The cryptocurrency was introduced to the world 13 years ago but still feels like it is in its gold rush phase. As more and more people are lured toward the alluring universe of cryptography, it becomes more important to gain knowledge about the crypto sector. In today’s world, nearly 5000 cryptocurrencies are being circulated in the market and many more are to come. However, let us take you back to the origin of the world of crypto and give you an easy-to-understand guide regarding cryptography.
An Easy-To-Understand Guide To Cryptography
What is cryptocurrency? In 2008, the mystifying person or a group, Naomi Satoshi created the first cryptocurrency. This currency was called the bitcoin. Ever since then, all the currencies to come are called “altcoins”and the second largest and most popular currency is the Ethereum.
The reason behind the popularity of cryptocurrency was due to the security of trade it provided. Cryptocurrency is a digital asset you own that can be used to perform trades between two parties without having to involve a central monetary official party such as banks or governments.
Things You Need To Know
As the famous proverb goes “all that glitters is not gold” we can take it quite literally in this example as all bitcoins that you mine may not be the great thing you think it is. A survey held in the year 2021 proved that a third of investors had little to no knowledge of the crypto sector when they first got involved. Hence, if you are looking to invest in cryptocurrency and cryptography, you need to know some important factors about crypto.
You Still Need To Pay Tax On Your Profits
You may think that since the banks and government are not directly involved when there is an exchange, you are not entitled to pay any tax. However, this is one mistake all investors make. You need to pay either Income Tax or GST on the profits you make depending on how the profits are made. Whether you are trading or profiting off of investments, you may have to pay 10-20% tax. This is a very difficult and complex idea to grasp. As an investor, we advise that you rather hire a crypto tax agent instead. Find crypto tax services in Sydney from Stephan Cole FCPA. You will not be disappointed with what they have to offer!
The Risk Factors Involved In Investing In Crypto
One thing you need to have is thorough research on the risk factors involved in the sector you are investing in. Ever since its introduction in the market, bitcoin has seen eight significant crashes where the value of bitcoins fell significantly in a day. Hence, do your research!
You Need Better Hardware And Software
Long gone are the days you could mine bitcoins on your PC. Now you need heavy equipment and very powerful hardware that will enable you to mine bitcoins. However, this hardware is not easy to buy and requires a large amount of electricity and energy to work. This greatly damages the environment.