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Main article: History of bitcoin Creation The domain name "bitcoin. Andresen later became lead developer at the Bitcoin Foundation.

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Given this, it is an inherently disruptive technology. Bitcoin does not need centralized institutions—like banks—to be its backbone.

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Get Copyright Permission Bitcoin and several rival forms of cryptocurrency experienced record-breaking growth in recent years, leaving many investors and their CPAs grappling with uncertainty and surprise during tax season. Many returns were put on extension, awaiting further guidance from the IRS, while other taxpayers found themselves faced with an unexpectedly large tax bill as a result of misconceptions surrounding how these transactions are taxed. Cryptocurrency is digital currency that uses encryption techniques, rather than a central bank, to generate, exchange, and transfer units of currency. Unlike cash transactions, no bank or government authority verifies the transfer of funds.

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Some employees are paid with Bitcoin, more than a few retailers accept Bitcoin as payment, and others hold the e-currency as a capital asset. Convertible virtual currency is subject to tax by the IRS Bitcoin is the most widely circulated digital currency or e-currency as of It's called a convertible virtual currency because it has an equivalent value in real currency.

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