Category: News

Bitcoin vs. Ethereum: What’s the Difference?

Ether (ETH), the cryptocurrency of the Ethereum network, is arguably the second most popular digital token after bitcoin (BTC). Indeed, as the second-largest cryptocurrency by market cap, comparisons between Ether and BTC are only natural.

Ether and bitcoin are similar in many ways: each is a digital currency traded via online exchanges and stored in various types of cryptocurrency wallets. Both of these tokens are decentralized, meaning that they are not issued or regulated by a central bank or other authority. Both make use of the distributed ledger technology known as the blockchain. However, there are also many crucial distinctions between the two most popular cryptocurrencies by market cap. Below, we’ll take a closer look at the similarities and differences between bitcoin and ether.

Bitcoin Basics

Bitcoin was launched in January of 2009. It introduced a novel idea set out in a white paper by the mysterious Satoshi Nakamoto—bitcoin offers the promise of an online currency that is secured without any central authority, unlike government-issued currencies. There are no physical bitcoins, only balances associated with a cryptographically secured public ledger. Although bitcoin was not the first attempt at an online currency of this type, it was the most successful in its early efforts, and it has come to be known as a predecessor in some way to virtually all cryptocurrencies which have been developed over the past decade.

Over the years, the concept of a virtual, decentralized currency has gained acceptance among regulators and government bodies. Although it isn’t a formally recognized medium of payment or store of value, cryptocurrency has managed to carve out a niche for itself and continues to coexist with the financial system despite being regularly scrutinized and debated.

At the start of the cryptocurrency boom in 2017, Bitcoin’s market value accounted for close to 87% of the total cryptocurrency market.

Ethereum Basics

Blockchain technology is being used to create applications that go beyond just enabling a digital currency. Launched in July of 2015, Ethereum is the largest and most well-established, open-ended decentralized software platform.

Ethereum enables the deployment of smart contracts and decentralized applications (apps) to be built and run without any downtime, fraud, control, or interference from a third party. Ethereum comes complete with its own programming language which runs on a blockchain, enabling developers to build and run distributed applications.

The potential applications of Ethereum are wide-ranging and are powered by its native cryptographic token, ether (commonly abbreviated as ETH). In 2014, Ethereum launched a presale for ether, which received an overwhelming response. Ether is like the fuel for running commands on the Ethereum platform and is used by developers to build and run applications on the platform.

Ether is used mainly for two purposes—it is traded as a digital currency on exchanges in the same fashion as other cryptocurrencies, and it is used on the Ethereum network to run applications. According to Ethereum, “people all over the world use ETH to make payments, as a store of value, or as collateral.”

Key Differences

While both the Bitcoin and Ethereum networks are powered by the principle of distributed ledgers and cryptography, the two differ technically in many ways. For example, transactions on the Ethereum network may contain executable code, while data affixed to Bitcoin network transactions are generally only for keeping notes. Other differences include block time (an ether transaction is confirmed in seconds compared to minutes for bitcoin) and the algorithms that they run on (Ethereum uses ethash while Bitcoin uses SHA-256). 

More importantly, though, the Bitcoin and Ethereum networks are different with respect to their overall aims. While bitcoin was created as an alternative to national currencies and thus aspires to be a medium of exchange and a store of value, Ethereum was intended as a platform to facilitate immutable, programmatic contracts, and applications via its own currency. 

BTC and ETH are both digital currencies, but the primary purpose of ether is not to establish itself as an alternative monetary system, but rather to facilitate and monetize the operation of the Ethereum smart contract and decentralized application (dapp) platform.

Ethereum is another use-case for a blockchain that supports the Bitcoin network, and theoretically should not really compete with Bitcoin. However, the popularity of ether has pushed it into competition with all cryptocurrencies, especially from the perspective of traders. For most of its history since the mid-2015 launch, ether has been close behind bitcoin on rankings of the top cryptocurrencies by market cap. That being said, it’s important to keep in mind that the ether ecosystem is much smaller than bitcoin’s: as of January 2020, ether’s market cap was just under $16 billion, while bitcoin’s is nearly 10 times that at more than $147 billion.

Ethereum vs Bitcoin: The Conclusions

Bitcoin and Ethereum have very different purposes!

Ethereum’s purpose is to offer and run decentralized smart-contract applications powered by blockchain technology that do not go offline and cannot be altered. It provides users with a platform and programming language to build the applications on.

Bitcoin’s purpose, however, is largely different. It serves as a decentralized store of value — a peer-to-peer digital currency, used for financial transactions. It eliminates the need for third parties in payment technology.

In conclusion, the primary differences that separate Ethereum vs Bitcoin are their purposes and their concepts. Also, Ethereum’s blockchain runs smart contracts Bitcoin doesn’t and instead only focuses on manual payment technology.

Is Ethereum Better than Bitcoin?

It’s clear that there are benefits to using both Bitcoin and Ethereum. Bitcoin has a lower coin supply and is more liquid than Ethereum, but Ethereum has better technology and provides more uses than Bitcoin does.

Based on the fact Ethereum has more use cases than Bitcoin — and, therefore, serves a bigger purpose — I can say that it is indeed an overall better Bitcoin alternative.

It perhaps isn’t the best Bitcoin alternative, though, as there are other cryptocurrencies that have the same purpose as Bitcoin and run on newer technology and protocols.

That’s not to say that these other alternatives are better than Ethereum. It just means that, because they are more similar to Bitcoin, one of them may be the best Bitcoin alternative. It doesn’t necessarily mean they’re a better Ethereum alternative!

Which has the Better Technology?

Blockchain technology is still in its early years. That’s why Ethereum and Bitcoin get continuous updates. However, Ethereum is currently the clear winner. Here’s why:

  • Ethereum uses smart contracts. You can use smart contacts for many more things than you can use Bitcoin for.
  • The Ethereum’s blockchain was released in 2015. It is 6 years newer and further developed compared to the Bitcoin blockchain (released in 2009).
  • Ethereum’s blockchain is a further advanced version of Bitcoin’s blockchain. It fixes some of its issues and introduces new features such as smart contracts.
  • Ethereum’s transaction fees are cheaper than Bitcoin’s transaction fees.
  • Not only do the transactions cost less, but as I stated earlier, they’re much quicker, too.

So, Which One? Bitcoin or Ethereum?

In Ethereum vs Bitcoin battle, if I had to choose one, it’d be Ethereum! This is because it has unlimited use cases, whereas Bitcoin only tackles payment and banking issues. Bitcoin may have a better position in the market, but Ethereum has better technology and bigger potential.

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Bitcoin vs. Bitcoin Cash: What Is the Difference?

Since its inception, there have been questions surrounding bitcoin’s ability to scale effectively. Transactions involving the digital currency bitcoin are processed, verified, and stored within a digital ledger known as a blockchain. Blockchain is a revolutionary ledger-recording technology. It makes ledgers far more difficult to manipulate because the reality of what has transpired is verified by majority rule, not by an individual actor. Additionally, this network is decentralized; it exists on computers all over the world.

The problem with blockchain technology in the Bitcoin network is that it’s slow, especially in comparison to banks that deal with credit card transactions. Popular credit card company Visa, Inc. (V), for instance, processes close to 150 million transactions per day, averaging roughly 1,700 transactions per second. The company’s capability actually far surpasses that, at 65,000 transaction messages per second.

How many transactions can the bitcoin network process per second? Seven. Transactions can take several minutes or more to process. As the network of bitcoin users has grown, waiting times have become longer because there are more transactions to process without a change in the underlying technology that processes them.

Ongoing debates around bitcoin’s technology have been concerned with this central problem of scaling and increasing the speed of the transaction verification process. Developers and cryptocurrency miners have come up with two major solutions to this problem. The first involves making the amount of data that needs to be verified in each block smaller, thus creating transactions that are faster and cheaper, while the second requires making the blocks of data bigger, so that more information can be processed at one time. Bitcoin Cash (BCH) developed out of these solutions. Below, we’ll take a closer look at how bitcoin and BCH differ from one another.


In July 2017, mining pools and companies representing roughly 80 percent to 90 percent of bitcoin computing power voted to incorporate a technology known as a segregated witness, called SegWit2x. SegWit2x makes the amount of data that needs to be verified in each block smaller by removing signature data from the block of data that needs to be processed in each transaction and having it attached in an extended block. Signature data has been estimated to account for up to 65 percent of data processed in each block, so this is not an insignificant technological shift. Talk of doubling the size of blocks from 1 MB to 2 MB ramped up in 2017 and 2018, and, as of February 2019, the average block size of bitcoin increased to 1.305 MB, surpassing previous records. By January 2020, however, block size has declined back toward 1 MB on average.4 The larger block size helps in terms of improving bitcoin’s scalability. In September 2017, research released by cryptocurrency exchange BitMex showed that SegWit implementation had helped increase the block size, amid a steady adoption rate for the technology.

Bitcoin Cash

Bitcoin Cash is a different story. Bitcoin Cash was started by bitcoin miners and developers equally concerned with the future of the cryptocurrency and its ability to scale effectively. However, these individuals had their reservations about the adoption of a segregated witness technology. They felt as though SegWit2x did not address the fundamental problem of scalability in a meaningful way, nor did it follow the roadmap initially outlined by Satoshi Nakamoto, the anonymous party that first proposed the blockchain technology behind cryptocurrency. Furthermore, the process of introducing SegWit2x as the road forward was anything but transparent, and there were concerns that its introduction undermined the decentralization and democratization of the currency.

In August 2017, some miners and developers initiated what is known as a hard fork, effectively creating a new currency: BCH. BCH has its own blockchain and specifications, including one very important distinction from bitcoin. BCH has implemented an increased block size of 8 MB to accelerate the verification process, with an adjustable level of difficulty to ensure the chain’s survival and transaction verification speed, regardless of the number of miners supporting it.

Bitcoin Cash is thus able to process transactions more quickly than the Bitcoin network, meaning that wait times are shorter and transaction processing fees tend to be lower. The Bitcoin Cash network can handle many more transactions per second than the Bitcoin network can. However, with the faster transaction verification time comes downsides as well. One potential issue with the larger block size associated with BCH is that security could be compromised relative to the Bitcoin network. Similarly, bitcoin remains the most popular cryptocurrency in the world as well as the largest by market cap, so users of BCH may find that liquidity and real-world usability is lower than for bitcoin.

The debate about scalability, transaction processing, and blocks has continued beyond the fork which led to Bitcoin Cash. In November of 2018, for example, the Bitcoin Cash network experienced its own hard fork, resulting in the creation of yet another derivation of bitcoin called Bitcoin SV. Bitcoin SV was created in an effort to stay true to the original vision for bitcoin that Satoshi Nakamoto described in the bitcoin white paper while also making modifications to facilitate scalability and faster transaction speeds.

Bitcoin Cash Advantages

The main advantage of Bitcoin Cash is that it is cheaper and faster to use. This is because it is more scalable, meaning that more people can transact on the blockchain at any given time.

Its development team is quick to implement solutions that make the blockchain more scalable. Which gives it great future potential for adoption and use.

It is also cheaper to move around between exchanges. Whenever its price surges, it is a great trading asset against Bitcoin and a solid investment to hedge against Bitcoin, should Bitcoin lose its market dominance one day.

Bitcoin Cash Disadvantages

Bitcoin Cash does not have as much investor confidence as Bitcoin. Also, its adoption rate and market penetration is much lower than Bitcoin’s. This has a lot to do with the fact that this coin is much newer than Bitcoin.

Bitcoin Cash mining is relatively the same as mining Bitcoin. This means that someone who mines Bitcoin Cash makes much less profit than someone mining Bitcoin with the same equipment. For this reason, miners are not as quick to mine Bitcoin Cash.

Finally, when it comes to trading, BCH has far less trading pairs than BTC, making it less tradeable than Bitcoin. All these disadvantages work towards making Bitcoin Cash’s adoption rates and prices much lower than Bitcoin’s.

Bitcoin Advantages Over Bitcoin Cash

As the original cryptocurrency, Bitcoin is the base currency of the entire sector. It is what all other cryptocurrencies trade against (as well as ETH, most of the time) and is tradable on most exchanges. Bitcoin is the most popular and has the most trading pairs with other cryptocurrencies.

As of 23rd March 2018, Bitcoin makes up 44.5% of the entire capital of the crypto-sector and is considered the Gold standard of a rapidly growing industry.

The biggest advantage Bitcoin has over Bitcoin Cash is its community and cult-like following: it’s the first cryptocurrency anyone hears about

Bitcoin Disadvantages Over Bitcoin Cash

The disadvantages of Bitcoin when compared to Bitcoin Cash mainly regard the scalability issues facing Bitcoin. Bitcoin is olderslower and costs a lot more per transaction. It is likely that as the sector grows, Bitcoin will continue to lose its dominance to these other coins.

Another disadvantage is that the core development team of Bitcoin is not united as good as other crypto teams, like that of Ether, for example. They appear to be divided as a group and lacking clear leadership.

The debate about the future of bitcoin appears to show no signs of being resolved.


  • Bitcoin is limited by transaction processing time, an issue which has caused rifts between factions within the bitcoin mining and developing communities.
  • Bitcoin Cash was started by bitcoin miners and developers concerned about the future of the bitcoin cryptocurrency, and its ability to scale effectively.
  • While bitcoin blocks are limited to 1 MB, BCH blocks are 8 MB.
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How does Bitcoin cash work?

What is Bitcoin Cash?

Bitcoin cash is a cryptocurrency created in August 2017, from a fork of Bitcoin. Bitcoin Cash increased the size of blocks, allowing more transactions to be processed and improving scalability.

The cryptocurrency underwent another fork in November 2018 and split into Bitcoin Cash ABC and Bitcoin Cash SV (Satoshi Vision). Bitcoin Cash is referred to as Bitcoin Cash because it uses the original Bitcoin Cash client. 

Understanding Bitcoin Cash

The difference between Bitcoin and Bitcoin Cash is philosophical.

As proposed by Bitcoin inventor Satoshi Nakamoto, Bitcoin was meant to be a peer-to-peer cryptocurrency that was used for daily transactions. Over the years, as it gained mainstream traction and its price surged, Bitcoin became an investment vehicle instead of a currency. Its blockchain witnessed scalability issues because it could not handle the increased number of transactions. The confirmation time and fees for a transaction on bitcoin’s blockchain surged. This was mainly due to the 1MB block size limitation for bitcoin. Transactions queued up, waiting for confirmation because blocks could not handle the increase in size for transactions.

Bitcoin Cash proposes to remedy the situation by increasing the size of blocks to between 8 MB and 32 MB, thereby enabling the processing of more transactions per block. The average number of transactions per block on Bitcoin at the time Bitcoin Cash was proposed was between 1,000 and 1,500. The number of transactions on Bitcoin Cash’s blockchain during a stress test in Sep. 2018 surged to 25,000 per block.

Major proponents of Bitcoin Cash, such as Roger Ver, often invoke Nakamoto’s original vision of a payment service as a reason to increase the block size. According to them, the change in bitcoin’s block size will enable bitcoin’s use as a medium for daily transactions and help it compete with multinational credit card processing organizations, such as Visa, which charge high fees to process transactions across borders.

Bitcoin Cash also differs from bitcoin in another respect as it does not incorporate Segregated Witness (SegWit), another solution proposed to accommodate more transactions per block. SegWit retains only information or the metadata relating to a transaction in a block. Typically, all details pertaining to a transaction are stored in a block. 

Ideological and block size differences apart, there are several similarities between Bitcoin and Bitcoin Cash. Both use the Proof of Work (PoW) consensus mechanism to mine new coins. They also share the services of Bitmain, the world’s biggest cryptocurrency miner. The supply of Bitcoin Cash is capped at 21 million, the same figure as Bitcoin. Bitcoin Cash also started off using the same mining difficulty algorithm – known technically as Emergency Difficulty Adjustment (EDA) – which adjusts difficulty every 2016 blocks or roughly every two weeks. Miners took advantage of this similarity by alternating their mining activity between Bitcoin and Bitcoin Cash. While it was profitable for miners, the practice was detrimental to the increasing supply of Bitcoin Cash in the markets. Hence, Bitcoin Cash has revised its EDA algorithm to make it easier for miners to generate the cryptocurrency.

History of Bitcoin Cash

In 2010, the average size of a block on Bitcoin’s blockchain was less than 100 KB and the average fee for a transaction amounted to just a couple of cents. This made its blockchain vulnerable to attacks, consisting entirely of cheap transactions, that could potentially cripple its system. To prevent such a situation, the size of a block on bitcoin’s blockchain was limited to 1 MB. Each block is generated every 10 minutes, allowing for space and time between successive transactions. The limitation on size and time required to generate a block added another layer of security on bitcoin’s blockchain.

But those safeguards proved to be a hindrance when bitcoin gained mainstream traction on the back of greater awareness of its potential and enhancements to its platform. The average size of a block had increased to 600K by Jan. 2015. The number of transactions using Bitcoin surged, causing a buildup of unconfirmed transactions. The average time to confirm a transaction also moved upwards. Correspondingly, the fee for transaction confirmation also increased, weakening the argument for bitcoin as a competitor to expensive credit card processing systems. (Fees for transactions on bitcoin’s blockchain are specified by users. Miners typically push transactions with higher fees to the front of the queue in order to maximize profits.)

Two solutions were proposed by developers to solve the problem: increase the average block size or exclude certain parts of a transaction to fit more data into the blockchain. The Bitcoin Core team, which is responsible for developing and maintaining the algorithm that powers bitcoin, blocked the proposal to increase block size. Meanwhile, a new coin with flexible block size was created. But the new coin, which was called Bitcoin Unlimited, was hacked and struggled to gain traction, leading to doubts about its viability as a currency for daily transactions.

The first proposal also drew sharp and diverse reactions from the bitcoin community. Mining behemoth Bitmain was hesitant to support Segwit implementation in blocks because it would affect sales for its AsicBoost miner. The machine contained a patented mining technology that offered a “shortcut” for miners to generate hashes for crypto mining using less energy. However, Segwit makes it more expensive to mine Bitcoin using the machine because it makes transaction reordering difficult.

Amidst a war of words and staking out of positions by miners and other stakeholders within the cryptocurrency community, Bitcoin Cash was launched in August 2017. Each Bitcoin holder received an equivalent amount of Bitcoin Cash, thereby multiplying the number of coins in existence. Bitcoin Cash debuted on cryptocurrency exchanges at an impressive price of $900. Major cryptocurrency exchanges, such as Coinbase and itBit, boycotted Bitcoin Cash and did not list it on their exchanges.

But it received vital support from Bitmain, the world’s biggest cryptocurrency mining platform. This ensured a supply of coins for trading at cryptocurrency exchanges when Bitcoin Cash was launched. At the height of cryptocurrency mania, Bitcoin Cash’s price skyrocketed to $4,091 in December 2017.

Paradoxically enough, Bitcoin Cash itself underwent a fork slightly more than a year later due to the same reason it split from Bitcoin. In Nov. 2018, Bitcoin Cash split into Bitcoin Cash ABC and Bitcoin Cash SV (Satoshi Vision). This time around, the disagreement was due to proposed protocol updates that incorporated the use of smart contracts onto bitcoin’s blockchain and increased the average block size.  

Bitcoin Cash ABC uses the original Bitcoin Cash client but has incorporated several changes to its blockchain, such as Canonical Transaction Ordering Route (CTOR) – which rearranges transactions in a block to a specific order.

Bitcoin Cash SV is led by Craig Wright, who claims to be the original Nakamoto. He rejected the use of smart contracts on a platform that was meant for payment transactions. The drama prior to the latest hard fork was similar to the one before forking Bitcoin Cash from Bitcoin in 2017. But the end has been a happy one as more funds have flowed into the cryptocurrency ecosystem due to the forking and the number of coins available to investors has multiplied. Since launching, both cryptocurrencies have garnered respectable valuations at crypto exchanges.

Concerns About Bitcoin Cash

Bitcoin Cash promised several improvements over its predecessor. But it has yet to deliver on those promises.

The most important one is regarding block size. The average size of blocks mined on Bitcoin Cash’s blockchain is much smaller than those on Bitcoin’s blockchain. The smaller block size means that its main thesis of enabling more transactions through larger blocks is yet to be tested technically. Transaction fees for bitcoin have also dropped significantly, making it a viable competitor to bitcoin cash for daily use.  

Other cryptocurrencies aspiring to similar ambitions of becoming a medium for daily transactions have added another wrinkle to Bitcoin Cash’s original ambitions. They have staked out projects and partnerships with organizations and governments, at home and abroad. For example, Litecoin announced partnerships with event organizers and professional associations, and others, such as Dash, claim to have already gained traction in troubled economies like Venezuela, although such claims are disputed. 

While its split from Bitcoin was fairly high-profile, Bitcoin Cash is mostly unknown outside the crypto community and is yet to make major announcements about adoption. Based on transaction levels on blockchain, Bitcoin still has a sizeable lead over its competition.

The second fork on Bitcoin Cash’s blockchain also highlights problems with managing its developer pool. That a sizeable section of the pool thought that Bitcoin cash was diluting its original vision is troubling because it opens the door to further splits in the future. Smart contracts are an essential feature of all cryptocurrencies. However, it remains to be seen whether Bitcoin Cash pivots to become a platform for incorporating smart contracts for transactions or simply for payment systems. 

Bitcoin Cash also does not have a clearly-defined governance protocol. While other cryptocurrencies, such as Dash and VeChain, have innovated and outlined detailed governance protocols that assign voting rights, the development, and design of Bitcoin Cash seem to be centralized with its development teams. As such, it is unclear with investors without substantial holdings of the cryptocurrency have voting rights or a say in the cryptocurrency’s future direction.


  • Bitcoin Cash is the result of a Bitcoin hard fork occurring in August 2017.
  • Bitcoin Cash was created to accommodate a larger block size compared to Bitcoin, allowing more transactions into a single block.
  • Despite their philosophical differences, Bitcoin Cash and Bitcoin share several technical similarities. They use the same consensus mechanism and have capped their supply at 21 million.
  • Bitcoin Cash itself underwent a fork in November 2018 and split into Bitcoin Cash ABC and Bitcoin Cash SV (Satoshi Vision). Bitcoin Cash ABC is referred to as Bitcoin Cash now.
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Is Bitcoin Legal

Every single fiat currency in the world is created, released and controlled by a single entity – in most cases a central bank. By law, ordinary citizens are only allowed to buy, sell or keep the currency. If someone tries to create any amount of money, they will inevitably find themselves behind bars.

When Bitcoin was introduced, it created a completely new and unique paradigm. The world’s first digital, decentralized currency that isn’t controlled by anyone at all. Moreover, the very concept of Bitcoin implies that anyone with enough computing power can create coins by simply being an active part of the community.

As it’s becoming more and more mainstream, law enforcement agencies, tax authorities and legal regulators all over the world are trying to wrap their heads around the concept of cryptocurrency and where exactly does it fit in existing regulations and legal frameworks.

The legality of Bitcoin depends on who you are, where you are in the world, and what you’re doing with it. Here’s our guide on legal issues concerning Bitcoin, where we mostly focus on the US but cover other major countries as well.

Concerns about cryptocurrencies

In many jurisdictions, the authorities are still struggling to understand Bitcoin, let alone define it in legal terms. Many concerns have been raised over its decentralized nature. It seems only natural for governing authorities to be worried about a financial community that can’t be fully controlled.

This also extends to exchanges and protection of people’s funds. While US-based exchanges have to be regulated, there are plenty of offshore platforms that don’t. Indeed, the cryptocurrency history has been filled with instances of exchanges suddenly shutting down and running away with people’s funds.

The most famous of such cases is the closure of the notorious exchange Mt.Gox. At the beginning of 2014, formerly the most prominent Bitcoin exchange in existence filed for bankruptcy due to technological problems and the apparent theft or loss of 744,000 of its users Bitcoins. That number made up about six percent of 12.4 mln Bitcoins in circulation at the time.

Bitcoin’s ability to be used semi-anonymously is another cause for concern. Even though every single transaction is recorded in the Blockchain, it is very easy for users to stay almost completely anonymous, as those records only contain the public keys and the amount of funds transferred.

Most of these concerns were voiced after a dark web market Silk Road gained mainstream-media attention, as Bitcoins were the only form of payment accepted there. The market was since shut down by the FBI, but the authorities are still worried about Bitcoin’s appeal among the traders of illegal goods and services. Moreover, it is feared that Bitcoin’s semi-anonymity and decentralized nature can be exploited in money laundering and tax evasion schemes.

Your opportunities depend on the role

Buying goods

In 2013, Bitcoin was classified as a convertible decentralized virtual currency by the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN). They have also issued a guidance, in which they stated that those who obtain units of virtual currency and use it to purchase goods are not considered money transmitters and are operating within the law.

So, buying well-natured goods and services with Bitcoins is completely legal. The cryptocurrency is accepted as a form of payment on several major and minor online marketplaces and service providers, including OverstockShopify, and OKCupid. Moreover, there are shops and restaurants all over the US where you can pay with Bitcoins.


According to the same guidance, investing in Bitcoin is also within the legal territory.  Many regulated US-based exchanges have to comply with the Anti-Money Laundering and Know Your Customer policies.  Because of that, those who wish to trade and invest in Bitcoin have to verify their ID and connect an existing bank account.

Although, the US Securities and Exchange Commission (SEC) has warned potential investors that both fraudsters and promoters of high-risk investment schemes may target Bitcoin users.


The FinCEN guidance states that users creating units of Bitcoins and exchanging them for flat currency can be considered money transmitters and might be subject to special laws and regulations that cover that type of activity.

However, to this day the laws have rarely, if ever, been enforced to crackdown on Bitcoin miners.

Accepting payments in Bitcoins (for business)

It’s legal for businesses both big and small to accept Bitcoins payments. Assuming, of course, that it’s a well-natured business that sells goods and services for regular currency and chooses to accept Bitcoin as another legal way to pay. Any business accepting Bitcoin payments is also required to pay taxes on income received through Bitcoin.

Bitcoin has been recognized as a convertible virtual currency, which implies that accepting it as a form of payments is exactly the same as accepting cash, gold or gift cards.


According to a Virtual Currency Guidance, which was first released by the Internal Revenue Service (IRS) in 2014, cryptocurrencies like Bitcoin are to be treated as property instead of as currency and to be taxed as such. However, it isn’t as simple as it might sound.

For instance, if you buy something worth $300 with your Bitcoins, it means that you just sold an asset. You either made a profit or a loss on that sale, depending on the Bitcoin’s value when you bought it and when you sold it. Whether it counts as an ordinary or a capital gain, short or long term depends on the circumstances.

The regulation is not entirely clear, but the IRS is trying to crack down on reporting. In the year 2015, only 802 people paid taxes on Bitcoin profits. The IRS is apparently using special software to track down Bitcoin tax cheats.

A bipartisan bill, which calls for a tax exemption for transactions under $600, was recently introduced in the House of Congress. If it passes, it will make lives of small, day-to-day traders much easier. Until then, it is recommended to keep records of all Bitcoin-related activities.

When it comes to trading Bitcoins, the records kept must contain the same information as stock or forex brokerage statements: date, description, quantity, price and fees. If you’re mining, you might need to know when the Bitcoin proceeds were attained. Businesses accepting Bitcoins as a form of payment need to record reference of sales, the amount received in BTC and the date of the transaction. If sales taxes are payable, the amount due is calculated based on the average exchange rate at the time of sale.


BitLicense is a set of regulations regarding Bitcoin transactions put forward by the New York State Department of Financial Services (NYDFS) for Bitcoin companies operating in New York or serving NY residents. As of September 2017, two years after the regulation came into effect, only five licenses were granted, and the companies that managed to obtain them had to spend upwards to $100,000 in order to do so. Many companies decided to opt-out of serving New York residents, with Bitfinex exchange describing the requirements set forth by NYDFS as ‘extremely invasive,’ adding that they would compromise their user base’s privacy.

The license can be obtained through a process of application, which costs $5,000. Companies looking to obtain the license will need to have a compliance officer, responsible for overseeing the firm’s compliance with the regulations. Moreover, all other federal and state laws that apply to Bitcoin have to be obeyed. This includes compliance with Money Transmitter laws, Anti-Money Laundering and Know Your Customer policies. Such protections can get very expensive.

Regulators’ opinions

SEC — Securities and Exchange Commission

The Securities and Exchange Commission has been notably quiet on the subject of Bitcoins, especially compared to regulatory bodies in other countries. In 2014, they published an investor alert, in which they warned people that Bitcoin users can be targeted by fraudsters.

The SEC has recently investigated a cryptocurrency initial coin offering (ICO) called ‘DAO.’ which was hacked and about $50 mln worth of Ether coins were stolen. In this investigation, SEC focused primarily on whether DAO coins constituted security. The report concluded that investing money in a token, expecting a profit which derives from the managerial efforts of other people makes a cryptocurrency security and requires appropriate regulation.

However, SEC’s report focused entirely on Initial Coin Offerings, and Bitcoin is way past that. So, any regulations SEC is likely to impose, will most likely only concern newcomers to the market. Whether Bitcoin can be treated as a security depends on the particular transaction, but SEC has decided that any firm using Blockchain technology to trade securities would need to register as an exchange, Alternative Trading System (ATS) or broker/dealer.

FinCEN — Financial Crimes Enforcement Network

According to FinCEN’s guidance on cryptocurrency, ‘virtual currency,’ as they call it, is defined as a ‘medium of exchange that operates like a currency in some environments, but does not have all the attributes of real currency.’ The guidance only addressed convertible virtual currency like Bitcoin, which can either act as a substitute for real currency or has an equivalent in existing currency.

‘Users’ of virtual currency are not considered an MSB (Money Serving Business) under FinCEN’s regulations. This means that if you obtained Bitcoins to pay for goods or services, you are not subject to MSB registration, reporting and recordkeeping regulations.

In contrast, ‘exchangers’ and ‘administrators’ are considered money transmitters, and therefore are required to comply with FinCEN’s regulations. The guidance defines ‘exchangers’ as people engaged as a business in the exchange of Bitcoins and other digital currencies, while ‘administrators’ are engaged as a business in putting virtual currency into circulation.

In July 2017, in its first action against a foreign-located MSB operating in the U.S., FinCEN imposed a £110 mln penalty on the BTC-e exchange, arresting one of its operators and seizing the site’s domain.

CFTC — Commodity Futures Trading Commission

CFTC is an independent US Federal agency that looks after financial derivatives. In 2014, a CFTC Commissioner stated that the agency definitely has authority when it comes to Bitcoin, as they believed it can be classified as a commodity.

Recently, the agency released a primer, in which they stated that virtual currencies can be considered commodities or derivatives contracts, depending on the particular facts and circumstances. This resulted in an eight percent drop in Bitcoin’s exchange rate, as investors feared tighter regulations.

CFTC seems to have taken a pro-Bitcoin stance, recently granting LedgerX the right to create a regulated Bitcoin futures market. In September 2017, CFTC filed its first-ever charges against Bitcoin fraudsters. In a move welcomed by genuine Bitcoin investors, Gelfman Blueprint was charged with fraud, misappropriation, and issuing false account statements in connection with solicited investments in Bitcoin.

IRS — Internal Revenue Service

Even though IRS released general guidance on the taxing of digital currencies, many questions still remain unanswered. The agency further complicated things with its decision to tax Bitcoin as property, which means that even paying for a cup of coffee with the cryptocurrency will incur a tax.

According to the IRS regulations, buying goods and services with Bitcoin is exactly the same as selling an asset. If you spend your Bitcoins, it means that you’ve either made a profit or a loss, depending on a BTC’s exchange rate when you bought it and when you sold it.

In order to comply with the IRS regulations, it is recommended that you keep a record of all your Bitcoin-related transactions.

As only 0.04% of customers included crypto in their 2017 tax reports, the IRS has ramped up their hunt for Bitcoin tax evaders, having even formed a dedicated taskforce. However, while the IRS is closely monitoring Bitcoin and other cryptocurrency transactions in an attempt to get more tax dollars, there have been rumours about a possible future tax amnesty for Bitcoin users. Whether it will actually happen as well as when it will happen still remains to be seen.

Federal Reserve

The US Federal Reserve is the world’s most influential banking entity, as it controls the global reserve currency – the US dollar. They are very interested in digital currencies and the technology associated with them, having published thorough papers on both Bitcoin and Blockchain. The fact that a financial giant like Federal Reserve invested man-hours into understanding the concept of Bitcoin speaks volumes about how influential the currency is becoming.

However, the organization has repeatedly issued warnings about the risks associated with digital currencies. Recently, the Federal Reserve stated that they are keeping very ‘close attention’ to Blockchain, describing it as something that ‘could ameliorate or exacerbate traditional financial risks.’ A US Fed Governor was also quoted saying that digital currencies could make it easier to hide illegal activities.

Janet Yellen, the US Federal Reserve chair, was recently quoted saying that the Fed is currently researching into introducing its own digital currency. If that happens, the U.S. will join the crypto market with their own, official and state-controlled cryptocurrency.

FINRA — Financial Industry Regulatory Authority

The self-regulatory organization for U.S. brokers has been quite active in terms of defining Bitcoin, completing guides and issuing warnings for its clients.

What is interesting, is that in its report on Distributed Ledger Technology FINRA implied that the widespread use of Blockchain technology could impact the organization’s core business practices. Specifically, the way FINRA members self-regulate in the areas of Anti Money Laundering and Know Your Customer policies, asset verification, business continuity, surveillance, payments, and even record-keeping.

OCC — Office of the Controller of the Currency

In its 2016 paper, the office of the US Treasury proposed a possibility of moving forward with considering applications from fintech companies to become special purpose national banks (SPNBs). This initiative is set to provide companies that wish to become limited purpose digital banks with a unified federal regulatory regime. However, as of November 2017, there are still some significant political and legal uncertainties surrounding this initiative.

Moreover, the OCC released another optimistic paper in which it called for the formation of a ‘responsible innovation’ department. They are planning to launch offices in Washington, New York and San Francisco to spur the growth of emerging technologies, including digital currencies.

CFPB — Customer Financial Protection Bureau

The Bureau has issued a consumer warning about Bitcoin. The volatile exchange rates, possible lack of assistance from exchanges in case of lost funds, and the threat of hacking and scams were cited among potential issues. Besides that, the CFPB has also acknowledged Bitcoin’s benefits.

NFA — National Futures Association

The NFA is an independent self-regulatory organization for the US futures market. Every participant in the futures market, including those trading in Bitcoin, is required to have the NFA membership.

Organizations which develop legislation

Similarly to most other governmental organizations, the US Senate and The House of Representatives haven’t been very local in regard to Bitcoin and other digital currencies.

In August 2013, the US Senate sent out letters to various law enforcement agencies, asking about potential risks and threats in relation to cryptocurrencies. Most of the agencies responded with a cautious acknowledgment of legitimate uses of Bitcoins.

Since then, the topic of cryptocurrencies was often discussed both in the Senate and The House of Representatives. In 2016, The Congressional Blockchain Caucus was formed in order to bring all congressmen up to speed on the subject of Bitcoin and Blockchain in hopes of creating future laws that will affect that particular sector.

In the Summer of 2017, US lawmakers drafted a bill that is set to protect cryptocurrencies from government interference. If the bill goes through it will provide protection to certain cryptocurrencies that comply with specific minimum requirements to prevent them from being used in illegal business practices. The bill is expected to be filed in the Fall of 2017.

Countries in which Bitcoin is banned


In 2014, El Banco Central de Bolivia outright banned any currency that wasn’t issued by or regulated by the government. The bank specifically mentioned Bitcoins as well as some other digital currencies, but the ban extends to all cryptocurrencies.

Bolivian authorities have recently cracked down on cryptocurrency use, labeling it a pyramid scheme and arresting 60 people. An accompanying statement emphasized that the action was necessary to remind the population that any kind of digital currency is prohibited.


The Ecuadorian government has banned Bitcoin and all other digital currencies, due to the establishment of a new state-run electronic money system. The project is designed to be directly tied to the local currency and is controlled by the government.


In 2014, the Vietnamese Central Bank issued a statement in which it explicitly prohibited the population to use Bitcoins within the country. This was done as a precautionary measure with the faith of digital currency set to be decided later by the Prime Minister.

According to reports, in August of 2017, the Vietnamese Prime Minister has authorized a plan that could potentially lead to the official recognition of Bitcoin and other digital currencies as a form of payment by 2018.

However, in October 2017 Vietnamese government made another complete turnaround and outright banned the use of digital currency in the country. It was also announced that starting early 2018 anyone caught using digital currencies will face a fine.

Countries in which Bitcoin is legal


Initially, Australians were potentially subject to goods-and-services tax when they either purchased or spent a cryptocurrency. Often, consumers could effectively bear this tax twice: once when they purchase the cryptocurrency and once again when they’ve used it in exchange for goods and services subject to that tax.

Just recently, in a move aimed at paving the way for more potential fintech investments into the country, the Australian government has finally provided a legislative end to the double taxation of Bitcoin and other digital currencies.


Bulgaria was the first European Union member state to officially recognize Bitcoin as a currency, instead of treating it as a gold-like commodity.


Bitcoin is currently classified as an intangible asset. It is expected to be regulated under Anti-Money Laundering and Counter-Terrorist Financing laws. This provision is yet to become active, but when it is, ‘dealers in digital currency’ will be regulated as Money Services Businesses.


In 2013, the People’s Bank of China (PBOC) banned all financial institutions from handling Bitcoin-related transactions, prohibiting pricing in, buying, and selling of Bitcoins. Trading Bitcoins by individuals is still legal in China.

The Chinese government has been cracking down on cryptocurrencies use in their country, urging multiple exchanges to stop withdrawals, without providing any lawful paperwork. In September 2017, all Chinese virtual currency exchanges were urged to stop trading by the end of the month in order to remain compliant with the regulations.

Additionally, Chinese regulators introduced bans on cryptocurrency exchanges and ICOs. However, while those bans were undoubtedly harsh and unprecedented, they weren’t able to completely stamp Bitcoin out of China. In their latest attempt to do so, Chinese regulators will begin adding both onshore and offshore platforms related to virtual currencies and ICOs to the Great Firewall.


The Estonian Ministry of Finance has ruled that there are no legal obstacles to use Bitcoin and other similar cryptocurrencies as a payment method. Traders must identify the buyer when establishing a business relationship or if the buyer acquires more than €1,000 worth of the currency a month.


The Finnish Tax Administration decided to treat Bitcoin transactions as private contracts equivalent to contracts for difference for tax purposes. If you’re buying goods with Bitcoins or converting BTCs into flat currency, any increase in price will be taxable, while losses are not tax-deductible. Mined Bitcoins are considered earned income.

Finnish Central Board of Taxes has gone against the conventional EU approach and classified all services around Bitcoin and other similar digital currencies as financial services, making them VAT exempt.


In 2014, the French Ministry of the Economy and Finances has outlined regulations to be put in place for financial institutions and users of digital currencies. The regulations required Bitcoin distributors to limit the level of anonymity by identifying and verifying their users. The treatment of digital currencies is required to be clarified for tax purposes as well, with currencies becoming subject to capital tax gains. A threshold of €5,000 was proposed on the margin tax to allow the population to try, invest and develop business with Bitcoin before paying tax.


In Germany, Bitcoin is recognized as private money. This decision enables users of Bitcoin to continue using it without any interference from the government and gives the authorities an opportunity to tax the profits of companies using the digital currency.


According to a 2014 statement from the Central Bank of Iceland, transactions with Bitcoins and other digital currencies are subject to restrictions.

In 2017, the Central Bank introduced a new set of rules, according to which wide and general exemptions were granted from the previously imposed restrictions.


As of 2017, the Israel Tax Authorities view Bitcoin as a taxable asset, instead of currency or financial security. According to this policy, every time a Bitcoin is sold, the seller has to pay a capital gains tax of 25 percent. Miners and traders are treated as businesses, which makes them subject to corporate income tax and a 17 percent VAT.

Just recently, it was reported that Israel is to begin taxing Bitcoin and other cryptocurrencies as property. This means that it will be taxed by the capital gains tax, which in Israel stands at 25% for private investors, while a marginal rate for businesses stands at 47%. As cryptocurrencies are considered an “intangible asset”, private investors won’t have to pay VAT, while the businesses will still be subject to VAT.


Japan is one of the very few countries where Bitcoin is recognized as a legal form of payment. In 2017, the tax on Bitcoin trading was eliminated and Japanese financial authorities started issuing cryptocurrency exchange licenses.


According to the Central Bank of Jordan’s current policy, banks, exchanges, financial companies and payment service companies are prohibited from dealing in Bitcoin and other digital currencies. Both the Central Bank and the government of Jordan issued warnings discouraging people from using Bitcoins, but small businesses and merchants still accept them.


Mexican parliament is currently considering a legislation aimed at regulating the country’s rapidly-growing financial technology sector, which includes Bitcoin and other cryptocurrencies. The legislation proposes a clear set of rules for fintech companies, aimed at reducing costs and driving competition in the sector. It is also set to ensure financial stability and prevent money laundering and financing of extremists.


According to the Slovenian Ministry of Finance, Bitcoin can neither be considered a currency, not an asset. Bitcoin transactions are not subject to capital gains tax, but Bitcoin mining and businesses selling goods and services for the digital currency are taxed.


When it comes to acceptance of Bitcoin and other digital currencies, the Swedish jurisdiction is one of the most favorable in the world. The Swedish Financial Supervisory Authority has publicly proclaimed digital currencies like Bitcoin a legitimate way of payment. Moreover, the Swedish tax authority has even decided to tax Bitcoin mining depending on how successful it is.

Certain businesses, which are mainly exchanges, are required to file an application for a license and comply with all the regulations applicable to more traditional financial service providers, such as Anti-Money Laundering and Know Your Customer policies.

Countries in which Bitcoin is not regulated


Even though the Minister of Finance indicated that there is no immediate need for the government to intervene in the Bitcoin system, there have been talks about a new legislation which is set to strengthen government control over Bitcoin and other cryptocurrencies.


Back in 2014, The Central Bank of Brazil issued a statement concerning cryptocurrencies, in which it stated that Bitcoin and other digital currencies are not to be regulated. A few years later, the President of the Central Bank went on to describe Bitcoin as a pyramid scheme.

China: Hong Kong

The Chief Executive of Hong Kong Monetary Authority (HKMA) deemed Bitcoins a virtual commodity, stating that the HKMA will not regulate the cryptocurrency.

The Secretary for Financial Services and the Treasury of Hong Kong has said that the existing laws don’t directly regulate Bitcoins and other similar digital currencies, but provide sanctions for unlawful acts involving those currencies, such as fraud and money laundering.


In 2014, Superintendencia Financiera de Colombia stated that the use of Bitcoin is not regulated. Just recently, the same governing body released another statement, in which it said that the Colombian government still doesn’t authorize or legalize Bitcoin for financial transactions. However, as of today, the country has no plans to make it illegal.


The use of Bitcoins and other cryptocurrencies is not regulated in Cyprus.


Denmark’s Financial Supervisory Authority (FSA) declared that Bitcoin is not a currency and stated that it does not fall under its regulatory authority.


There are no specific regulations regarding Bitcoin and other digital currencies in place in Greece.


According to a statement made by the Deputy Governor of the Reserve Bank of India, IRB neither regulates nor supports Bitcoins. Although Bitcoin is not banned in India, it is forecasted that it will not become fully legal without a suitable organization to monitor all cryptocurrency-related activities.

In the end of 2017, India’s Ministry of Finance compared Bitcoin and other cryptocurrencies to ponzi schemes and warned investors of the potential dangers.


As of today, Indonesian authorities haven’t outlined and detailed policies of regulating or banning the use of Bitcoin.

However, the Bank of Indonesia has recently issued a statement warning potential investors against of selling, buying and trading cryptocurrency. The statement went on to state that any virtual currency is not legitimate within the country.


The Bank of Lebanon was the first in the region to issue a warning about Bitcoin in 2013. Since then, there has been little to no action from the country’s officials regarding digital currencies. The only notable exception being the Lebanese Central Bank’s Governor criticizing Bitcoin and other digital currencies. He labeled them unregulated commodities, stating that they should be prohibited.


The Central Bank of Lithuania has issued a statement, warning the population of the potential risks involving operations with digital currencies. The main sentiment was that Bitcoins are not regulated by the Lithuanian or European authorities. The statement also mentioned the possibility of regulations, but no action is likely to take place.


In 2014, Malaysia’s Central Bank announced that it doesn’t consider Bitcoin a legal tender and it has no intentions to regulate it.

However, Bank Negara is currently shaping its new stance on cryptocurrencies. Despite an overall positive attitude toward Bitcoin, there are rumors that the Malaysian government might still ban cryptocurrency. The decision is set to be made by the end of 2017.

New Zealand

According to the Reserve Bank of New Zealand, non-banks don’t need their approval for operations that involve storage and transfer of Bitcoins and other digital currencies as long as they don’t involve the issuance of physical money.


In 2016, Bitcoins were deemed ‘not illegal’ by the Federal Tax Service of Russia.

However, since then Russian Central Bank stated that it is ‘categorically’ against the regulation of digital currencies as real money, as a means of payment for goods and services and against equating them with foreign currency.

Later, President Putin condemned Bitcoin and called for a ban of all digital currencies and the Deputy Finance Minister told reporters that cryptocurrencies are very likely to be outlawed. [replace the rest] However, Russian regulators have completely changed their minds since, with reports emerging that Bitcoin will be legal, while mining will be regulated. Since then, the Russian Ministry of Finance was cited saying it will legalize cryptocurrency trading on “official” exchanges.


The Monetary Authority of Singapore (MAS) has previously issued statements of no interference policy and a warning to potential users of Bitcoins and other digital currencies. In a recent interview, a MAS official stated that the Central Bank still has no plans of regulating the cryptocurrencies, but it will keep an open mind. He also established the necessity of introducing Anti-Money Laundering control in the near future.

The Inland Revenue Authority of Singapore has issued a series of tax guidelines regarding the use of Bitcoin, according to which BTC transactions might be treated as a barter exchange and taxed accordingly. Businesses dealing with Bitcoin exchanges will be taxed based on their BTC sales.  


Initially, Bank of Thailand discouraged the population from using Bitcoins, warning potential investors of the risks involved. But it has since softened its stance, ordering a study on the cryptocurrency.

According to a ministerial regulation, Thai Bitcoin exchanges are required to have a Thailand Business Development Department e-commerce license and only facilitate exchanges of digital currencies for Thai Baht. There are also Know Your Customer and Customer Due Diligence policies in place.

The Netherlands

Digital currencies such as Bitcoin don’t currently fall within the scope of the Act of Financial Supervision of the Netherlands.  


The National Bank of Ukraine has recently published a statement, in which it clarified that the Ukrainian hryvnia is the only one currency that can be legally used in the country. The Bank also stated that the status of Bitcoin in Ukraine is further complicated by the lack of a unified classification of the currency in the world and it does not publicly support any of the definitions made in other jurisdictions.

United Kingdom

The UK government has stated that Bitcoin is currently unregulated and is traded as ‘private money’ for most purposes, including VAT. This means that no VAT is imposed when Bitcoin is exchanged for sterling and other currencies. However, suppliers of any goods and services sold for Bitcoin and other digital currencies need to pay VAT. Profits and losses on digital currencies are subject to capital gains tax.

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Cryptocurrencies – The Future of Money?

In 2009, when the Bitcoin whitepaper came out, the idea was clear: there was a need to create a decentralized currency system that would free the ‘masses’ from the firm grip of central banks and other financial institutions.

Bitcoin was born, becoming the currency of the people, effectively making fiat the currency of governments. Almost a decade later, Bitcoin has surged in global popularity and has given birth to over 1,500 other alternative blockchain-based coins.

The digitization of money is inevitable, and ironically, governments (who have been the biggest threat to Bitcoin and other cryptos) are now looking into issuing their own cryptocurrencies

National Cryptocurrencies

If the first decade of cryptocurrency has been about adoption and regulation, then the trend of the coming decade promises to be about national cryptocurrencies.

Like other cryptos, national cryptocurrencies are based on the distributable ledger technology (blockchain), but they are issued and backed by national governments.

The only issue with national currencies is decentralisation because naturally, governments are reluctant to lose control of the monetary system.

But while national cryptocurrencies defeat one of the major appeals of blockchain technology, they also pave the way for a more efficient monetary environment.

Venezuela and Cryptocurrencies

In appreciation of the great advantages and potential of the blockchain technology, some central banks are on the verge of releasing their national cryptocurrencies, while many others have set definitive deadlines for their projects.

Venezuela though was the first to take action, releasing the Petro Crypto in February 2018. The Petro cryptocurrency was introduced to minimise the impact of US sanctions on the country as well as to enhance access to international funding and supplement the free-falling Venezuelan bolivar currency.

The Petro was designed to be backed by Venezuela’s abundant reserves of natural resources, such as oil, gas, diamonds, and gold.

The Petro received a national backing in May 2018 when the country’s President announced that a youth bank would be established which will be exclusively funded using the national cryptocurrency.

Iran and Cryptocurrencies

Another country that has been inspired by Venezuela is Iran, which coincidentally, also faces sanctions from the US that threaten to cripple its resource-dependent economy.

The Central Bank of Iran announced two months ago that it was finalising plans to launch its own cryptocurrency backed by Iranian rials.

The US sanctions will mean that Iran is cut from international payment systems, but the cryptocurrency, which utilises the blockchain technology, will help the country facilitate the transfer of funds throughout the world.

Other countries that are in advanced stages of launching their own cryptocurrencies include Japan, Sweden, Russia, Israel, Tunisia, Senegal and Estonia.

The Future of Cryptocurrencies

Clearly, national cryptocurrencies will be a predominant trend in the near future. But this comes with some pros and cons. In terms of currency distribution, cryptocurrency is safe and easier to distribute than traditional cash.

National cryptocurrencies will also allow for the faster settlement of payments and potentially, even much cheaper transactional costs. Still, a blockchain based digital currency carries with it some disadvantages.

To launch a national cryptocurrency would require significant investment, which may not be a justifiable use of taxpayer money. Another disadvantage would be slow payment authorisation, something that is continually being innovated upon in the crypto world; but there would not be such time freedom with a national cryptocurrency that will be used widely. The inefficient use of electricity for small payments is also another factor to consider.

Final Word

Ultimately, central banks are mandated to ensure financial stability by the efficient use of their monetary policy. National cryptocurrencies only make it easier for central banks to achieve this because monetary policy will directly be transmitted to firms and households.

As blockchain technology continues to improve, it only means that national cryptocurrencies will continue to solve the current constraints of the conventional monetary system. Also, check out our post on how cryptocurrency works in general.

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Different coins of crypto currency on a dark background

How to Invest in Cryptocurrency With 5 Simple Steps

A new form of investment has been stirring up the web zone these days. We hear the terminologies (which often sound very complicated with all its jargon) like cryptocurrency, online investment, or digital wallet. We cannot help but wonder if this is an excellent money-making venture for us. Others are even curious about how to invest in cryptocurrency since some people claim that they are earning from it.

This article will delve into the basics of investing in Bitcoin as it is the most popular cryptocurrency to this time being. Investing in cryptocurrencies – or investing per se – requires extensive researches and continual practice. We zero in on what Bitcoin is and if it is worth investing in this year.

What is Bitcoin?

Bitcoin is a digital currency – meaning there are no physical coins. You purchase this on a universal system that controls and tracks it. There is no regulating body like a government, for instance, that controls it. Just imagine that it is a system with humongous accounting books that record who owns what and how much owns what. Coins can be bought in a matter of minutes. Presto! You are a viable investor.

To reiterate, Bitcoin is not a physical tender. So the question is: how do we buy them? A primary method is to buy from a Bitcoin exchange or invest in a fund. If you are interested, try to learn more about “Satoshi” and get a free wallet app (this will help in understanding the necessary procedure). Remember that you should never invest significant amounts in something you do not fully understand.

Often, we are skeptical when making simple purchases online. This is even the case when there is a physical exchange (product or service). What more for investing online digitally! Bitcoin and investing in Bitcoin is legal unless you partake in scamming or coin mining. Any form of investment is healthy and encouraged.

How to Invest in Cryptocurrency

Assuming that you have learned and researched what Bitcoin is really about. You may now start buying Bitcoins. Keep tabs on these requirements that you need to prepare and take note before purchasing.

1. Get a digital wallet. Now you know that Bitcoins are not coins; so digital wallets are not leather wallets. They are online services that allow electronic transactions. It is used for purchases using a computer or a smartphone. Your bank account will also be linked to this digital wallet.

2. You will need to verify your identities through the wallet. You should secure personal documents like passport, driving license, or social security number during verification.

3. As this is the digital world, hackers may pose a critical problem. Transact only insecure networks.

4. You will also need a Bank Account, debit card, or credit card to link. These will fund your transactions.

5. Visit Bitcoin exchanges from online market places where you can exchange conventional currency to Bitcoins.

Is investing in cryptocurrency worth it?

Well, for one, the market is still young, so there is an expectation that prices will go higher. Cryptocurrency is also the new pink. This trend-setting investing is seen to be the medium of exchange in the future – Forbes said.

Although you will stumble upon many pros and cons in this kind of investment, when you start digging for knowledge about cryptocurrencies, its ten years of existence and operation cannot be denied. It is still in the trend this year. When proper timing on buying and selling is mastered, you can often buy low and sell high.

Now that you know how to invest in cryptocurrency, this will no doubt make you think that it is an interesting way to make money.

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Managing Your Business Finances

To anyone not directly involved in finance, even the most basic financial management concepts can evoke a feeling of panic!

However, when you decide to start a business, you will need to keep a close eye, and a hand, on your business’s finances, if you expect any measure of long-term success.

Simply put, It’s your responsibility, as a business owner, to have a handle on your finances!

Here are a few concepts, simplified, that should help you to understand and manage your business’s finances:


Income sometimes also referred to as gross income, turnover, or revenue, is the total amount of sales made, before any deductions are factored in.

Keeping track of this is a simple matter of keeping records of your sales. Simple. Moreover, by preparing and keeping records of invoices, it is a simple matter to calculate your sales. Some companies, particularly those engaged in long term contracts, issue a proforma invoice at the start of a project, in order to get the income “on the books.” A final invoice is then submitted at the end of the project.


Expenses are almost as simple as income. Basically, your business has two kinds of expenses – direct expenses (salaries or payments to contractors) and indirect expenses – your overheads or running costs.


This is what we are all in business for – profits. Breaking even is a milestone, but for a business to grow, it needs to make a profit.

The simplest form of calculation would be sales less direct expenses. This figure is known as gross profit. To calculate your business’s net profit, you need to deduct your indirect expenses from the resulting figure.

Finally, to calculate the actual profit your business is making, you need to deduct income tax from this last figure.

If you have an amount left, you have made a profit. Also fairly straightforward when you think about it!

Assets and liabilities

Assets of a business are divided into two categories: so-called liquid, or short-term assets, and long-term assets. Generally, short-term assets are your bank balance (the cash you have on hand) and account receivable, or the money your clients still owe you.

Long-term assets are purchases, such as buildings, vehicles, or equipment, that are the property of the business, and that are retained for a long time. Note that assets are subject to what is known as “depreciation” meaning that they decrease in value over time. This decrease should be factored into your running costs or indirect expenses.

Liabilities, on the other hand, are any amounts of money that your business owes, either short or long term. Vehicle and asset finance falls under this category, as do loans, credit agreements with supplier’s etcetera.


Capital is the money that you put into, or need to put into, your business in order to start and run in.

Cash Flow

The last concept, and probably the most critical, is cash flow. This is the in and out flow of money in your business, and keeping a tight grip on this is probably the most important thing you will do for your business!

Consider this: your business is set to make a $ 5 000 profit, on paper. However, your suppliers require 30-day payment, and your client only pays you after 60 days. Essentially, if you owe your suppliers $ 2 000, you will need to carry this expense for a full 30 days after it becomes due, before you recoup it – something few new businesses can afford to do!

So keep a firm grip on cash flow, as well as making sure you understand and monitor your firm’s financial status, and you should be fine. Ignore it, and you could be in trouble!

Our expert consulting teams can help by providing custom guidance to help alleviate the components of your business that are holding you back from doing what you do best. Our teams can also help you build your business and plan for future goals.

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    Search Engine Optimization Consulting – Choosing Keywords

    As a professional practicing search engine optimization consulting, one of the keys to your success is to have a thorough understanding of how to go about finding, and then selecting the proper keywords that you want to target and then eventually get ranked for in the search engines.

    When it comes to keywords, it’s actually possible to make it to page one of the search engine results for any keyword you choose. But before you jump for joy, call your wife, and crack the champagne you need to remember something -Some keywords are going to be a LOT harder to rank for then others.

    If you have time, money, knowledge, and lots of patience you can get to page one of Google’s results for terms like “business”, “credit cards”, or even “shopping”, but in reality most of our consulting clients don’t. So how do we get a new website to start ranking well in the search engines then? This is where you, the keyword knowledgeable SEO consultant steps in.

    You see for every main keyword like “marketing” there will be thousands more related phrases that include that main keyword. In the SEO consulting world these related phrases are known as long-tail keywords. If we stick with our example keyword “marketing” some related long-tail keywords might be “Marketing in China”, “Internet Marketing Firms”, “Marketing Consultants”, etc, etc. Can you think of any others?

    By now I’m hoping that you’re starting to understand that there are literally thousands of keyword variations for each main keyword. The good thing about this for you and your search engine consulting clients is that it’s much easier to get listed on page one of search engines if you build your SEO campaign around these long tails.

    Ok this is all swell and dandy but how do you generate a list of long tail keywords? Well lucky for all you internet consultants out there our good friend Google offers a free browser based keyword tool that does it all for you.

    All you have to do is go to the Google keyword tool, enter your main keyword like “marketing”, select the region you want statistics for, and then press submit. Presto! Google will return a nice long list of long-tail keywords related to whatever you typed in.

    If you want to take it a step further and generate even more long tails for your keyword master list then take one of the more popular phrases that it returned, for example “marketing firms” and then put that back into the keyword tool. Can you see the power in this?

    So there you have it. If you want to do well in search engine optimization consulting you’re going to need to understand keyword research. Being able to generate a solid list of keywords is key – you now should understand how to.

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      Strategy VS Tactics: Answer These Questions To Grow Your Consulting Business

      Do you ever feel like you’re running around in circles in your consulting business?

      Like everything you’re doing doesn’t really connect — and you aren’t making the progress you want towards your goal?

      Believe it or not, many consultants run their business this way.

      They’re chasing the next shiny object, latest marketing tool without wondering how it fits into their long-term goals.

      And that’s if they have a specific long-term goal in the first place.

      Your long term goals and strategy come first.

      Your tactics — which include tools, channels, technology, etc — come second.

      By the end of this post, you’ll understand the critical difference between strategy and tactics — and determine your own strategy (and tactics) so you can get clear on your next steps to grow your consulting business.

      Strategy VS Tactics: How To Determine Your Strategy

      First, let’s define strategy.

      Strategy: a plan of action or policy designed to achieve a major or overall aim.

      Your business strategy is your overall plan to achieve your goals.

      Example: Leslie is a management consultant who specializes in serving manufacturing companies. The overall aim of her pricing strategy is to implement ROI-based fees which will help her raise her prices.

      In consulting, you’ll need a few different strategies for different goals that you have.

      For example…

      • Do you have a strategy for your marketing?
      • Do you have a strategy for building your consulting practice?
      • Do you have a strategy for raising your prices?

      These strategies cover different areas of your consulting business.

      The way to determine your strategy is to ask yourself the right questions.

      By answering questions like…

      • Where do you actually want to go with your business?
      • How are you going to differentiate your business?
      • Who are your ideal clients?
      • What’s the best way to reach them?
      • What is the message that you’re going to use to get their attention and their interest?
      • How are you going to package and position your services in a way that will resonate with your ideal clients?

      …by answering these questions, you’ll learn if you have a strategy — and how clear and intentional that strategy is.

      If you don’t have answers to these questions, you can’t choose the right actions to take — your tactics.

      How To Choose The Right Tactics

      Now, let’s define tactic.

      Tactic: an action carefully planned to achieve a specific end. – Oxford Dictionary

      Tactics are the concrete, detailed steps you take to reach that end.

      In our example, remember that Leslie is a management consultant who serves manufacturing companies.

      Her pricing strategy is to double her income without working more hours — and ROI and value-pricing is how she plans to do that.

      Now that she knows her overall goal, she can think of tactics to implement and achieve this goal.

      • What specific questions should she ask her clients? The question becomes: which questions help identify the ROI she can create for her clients?
      • How should she structure her proposals? The question becomes: what is the tangible value her clients care about, and how can she make that prominent in her proposals to justify an ROI-based fee?
      • What should she put on her website? The question becomes: what elements position her as the industry authority who’s able to command ROI-based fees?

      Do you notice a pattern here?

      Your strategy serves as a “filter” for your tactics.

      Whenever you’re intrigued with a new channel, technology, script, template, etc — ask yourself:

      “How does this help me fulfill my strategy?”

      If it does, then it makes sense to implement that tactic.

      But if it doesn’t, you can safely ignore it because it’s not helping you reach your goals.

      Do You Help Your Clients With Strategy?

      Strategy consulting is when you provide strategic advice to your clients on specific topics.

      It’s one of the highest forms of value you can provide for your clients because it will help clients both define and reach their goals.

      Example: Leslie has successfully positioned her consulting business as an industry authority by using a thought-leadership marketing strategy.

      Now, clients are reaching out to her for help with their HR strategy. Her clients, new tech-startups, need her help with talent retention. They want to hire her for advice and an overall plan on how they can keep their employees happy.

      Notice how they’re hiring her for advice and a plan on their strategy. They’re not asking her to implement specific tactics like conducting employee interviews.

      Instead, they’re engaging her at a higher level. Leslie will be the one advising her client’s HR teams on what they should be doing and why.

      And the higher the level of value you provide, the more value you can capture with your consulting fees.

      It’s often the strategy that actually determines the tactics. The strategy you help create with your clients will determine which tactics they use.

      As a consultant, you position yourself as their trusted adviser by advising on strategy, not by implementing tactics.

      Imperfect Action: What’s Your Strategy?

      It’s time to think about the strategy you’re using in your consulting business, and the tactics you’re using to carry out your strategy.

      First, describe your strategy in 3-4 sentences. What are you trying to achieve? What is your long-term goal? What does your desired future state look like in your business?

      Second, write a list of your tactics. What are you doing on a daily or weekly basis to fulfill your strategy? What different tools are you using? Is what you’re doing actually connected to your strategy?

      Doing this exercise will help you get clear on your destination — and the steps you’ll take to reach that destination.

      Focusing on tactics is easy. It’s fun. It’s immediate.

      But if you get clear on your strategy first — and then focus on your tactics — you’ll make far more progress on your business goals.

      And if you’re advising your clients on strategy instead of tactics, ensure you are capturing your fair share of the value you’re creating. Pricing models like value-based pricing will net you greater fees than charging hourly.

      Are you looking for help with your strategy to grow your consulting business?

      In our services, not only will we help you define and develop your strategy — but we’ll coach you through every step with a customized plan.

      Learn more about our services here — or, schedule your Consulting Success Growth Session where we’ll talk about you, your business, and your next steps to skyrocket your revenues.

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        In today’s world of mass digital media, giving a referral is as simple as posting a social media link. At Investment Solutions, we know that 90% of your prospective customers make buying decisions based on reviews and online mentions of your business. Digital reputation management is the process of monitoring, identifying, and influencing your digital reputation and credibility online.

        Every day, people are reviewing businesses with star ratings, comments, social media posts, blogs, and much more. Knowing what people are saying about your business is invaluable. Reputation management provides you with a chance to counter negative feedback. It also creates an opportunity to promote the experience of your positive mentions. An effective online reputation management strategy can provide you with new opportunities and insight on increasing brand awareness.

        The importance of having an online reputation management process in place is undeniable. Here are a couple of reasons to consider starting one:


        The reputation of a business is essential to its survival. Having the trust of your clients is a major component of success. Your clients discuss your business with friends and family. When they have a problem, they will spread the word about their experience. Data shows that if an organization has a good reputation, consumers will find that company more credible than its competitors. Even when competing businesses offer the same products or services for different prices!


        Having professional staff is the foundation for a successful workforce. In today’s world, 92% of companies are using social media for recruiting. A company’s reputation matters for employers more than ever before. It can have serious impacts on the quality of recruitment. Top applicants will research your company before they accept a position. Statistics show that 83% of respondents in a survey reported that they’re influenced by reviews when making application decisions. 46% of respondents report that company reputation influences their job offer decisions. 75% of people said they wouldn’t be willing to work for a company with a bad reputation — even if those without jobs.


        Having a successful corporate image is a necessary marketing tool for your company. If you warm the hearts of your customers, then you can expect them to always remember you. You won’t need to spend time trying to convince your potential customers to use your products or services. With a strong digital image, customers will continue to support your company.

        Google your business name and scroll through your results. Scan the first few pages of results. Did you find information that doesn’t accurately represent your business? If you did, we’re glad we were able to bring this to your attention. In a recent Moz study, research suggests that businesses risk losing 22% of business when potential customers find a negative article on their first page of search results. That number increases to 59% lost business with three negative articles. At four or more negative articles, it goes up to 70%.

        Don’t panic! You could spend every day searching your own company to see if something new came up. This could take you hours every day and you would continue to stumble over old things that were already known about. Investment Solutions provides a tool that runs 24/7 to scour public web space to find mentions, reviews, and websites that talk about your business.

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