There are stores online and physical locations that accept bitcoin for payment. There are also companies that pay employees in bitcoin or digital currency. Some casinos also accept and payout in bitcoins through jackpots, betting, and online lotteries.
A lot of bitcoin enthusiasts believe it is the cryptocurrency or digital currency of the future. It is an effective payment system with no fees that allow for transactions around the world.
In spite of the fact that bitcoin is not backed by a government like traditional currencies, it can be exchanged for these currencies. Investors and traders often take advantage of the exchange rate by exchanging currency for bitcoin.
Due to the popularity of digital currency, bitcoin is becoming a viable alternative to traditional currencies and commodities.
In 2014, the virtual currency was recognized by the Internal Revenue Service, stating it would be taxed as property and not currency.
Any trading gains
or losses are generally held as capital and recorded as capital gains or losses. Also, in accounting, if bitcoins are stored as inventory, they are listed as ordinary gains or losses. If you sold bitcoins that you originally mined or bought from someone else, or if you used bitcoins to purchase goods or services, these transactions could be taxed.
It is classified as an asset, and trading principles apply to bitcoins. The best way to obtain bitcoin or other cryptocurrency is to purchase it through an exchange.