4 Things to Know About BitCoin

September 16, 2014 Timothy Mobile Marketing

badge-bitcoin-accepted-hereMost Taps & Clicks readers have likely heard of Bitcoins, a virtual currency. But, what do you really know about Bitcoins? This week we give you four important things to know about Bitcoins and a fifteen minute video by one of the country’s Bitcoin authorities.

1. BitCoin currently has few users. Worldwide there are just under 6 million users and only about 13 million BitCoins. While hundreds of businesses are already accepting BitCoins as payment, BitCoin has not be accepted by the masses.

2. Never, ever lose your private key. BitCoins come with a private key or password. Your rpivate key is required to transfer or redeem your BitCoins. No private key equals no access to funds. There is no reminder service nor any hints. And, no refunds. One of the best ways to keep up with your BitCoin private key is to print it out and store the information offline, perhaps in a safe deposit box. Some new startup companies now offer secure, offline BitCoin storage for a fee.

3. There are no consumer protections. Unlike modern banks which are insured by the FDIC, there is no insurance against BitCoin losses. No one, not the SEC, FDIC or the Treasury, offers any protection against BitCoin loss. You assume 100% of the risk.

4. BitCoins are taxable as capital gains. While the government doesn’t protect against losses, the government does want some of your gains. Any increase in the value of a BitCoin is subject to capital gains taxes just like it were a stock, bond or other investment.

Want more details on Bitcoin? Watch this 15-minute TED video by Mark Jeffrey on “Bitcoin and the Economic Singularity.”

References:
Bitcoin.org
A beginner’s guide to bitcoin

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About Timothy Lee

Tim, the Arkansas Small Business and Technology Development Center's webmaster and technical training specialist, has been with ASBTDC since 1995. He retired from the U.S. Air Force with the rank of master sergeant. He's a bit gung-ho, turns cat food cans into cook stoves, and keeps packing ASBTDC equipment for rapid worldwide deployment, but he's your "go to" guy for technical solutions and full-scale disasters.

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