency, despite the fact that the majority of traders aim at receiving sometimes ridiculously high ROI. Even the most convenient type of currency that offers the best options on the market would never attract the big names without guaranteed security; big companies are generally perfectly fine with going with a less lucrative deal, if it is safer.

 

digital currency security

This is exactly why cryptocurrencies are so popular – the unusually high return on investment is only matched by the amount of security involved. Stealing the cryptos isn’t about cracking codes – given the torrent-based principle, a transaction needs to be approved by not one, not two, but by three involved sides: the buyer, the seller and the involved peers, making any cryptocurrency almost virtually uncrackable.

 

Seeing as how it’s embedded within the network as a whole, the blockchain network is public by definition; in other words, it’s completely transparent. In order to alter a single unit of information in the blockchain, one would need a huge amount of computing power (more with each passing second) to override this entire continually growing network.

Interesting benefits

While the famous bitcoin is the predecessor of every other crypto out there, as the innovative technologies advance faster and faster, more convenient platforms are sprouting all over the world; platforms that offer a decentralized peer-to-peer network to trade in cryptocurrency.

Many digital traders are investing in crypto platforms that offer innovative payment solutions for both merchants and customers – many choose to buy Dash and believe that this is the future of electronic payments.

Some startups even specialize in securing loans against bitcoin and other cryptocurrencies at extremely low interest rates, while others focus on extending the outreach of digital currency by incentivizing more and more merchants to accept cryptos as a legitimate payment option.

There’s even a startup that specializes in providing clients in the law enforcement branch with information regarding illegal and illicit activities in the crypto blockchain environment, and this is a more lucrative field than you might think, as the blockchain technology is widely used on the shady deep web.

Still tax-light

Although there’s a rumor going around that the cryptocurrencies aren’t burdened by taxes, this is a complete myth – as is the case with everything else, if you earn money from investing into digital currencies, you will have to pay taxes.

However, cryptocurrencies are VAT-exempt in almost every single country in the entire world. A digital currency is a financial product, meaning that there is no VAT when selling cryptos.

crypto currency tax

Additionally, some jurisdictions dictate almost no taxes when it comes to digital currencies. For instance, Germany, a country that is well-known for its incredibly high tax rates has actually become a safe zone in the crypto tax department. The reasoning behind this is outlined in the fact that a digital currency is considered both currency and property, which means that paying a flat tax for financial income (which amounts to 25%) isn’t required when it comes to digital currencies – the trader is only taxed the profit of buying/selling cryptocurrencies like income!

Cost-effective, simple, secure, full of a variety of options and specializations and tax-light, digital currencies are currently an excellent investment option. We hope that this entry has helped clear some ridiculous myths when it comes to digital currencies and that it will help you make better investments in this department.

News Reporter
Diana Smith is a full time mom of two beautiful girls and a passionate tech lover. In her free time she enjoys exercising and preparing healthy meals for her family.