With all of the hype and news about bitcoin and other alternative crypto currencies lately, a common question that arises is if bitcoin is legal in the United States? Although the digital currency has been around since its creation by Satoshi Nakamoto in 2009, people still ask the question. The bottom line, is that it is 100% legal to use bitcoin in the U.S…keeping in mind that it is not like the Simpson’s episode from back in the day where they made a play on anything goes in international waters…the same tax and reporting requirements apply to bitcoin for U.S. residents and citizens as any other form of currency.
How is Bitcoin Different from Regular Currency?
Unlike traditional currency as we think about it, with bitcoin there is not a physical currency similar to the Euro, Pound, or Dollar. The crypto currency is saved in either an online or offline wallet that stores the private security key that enables the transaction. Consumers use a ledger that is known as a blockchain that is used to keep track of the full record of all of the bitcoin transactions allowing the currency to be sent to anyone who has a bitcoin address via a peer-to-peer transaction. The currency is also traded on various crypto currency exchanges throughout the world that contribute to setting the value of the currency.
What are the Legal and Regulatory Issues with Bitcoin?
Since there is not a central issuing authority for bitcoin, it exists in a deregulated marketplace. One does not require any personally identifying information to open a bitcoin account similar to a bank account; however, as the currency matures many locations like Coinbase are requiring additional identity verification in order to increase one’s limits on taking money out of bitcoin and converting it to cash. All bitcoin payments made in the United States fall under the same anti-money laundering rules that apply to regular cash as well as payments to and from banking institutions.
Is Bitcoin Accepted Worldwide?
Bitcoin has quickly gained worldwide acceptance with federal authority approval varying by the country. Consumers are able to transfer bitcoin from one country to another without any impediments. The exchange rates between countries and the bitcoin can vary significantly depending on the country. Some countries do place limitations on the use of bitcoin. In Iceland, the currency is prohibited since the 2008 financial crisis. China also places some restrictions on the ability of banks to hold the coin.
How Can You Start Buying Bitcoin Today?
One of the easiest ways to get started with buying bitcoin, bitcoin cash, and other major crypto currencies is to signup for a free account at Coinbase here. If you buy or sell $100 or more of digital currency then you will get $10 free of bitcoin (and we will too for a full disclaimer) until the company discontinues their offer. The company allows deposits from debit/credit cards and checking accounts. You can withdrawal to a Paypal account, but only use the Paypal debit card for deposits. Enjoy! Enjoy the ride, and remember to only invest monies that you can afford to lose due to the volatility of the crypto currencies markets.