cryptocurrency

Everything You Need to Know About Dogecoin

March 2, 2021 By Vicky Monroe Leave a Comment

Dogecoin is a type of cryptocurrency that was created by Billy Markus and Jackson Palmer mostly as a joke. The coin has an image of a dog on the front and was inspired by a popular internet meme that features a Shiba Inu.

Palmer and Markus never expected dogecoin to catch on, but it’s recently grown to become the 10th most valuable crypto. To help you decide whether or not dogecoin is a good investment, here’s everything you need to know about this unique currency.

What is Dogecoin?

Dogecoin is a type of cryptocurrency that’s stored in a digital wallet. You can trade it, hold it as an investment, or spend it online.

Most retailers don’t accept cryptocurrency because it’s more volatile than fiat money like USD. But you can still use it to purchase gift cards through services like Bitrefill. Many fans of dogecoin also use it to give tips to online content creators to thank them for their hard work.

Is Dogecoin a Good Investment?

Dogecoin has recently surged in popularity. Many celebrities like Elon Musk and Snoop Dogg have started tweeting about it, which has created some buzz and caused its price to increase.

Everybody’s talking about dogecoin, so it may seem like a good time to invest before prices go up even more like they did with bitcoin. However, there’s no guarantee that dogecoin will continue to rise.

Many people believe that part of why bitcoin is in such high demand is because the supply is limited. There are only a certain number of bitcoins, which may be driving up the price.

However, dogecoin is uncapped, so the supply isn’t limited. Experts believe that this may prevent it from becoming as valuable as bitcoin and other major cryptocurrencies.

It’s also worth keeping in mind that cryptocurrencies are considered risky investments because prices rise and fall in a pretty volatile way. So even if you think dogecoin is the next big thing, you definitely shouldn’t pour all of your money into it.

If you want to purchase dogecoin, it’s wise to keep it as a small part of your portfolio and allocate most of your savings toward traditional, proven investments.

How to Get Dogecoin

You can either get dogecoin by mining it or purchasing it through an exchange. Here’s a closer look at both options.

Mining Dogecoin

If you’re not familiar with mining, it involves running software on your computer that confirms the accuracy of recent cryptocurrency transactions. This helps secure the network and prevents people from lying and claiming they have more coins than they actually do.

In exchange for performing this task, you may get a small reward. But your computer has to be the first to document the transaction and add it to the blockchain, so you’re not guaranteed any dogecoins. It’s kind of like playing the lottery, so you can’t go into it expecting to win every time.

However, the great thing about mining dogecoin is that you have a much higher chance of winning than you would with bitcoin. It also takes less computer power and time, so it’s easier to get started with.

Buying Dogecoin

If mining dogecoin sounds like too much work, you can purchase it on exchanges like Binance and Kraken.

Unfortunately you can’t buy dogecoin with USD. So you’ll have to purchase another cryptocurrency that’s listed as a pairing and trade it for dogecoin.

Wrapping Up

If you’ve never bought in cryptocurrency before, dogecoin is a great coin to start with. But don’t get carried away by the hype and invest more money than you can afford to lose.

Even though prices have been on the rise recently, they could fall at any time. Cryptocurrency is a pretty volatile investment, so you should always exercise caution when deciding how much to buy.

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Here’s What To Expect From Cryptocurrency in 2020

January 10, 2020 By Tamila McDonald Leave a Comment

The cryptocurrency market is largely about speculation. It is dramatically impacted by what investors (both current and potential) think will happen in the market. As a result, cryptocurrencies have had some incredible highs and shocking lows over recent years. The volatility makes it hard to figure out what you can expect from the market in 2020. However, by understanding various trends and upcoming events, you might be able to predict a bit of what the future will hold. If you’re wondering what you can expect from cryptocurrency in 2020, here’s what you need to know.

Companies Are Backing Out Of The Facebook Libra – Here’s Why

October 14, 2019 By Amanda Blankenship Leave a Comment

Facebook has been talking about launching its very own cryptocurrency for a few months now. Mark Zuckerberg has been able to find some pretty big companies and names to back the social media crypto idea, including Mastercard, PayPal, eBay, and Visa. However, this week, many companies and investors have decided to back out of the Facebook Libra.

About the Facebook Libra

If you’re interested in cryptocurrencies, chances are you’ve already heard about the Facebook Libra, also known as GlobalCoin. The social media giant proposed the idea of its own cryptocurrency to combat unbanked individuals around the world. Believe it or not, there are billions of people without bank accounts worldwide.

In Southeast Asia alone, 438 million people (73 percent of the population) are without bank accounts. India’s population has the second largest unbanked population at 190 million. Women make up a majority of the unbanked individuals around the world (55 percent).

The Facebook Libra would help allow people to pay and be paid virtually without a bank account. As smartphones and technology have become more affordable and available around the world, it is making lower cost services available. Just about everyone has a Facebook account, making a Facebook-based cryptocurrency a viable solution.

Why Key Investors Are Backing Out

At first, the Facebook Libra was backed by 28 large companies, including Mastercard, Visa, PayPal, Stripe, eBay, and Mercado Pago. This week, those six “founding” members decided to take a step back from the project. Why?

Well, the Libra has failed to prepare to meet any regulatory standards as far as currency goes. The G7 task force produced a report that helps outline rules for G20 economies. It notes that currency like the Libra that have the potential to scale at a rapid pace could pose potential problems.

Any supporters of global stablecoins, such as the Libra, will need to be legally sound. Additionally, the companies must be able to ensure consumers are protected and any currency is not being used to launder money or fund terrorist organizations.

The report stated, “The G7 believe that no stablecoin project should begin operation until the legal, regulatory and oversight challenges and risks are adequately addressed.” Facebook has already warned investors that regulatory scrutiny may delay or completely stop the launch of the Libra.

On top of that, any loss in confidence where the cryptocurrency is concerned could threaten global economic instability. Because of this, many of the key players have stepped out of supporting the Facebook Libra, along with any other stablecoins.

Now, the Libra has lost approximately $60 million of its initial funding after six key players backed out, leaving the future of the currency uncertain. The social media giant may find comfort in the fact that it hasn’t lost all of its supporters. It has also gained the support of tech leader IBM. But will that be enough to save it?

Readers, what do you think about the Facebook Libra and other stablecoins?

What The Facebook Libra Means For Bitcoin Trading

June 28, 2019 By Amanda Blankenship Leave a Comment

Many people were wondering whether or not bitcoin was on its way out as fast as it had made its appearance. The cryptocurrency fell below $4,000 for much of 2018. However, earlier this week, bitcoin rose over $14,000. All of this stemmed from Mark Zuckerberg’s announcement that his social media website would soon introduce its own cryptocurrency: the Facebook Libra.

About The Facebook Libra

That’s right – Facebook announced it would be dipping its toes in cryptocurrency. The Facebook Libra, as the currency will be called, will be used to send payment via Messenger, WhatsApp, and several other third-party apps.

This isn’t the first time Facebook has dabbled in digital payment. Folks in the United States have been able to send money through the Messenger app since 2015. Facebook in France and the United Kingdom began a similar service in 2017. So, why develop Facebook Libra?

Facebook founder and CEO Mark Zuckerberg wants Facebook to expand this option on an international basis. With the Libra, you’ll be able to send money to anyone anywhere, even if they don’t have a bank account. Additionally, those advertising on the site will be able to sell items and collect payments directly through their ads.

Before you start converting to the Libra, you should know a few things.

Facebook Libra is fairly stable. While bitcoin has been unstable, the Libra will be tied to bank accounts and government securities. As long as international currency remains stable, so will the Libra.
The currency will not be controlled by Facebook. The social media site isn’t known for its security, and it knows that. So, the company has partnered with larger names in finance, like Visa, to make the Libra a success.
It could be an easy way to pay (if it works). There is no telling if the Libra will actually work or take off. However, if it does, it could be one of the easiest, fastest ways to pay online.

Facebook Libra vs. Bitcoin

The Facebook Libra has not yet been released, but there are some pieces of information that allow us to compare it to other forms of digital currency. When it comes to the Libra vs. Bitcoin, these are the main differences…

Facebook, WhatsApp, and other Facebook properties will be where you can use the digital currency at first. With bitcoin, you can pay for just about anything (just about anywhere). Libra payments may also be accepted at websites within the Libra Association (a group of companies working with Facebook on the Libra). That has not been confirmed yet though.
Where the Libra is used is completely under the control of Facebook. On the other hand, bitcoin is deregulated. In some cases, it has been used to purchase black market items.
Libra is also much more centralized, meaning more people have a say in what happens with it than bitcoin. The Libra Association is projected to grow to 100 members by the end of 2020 and each member will have a say in the currency’s evolution. In bitcoin blockchain, if you own 51% or more, you have the final say.

The Rise and Fall of Bitcoin

As mentioned above, bitcoin skyrocketed this week when the mention of the Facebook Libra was made. Many people were surprised by this because bitcoin has been called a “bubble” in the past, meaning eventually it would burst and longer carry any value.

Even though it did drop in value last year (hovering around $4,000), interest in digital currency seems to continue to drive bitcoin up. Not to mention, any time there is any mention of a trade war or other political issues that may cause a decline in value of a currency, people tend to look to bitcoin as a safety net.

The rise this week can be partially attributed to the announcement of the Libra but can be tied to other occurrences as well. China and the U.S. are also in the middle of a trade war. Bitcoin is an easy way to get money in and out of China during this time.

On top of that, the Democratic Party continues to suggest a wealth tax. Presidential candidate Elizabeth Warren has proposed a 2 percent wealth tax. This may increase the desire for having bitcoin in your wallet because cryptocurrency is able to be held outside the reach of tax authorities.

Consider Currency Risk Before Investing

Before you go converting your money to the Facebook Libra, bitcoin, or any other form of digital currency, be sure to do your research. There are a number of reasons to be skeptical about investing in bitcoin.

The most important of these reasons seems to be that none of the cryptocurrencies on the market are safe. Each of them carries some type of risk. As we’ve seen with Bitcoin, the value of the currency can swing drastically in one way or the other, losing you thousands of dollars. This is possible with Facebook Libra as well. If international currency rates drop, Libra owners could lose up to 10 percent.

The risk would only cease to be a factor if you did all of your transactions in Facebook Libra, bitcoin, or other cryptocurrencies. But to eliminate that risk, you’d have to get rid of every other type of currency, which just isn’t likely to happen.

Readers, what do you think about the Facebook Libra? Would you use it?

When Do You Pay Taxes on Bitcoin and Other Cryptocurrency?

April 8, 2019 By Jackie Cohen 8 Comments

Taxation of bitcoin and other cryptocurrencies is pretty similar to the way you pay taxes on any other type of investment. And regulators are slowly but surely making it harder and harder to evade this type of tax.

You pay capital gains taxes when you sell a cryptocurrency like Bitcoin, whether you harvest into dollars or any other currency.

If you had held the cryptocurrency for less than a year, the sale is taxable as income tax; hold it for more than a year before selling it, and you pay the capital gains tax rate, which is lower.

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How to Pay Taxes on Bitcoin

The only thing related to cryptocurrency that you need to report to the Internal Revenue Service concerns sales of cryptocurrency into any other currency you get to declare a loss or gain.

(If you own any cryptocurrency funds and they paid dividends, you’d have to pay taxes on those dividends but it’s highly unlikely that a crypto fund would be paying dividends anytime soon.)

You report this activity in Schedule D of your tax return. Input the difference between what you paid for the currency and what you sold it for. If you made money, it’s a capital gain. If you lost money, it’s a capital loss.

Get all of your tax questions answered with H&R Block’s Tax Information Center!

The IRS Always Knows

Like it or not, the IRS will eventually get wind of your crypto trading profits, as it is now privy to information from any U.S. exchange you might have transacted on; the agency essentially won the right to this data in court in November.

Spare yourself the interest and penalties you might end up owing from attempting to not report capital gains on cryptocurrencies. The IRS typically takes at least six months to catch up on nonpayments, so you’ll end up owing extra money as interest or penalties.

And even if you did a cryptocurrency transaction on a site that is not based in the U.S., and move the funds into a currency other than the dollar, these sites aren’t immune to the tax treaties that the IRS has already been brokering with foreign countries.

It might take longer for the IRS to obtain information on activities on foreign sites, but eventually, the prevailing trend in the IRS’ fact-finding will play out here as well.

Although cryptocurrencies’ origins included a lack of real taxation on them — and policies to support that — slowly but surely regulators around the world are making it harder for people to dodge this type of tax.

For more information on how the IRS handles cryptocurrencies, click here.

Readers, are you still confused about whether there are taxes on bitcoin or other cryptocurrencies?

Will Bitcoin’s Rebound Return to Previous Heights?

May 14, 2018 By Tamila McDonald Leave a Comment

Bitcoin is rallying again: Over the past few weeks, the value has risen from below $6,700 in April to just shy of the $10,000 mark. However, it still has a long way to go to reach the high of more than $19,000 reached in December. The question now is: Will Bitcoin continue to rise?

Will Bitcoin Continue to Rise?

To understand whether Bitcoin will continue to rise, you first need to know why it fell so dramatically in the first place.

Over the past year or so, the cryptocurrency landscape changed. Countries began exploring regulations, and banks began restricting the use of credit cards to purchase cryptocurrencies.

Overall, these developments harmed Bitcoin and other cryptocurrencies that are available today. But then things turned around more recently with some positive events that sent the value back up again.

Positive Developments

Among the more significant of them, Goldman Sachs stated it was working on setting up a desk for cryptocurrency trading.

Regulators have also required cryptocurrency exchanges to register with entities like the Securities Exchange Commission, which provides stability and increases confidence among investors.

Intercontinental Exchange, which owns the New York Stock Exchange, is also working on a trading platform for cryptocurrencies, representing a significant step forward for the industry.

Ultimately, Bitcoin’s value is a reflection of supply and demand. And when investors’ confidence in the currency goes up, that usually brings up demand too. If all of these trends continue, Bitcoin just return to its previous highs.

But Are Bitcoin Investments Safe?

Even though Bitcoin is recovering, that doesn’t take away any of the risks. Cryptocurrencies are still relatively new, and there’s a lot yet to be worked out. For example, further regulation changes could hurt the market.

Similarly, some other types of cryptocurrencies have turned out to be scams, and this hurts the overall perception of them, impacting demand for Bitcoin.

Additionally, it’s important to remember that Bitcoin and other cryptocurrencies still aren’t backed by a government or a physical commodity. Without that backing, if prices tumble and the cryptocurrency fails, you lose your money, and there’s no way to recover it.

In the end, Bitcoin is still a very high-risk investment.

So Is Now the Time to Invest in Bitcoin?

If you’re comfortable with the risk, then now may be a good time to invest in Bitcoin. However, it shouldn’t be the only thing you invest in.

Committing your entire retirement savings to cryptocurrencies would be incredibly dangerous. It wouldn’t be unlike taking all of that money and heading to a casino.

But, there is some potential. If you have a bit money to spare and aren’t afraid to lose it all, then you could have a lot to gain if Bitcoin keeps going up.

Just make sure to be smart about how much you invest, because it could all be gone in an instant. If you’re new to investing in Cryptocurrency, you can consider trying an Automated trading platform like Bitcoin Loophole that guarantees excellent outcomes on minimal investments.

Readers, have you been curious about investing in cryptocurrencies? Tell us about it in the comments section beneath this post.

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