Are There Taxes On Bitcoins?
Bitcoin is a virtual currency that uses cryptographic encryption system to facilitate secure transfers and storage. Unlike a fiat currency, bitcoin is not printed by a central back, nor is it backed by any. Bitcoins are generated by what is called mining—a process wherein high-powered computers, on a distributed network, use an open source mathematical formula to produce bitcoins. It takes real high-tech hardware and hours or even days to mine bitcoins. One can either mine bitcoins or buy them from someone by paying cash, using a credit card, or even a PayPal account. Bitcoins can be used like a fiat world currency to buy goods and services.