Bitcoins & Taxes

The biggest difference between a “Bitcoin” and a U.S. Dollar? A U.S. Declaration of Dependence.

January 27th, 2014 by Lapekas Law Staff

If you do not already have a Bitcoin exchange account, you have likely heard of—and been confused by—the Bitcoin phenomena. In short, a Bitcoin economy looks very much like the Dollar economy—the most obvious difference being that you can’t touch or feel a Bitcoin. Bitcoins are strings of numbers and letters containing both a private and a public “key” and exchanged between Bitcoin wallets through parties’ pairing of the two keys.You can “earn” Bitcoins by installing mining software on your computer (the software then solves complex algorithms and, if it solves a difficult equation, Bitcoins are deposited into your Bitcoin “wallet”). If you do not have the mining equipment, you can purchase Bitcoins with Dollars or any other “real currency” on virtual exchanges. Like a Dollar, Bitcoins can be used to purchase virtual or real-life commodities or sold for “legal tender” like the Dollar or Euro. Read the rest of this entry »