Is it possible to regulate Bitcoin? What about taxes?

In this article we will try to understand if Bitcoin can be regulated, and if you should pay taxes when you exchange Bitcoin.

About Bitcoin Regulation

It is really difficult to modify the Bitcoin protocol because the cooperation of almost all users is required. It is not a real possibility to give any special rights to some local authorities in the rules of global Bitcoin network.

A big and reach organization may try to influence the network but in this case they should invest as much as all other miners all over the world and it is too expensive.

Otherwise, Bitcoin use can be regulated like the use of any other currency. Like dollar or euro, Bitcoin can be used for great number of purposes, legal or illegal, legality depends on the local laws. So, as you see, if speaking about its use, Bitcoin like any other tool or resource can be regulated and restricted in different ways depending on a country laws. In some countries restrictions make it difficult to use and exchange Bitcoin, but normally governments understand that Bitcoin helps to develop domestic businesses and markets.

About Taxes

In any country Bitcoin is not considered a fiat currency having legal tender status. However, as a rule, tax liability accrues without regard to the medium used. In many jurisdictions Bitcoin can cause different forms of tax liability: income, sales, capital gains, payroll, etc. There are different services which can help you with tax compliance. Coin Reporting is one of them.