Bitcoin as a payment solution for many e-commerce companies is something that no one wants to think about. This is especially true since the recent announcement that the IRS is going to block tax-free status of Bitcoins.
At this time, Bitcoins are known as an alternative to currency like the dollar and European Pound that is exempted from income tax. That being said, the Internal Revenue Service (IRS) has been calling into question the legality of the use of Bitcoins and whether they can be taxed.
This article will discuss the many benefits of using Bitcoins as a payment solution. We will also discuss the currency regulation of Bitcoin and what it means for an individual or business that owns Bitcoins. Finally, we will discuss the future of Bitcoins as a new form of currency and some of the benefits and limitations of Bitcoin in that capacity.
Bitcoin is not considered “real” money. It is not backed by the US government or Federal Reserve System. This makes it hard to process with traditional banks as it is not approved by the Federal Reserve System.
One of the things that makes the IRS hesitant about processing payments with Bitcoins is the way it stores transaction records. Transactions in the Blockchain record each transaction, which means the records are permanent and cannot be tampered with.
Because of the transactions that occur in the Blockchain, a merchant’s transaction records can be checked and verified, unlike in the case of a credit card transaction. The ability to confirm the authenticity of a transaction makes the idea of Bitcoin payment processing to be very popular.
Another way to make sure the payment is legitimate is through the confirmation method of private key encryption. Once you have the private key, you can always go back and check to see if you are given the correct amount of Bitcoins.
However, while it is possible to pay with Bitcoins for purchases on regular commerce, the future of Bitcoins as a form of payment is yet to be seen. The IRS might change their view in the future.