The War Between Bitcoin and the Government
By Space Coast Daily // September 6, 2022
The war between virtual currencies and administrative machinery has been going on for a long time. The recent bitcoin boom has made it more serious. Technological innovations have brought about the appearance of virtual currencies. These are not regulated, but they have a lot of loopholes. We need a clear definition and classification of this new type of money to control them.
With this new trend of virtual assets, there is no regulation on how to handle them. Some countries will likely want to regulate virtual assets to protect their citizens from fraud and theft, but there are legal issues involved in doing so. For example, if you sell your house using your Bitcoin account, how can you prove that you owned the house at the time of sale?
See how bitcoin mining is beneficial to the crypto ecosystem. Despite the loopholes, the never-ending thread of benefits of crypto is what your portfolio can be all about when engaging through the bitcoin trading platform.
1. Loopholes of virtual currencies
The first pitfall of virtual currencies is that government officials do not regulate them, so they cannot be taxed. If you earn money through your virtual assets, it will be difficult to know whether you have to pay taxes or not. Virtual currencies are unregulated and are not controlled by government agencies.
The lack of regulation means that the market is open to abuse. For example, if a company wants to earn money by mining bitcoin through its employees, it can do so without legal consequences. This situation can lead to financial instability in the virtual currency market.
This is a pitfall for these coins and tokens, which can sometimes be used for illegal activities. For example, if you buy from your friend’s laptop or someone else’s account, it is not unlawful; however, if you sell it on the Internet, it may be considered an illegal activity that can bring criminal responsibility upon you.
2. No administrative regulations are a pitfall
The absence of administrative regulations in the virtual currency market makes it difficult for governments to regulate and control it effectively. This causes social unrest and undermines national security because it could be used for illegal purposes such as terrorism financing or money laundering.
There are no regulations on how much virtual assets can be transferred at once or when their value increases or decreases. Any user can put whatever amount of money he wants in his account at any time without any restrictions imposed by the government or other regulatory bodies (banks).
3. No relation between virtual assets and regulations
Another issue with virtual assets is that there is no connection between them and regulations; therefore, it is difficult for authorities to control or prevent illegal use. Some people may think that selling stolen photos for Bitcoins is justified because “it’s just money,” but this does not mean that these transactions should be allowed by law! The main problem with this type of system is that there is no relation between virtual assets and regulations; therefore, they do not fall under any legal framework or law system. The war between virtual currencies and administrative machinery is inevitable.
The administration, which has been historically responsible for managing the monetary system and protecting the interests of the public, has to find ways to adapt to a new reality. The creation, circulation, and use of these currencies are not regulated by the government or any other institution but are managed directly by their users. They can be exchanged for real money at any time and at any place.
Final words
However, this kind of freedom has its drawbacks. For example, there is no need to pay taxes on income from trading in virtual currency because it is considered an investment asset rather than a form of payment and therefore falls outside tax regulations. This means that investors do not pay income tax even if they receive money from trading in digital assets as long as they pay capital gains taxes when selling them later on.
Even though it is possible to buy real estate with Bitcoin or another virtual currency, it is still subject to strict regulations since it is an asset owned by individuals rather than banks or other financial institutions like banks or insurance companies.
