It’s important to note that Bitcoin is just one type of cryptocurrency; there are many others (such as Ethereum and Litecoin). Ripple, etc.) is a form of virtual money or exchange that relies on cryptographic protocols to protect its users and the integrity of its Transactions. Bitcoin, the cryptocurrency, now relies on a technology called a blockchain. Due to cryptocurrency’s youth and widespread misunderstanding, several misconceptions have arisen.
Binocs helps users to understand the myths about cryptocurrencies. In addition, Binocs is the best app for portfolio tracking since it centralizes all of your trades in one place. This post hopes to dispel some myths surrounding cryptocurrencies and blockchain technology by providing a balanced and informative review of the topic.
Myths Concerning Cryptocurrencies
Myth 1 Cryptocurrency Is Tax-Free
No government or banks are interfering, so yes, it is entirely decentralized. However, this does not disregard the possibility that digital currency avoids taxation. It’s a standard business transaction, and you are subject to tax on the occasion of sale or receipt of payment in cryptocurrency. A cryptocurrency trader in India must pay 30 % of any profits from selling their digital currency, more outstanding than 10 lakh rupees. No minimum holding period is required, as the investment focuses on generating profits in the near term. However, you will be taxed 20% of your long-term gain if you hold on to your investment for more than two years.
Myth 2: People don’t give cryptocurrency any value because it’s not “real” money
There is no physical asset being exchanged. Hence, this is the biggest fallacy regarding cryptocurrency they have as collateral. Bitcoin’s system has been stable since 2008 because its traders are confident in the currency’s intrinsic value. Cryptocurrencies will remain in circulation as long as a community of supporters recognize their worth.
Myth 3: These Products Are Illegal Virtual Currency
Although countries including Bolivia, Russia, Algeria, and Ecuador have banned the currency, EU countries, G7 countries, and the United States of America have all recognized cryptocurrencies as legal tender, as has Trinidad. Former Indian Finance Minister Arun Jaitley mentioned investigating Blockchain technology to encourage digital and secure transactions in Budget 2018-19. In India, buying and selling cryptocurrencies is not illegal and is booming.
Myth 4: Most Criminals and Illegal Activities Deal in Cryptocurrencies
There has been no regulation of cryptocurrencies, although the 2013 Silk Road Raid exposed the usage of millions of dollars’ worth of Bitcoin for human and drug trafficking. In addition, there have been occasions when criminals used cryptocurrency to acquire funds. However, the prevalence of this practice has been much diminished because of India’s mandated KYC (Know Your Customer) requirements for trading in cryptocurrencies.
Myth 5 Cryptocurrencies Can Easily Be Hacked
Trading on a cryptocurrency exchange works the same as trading on any other business. One of the only ways to prevent the theft of cryptocurrencies is to increase the security of digital wallets. Make sure your money is protected and that you can make secure Transactions.
In conclusion, the Indian cryptocurrency market is mainly uncharted at the moment. Investors can make a more informed decision about whether or not to enter the virtual currency market if they have access to more information on the topic. Before deciding whether or not to invest in Bitcoin or another cryptocurrency, you should carefully consider the benefits and risks associated with the investment, the myths surrounding cryptocurrencies, and the laws governing their use and taxation in India. Leave all your concerns at Binocs, use their software and get everything sorted in one place.