What You Can Do With Cryptocurrency
You can not only shop but also earn money with cryptocurrency that started being used as a payment method in both online and offline world. Here's what you can do with crypto money.
You can not only shop but also earn money with cryptocurrency that started being used as a payment method in both online and offline world. Here’s what you can do with crypto money.
In the past it was hard to find a store that accepted cryptocurrency, but today many online and offline companies accept BTC as a payment method. Bitcoin, which spreads rapidly in retail clothing stores, small local store and restaurants can be used in hotel payments, flight tickets, while buying jewelry and computer parts even in university tuition payments.
Other popular cryptocurrencies such as Litecoin, Ripple, Ethereum and so on do not yet have as much popularity as BTC. However, Apple accepts at least 10 different cryptocurrency types that can be used as a payment method in App Store. Of course, users with other cryptocurrencies can convert their money into BTC for shopping. There are also websites selling gift cards that accept 20 different cryptocurrency types. There are marketplaces in the US that accept cryptocurrencies such as Bitify and OpenBazaar.
Coin as an investment instrument
Many people believe that cryptocurrency is the hottest investment opportunity currently available. In fact, there are stories about many people who became millionaires with Bitcoin investments. Bitcoin is the largest digital currency known to date. While the value of BTC averaged $ 800 in 2016, it exceeded $ 7,000 in November 2017.
Ethereum, the second most widely valued cryptocurrency, was recorded as the fastest-rising digital currency. Since May 2016, Ethereum’s value has increased by at least 2700%. When we look at all the cryptocurrencies, their market value has risen to over 10 thousand percent since the middle of 2013.
Cryptocurrencies, whose market values fluctuate like the shares in stock exchange, also have the risk of being illegal or being hacked in the regions where there is legal regulation
If you want to invest in cryptocurrencies, BTC still seems to be the most popular cryptocurrency. On the other hand, BTC’s share of the cryptocurrency market dropped from 90 percent to 40 percent in 2017. There are many cryptocurrency options that can be invested in, some of which are currently concealed, others are less open and less central or more central than Bitcoin.
While it’s not that easy to get another cryptocurrency, there are a lot of stocks where you can buy BTC. In addition, rising cryptocurrencies such as Litecoin, Ethereum, Monero, Ripple are also on major exchange platforms such as Kraken, BitFinex, BitStamp.
Once you have bought the cryptocurrency, if available, you can use the wallet service of the exchange from which you have bought the currency. If you do not find this safe, you can set up an offline, that is desktop wallet on your hard disk or buy a hardware wallet to keep your cryptocurrency. There are also platforms like Coinmarketcape where you can follow the cryptocurrency market.
The taxation of cryptocurrency varies from country to country. For example, in the US, the Revenue Office has decided that Bitcoin and other digital currencies will be taxed as property, not as currency. For cryptocurrency investors, this means that long-term gains and losses and the applicable capital gains ratio of each investor are taxed at a maximum of 15 percent.
Mining as a means of investment like trading
Miners are an important part of the network of cryptocurrency and mining business is also an important investment. The miners who provide accounting services for their own communities get their computational power from solving the complex cryptographic puzzles needed to validate transactions and store them in a blockchain. Miners earn coins as incentive in return for their blockchain transaction verifying actions.
One of the interesting things about mining is that as the number of people trying to solve blocks increase, the difficulty of puzzles that need to be solved increases. In other words, the more people try to solve and verify the blockchain, the greater the difficulty of the puzzle or the operation.
When we look back, many people earned significant profits from mining using their desktop computer or simply a powerful laptop computer. Today, however, mining can be profitable only with a large hardware investment. That, in turn, means excessive electricity bills in addition to the necessary equipment investment.
Since Litecoin, Dogecoin and Feathercoin are affordable coins, they are quite ideal for beginners. You can earn up to $10 a day using hardware at Litecoin’s current consumer/individual level.
How do miners profit?
As their calculation power increases, their chances of solving the puzzle increase and they receive a reward and a processing fee after solving the cryptographic puzzle. As the interest in the cryptocurrency increased, mining became difficult and the amount of reward coin decreased. For example, when BTC was first created, the prize for successful mining was 50 BTC. Today, this reward dropped to 12.5 bitcoin because Bitcoin was designed to be produced only 21 million units.
As of November 2017, approximately 17 million bitcoins were mined and distributed. However, as the prizes become smaller and smaller, the value of each bitcoin that is mined will multiply.
All of these factors make mining cryptography a highly competitive race weapon that prizes early adopters. Depending on where you are mining, the profits you earn can be subject to different taxation and money transfer regulations.
In the US, FinCEN published a guide to the mining of cryptographic currencies and their use as regular currencies in the exchange. This means that miners may have to comply with specific laws and regulations about such activities.
BTC as a payment method
If you’ve just started a new business and are looking for potential new customers, it might be a solution for you to consider cryptocurrencies as a form of payment. Interest in cryptocurrencies is quite high and will increase. Along with the increasing interest, the number of crypto-ATMs in the world is also increasing. According to Coin ATM Radar’s sales figures, it is estimated that there are currently about 1,800 ATMs in 58 countries.
You should inform your customers that you accept cryptocurrency as a payment method. You can indicate that you accept payments with cryptocurrency with an icon in the Payment methods section. You can then receive the payment by cryptocurrency via hardware terminals/wallets, touchscreen applications or QR codes.
There are many different service providers to receive cryptocurrency payments. For example, CoinPayments allows receiving payment with up to 75 different cryptocurrencies with a commission of 0.5 cents per transaction. Popular service providers such as Cryptonator, CoinGate and BitPay accept payments only with Bitcoin. In the US, virtual convertible currencies like Bitcoin are equivalent to payment methods like cash, gold or gift cards.
Regarding tax, US-based businesses that accept cryptocurrencies have to record the sale reference, the amount taken in a certain currency, and the transaction date. The tax amount is calculated based on the average exchange rate at the time of sale.