Although cryptocurrencies have existed since Bitcoin emerged in
2009, this medium of exchange has experienced a massive surge in
popularity in recent months. Offering a wide range of opportunities
(and risks), cryptocurrencies have inspired a great deal of
confusion due to their unique properties. To better understand the
potential tax impacts that cryptocurrency may have on you and your
business, it is important to ask the right questions – and
get answers you can trust.
At a high level, the blockchain is a digital ledger that keeps
track of all the transactions in a way that’s decentralized,
distributed, consensus-based and immutable. Blockchain technology
was first established through Bitcoin, which utilizes miners as a
way to verify transactions. Miners maintain the digital ledger,
being rewarded through units of cryptocurrency. Verifying
transactions is a process commonly known as the consensus protocol.
When a block is confirmed and posted on the blockchain, the
