A Cryptocurrency is a digital or virtual currency that is protected by encryption, making counterfeiting and double-spending practically impossible. Another benefit that many appreciate over the traditional form of money.
Bitcoin is currently the most popular type of cryptocurrency right now followed by Ethereum and Cardano.
The first form of cryptocurrency, Bitcoin, was launched in 2009. It only gained traction in recent years and its sudden popularity forced the UK government to find other ways to regulate it through taxation.
As of 2021, the Bitcoin market is worth £479 billion.
Are there any disadvantages of investing in Cryptocurrency?
Here are the following disadvantages of trading this form of currency:
- The cryptocurrency industry experiences major fluctuations consistently
- Issues with storage security
Due to the rigorous integration of the encrypted blockchain, it is hard to recover lost data if a user forgets his password in the wallet, which can be a major issue for its users.
- It is not regulated
Why should I invest in Cryptocurrency and which currency should I invest in?
The cryptocurrency sector is incredibly successful, and trading inside it might be a very profitable option for you. The unpredictable nature of cryptocurrency may dissuade some people from investing or trading, but there are a slew of benefits that should persuade you to start acquiring these financial assets right now.
We'll go through a few of the most important benefits here:
- You have complete ownership, there is no ‘Middleman’
One of the benefits of bitcoin transactions is that they are one-to-one, taking place on a peer-to-peer networking structure that makes "cutting out the middleman" a common practise.
This results in more clarity when it comes to creating audit trails, less uncertainty about who should pay what to whom, and higher accountability because both participants in a transaction are aware of who they are dealing with.
- Cryptocurrency has a high level of security
Finally, the powerful encryption measures used throughout the distributed ledger (blockchain) and cryptocurrency transaction procedures protect consumers from fraud and account tampering while also ensuring their privacy.
- There are a multitude of cryptocurrencies available
There are “privacy coins” that allow you to hide your identity on the blockchain, as well as supply chain tokens that can aid supply chain operations in a variety of businesses.
Will current taxes affect Cryptocurrency?
HMRC has updated its rule books and created a Cryptoassets Manual, which explains how such assets are taxed.
Since 2014, HMRC has been paying attention to the rise of cryptocurrencies. At the time, cryptocurrency was not commonly used or accepted in payment for goods or services, and HMRC saw it as a "speculative investment" or a "game of chance," with no tax procedures in place to regulate it.
A question about any crypto assets held by a taxpayer has been added to the statement of assets form. HMRC's commitment to find all sources of wealth a person may have is exemplified by this method.
Cryptocurrency may sound confusing to most people and it may deter many from investing into it. For more information on how to trade and invest effectively, please contact Persona Finance [firstname.lastname@example.org] or for other business and accounting queries.