With so much attention surrounding the bitcoin, many people may be aware of the cryptocurrency revolution as it took hold of the Internet six years ago. However, while people may have heard about how Bitcoin spread and mining, many are still not aware of how it works and what purpose it serves online.
Many financial professionals believe that the bitcoin can best be understood as a unique type of ledger system. When their ownership changes hands, this transaction is recorded in the appropriate blocktrain for the bitcoins. These bitcoins are always online and are never physically transferred anywhere. Such information is always kept to date, so people are always aware of who the current owner of a batch of bitcoins is.
As this form of currency quickly became more and more popular, the United States began to look into regulating it. On January 26th, 2014, a United States federal judge ruled bitcoins are a legal form of currency. This meant that they would be subject to limitations and regulations, much like any other type of currency, in order to discourage fraudulent use.
From that point, many more judicial and regulatory systems began to notice the bitcoin and advocate responsible regulation for it. The IRS issued a notice on March 25th, 2014 that it will treat bitcoins just like any other type of currency in order to regulate it appropriately.
To learn more about the bitcoin, check the infographic below created by our friends at Stetson University’s Online Master of Accounting Degree.