Bitcoin Myths | Are Bitcoins Legal or Illegal?
- Despite rising in popularity over the course of 2017 and 2018, many people mistakenly believe that Bitcoin is illegal
- Many Bitcoin myths stem from the mistaken belief that Bitcoin is the cryptocurrency of choice for Dark Web criminals
- Contrary to popular misconceptions, Bitcoin is legal and will likely not be prohibited at any point in the near future
Are Bitcoins Legal?
One of the most pervasive myths surrounding Bitcoin, sees many people believe that Bitcoin is illegal. In fact, in the United States, 11% of people think that Bitcoin is illegal. As for why this is, YouGov surveys have found that 29% of EU and North American respondents believe that Bitcoin is used predominantly by Dark Web criminals.
Busting Bitcoin Blockchain Myths – Bitcoin is Legal
For the most part, lazy news media is to blame for concerns over the legality of Bitcoin.
To date, Bitcoin is legal in most countries. However, mainstream outlets don’t understand the Bitcoin blockchain. During both bear and bull markets many, therefore, recycle Dark Web myths which have already been debunked several times over.
Bitcoin is Legal & Taxable
In Europe, the United States, cryptocurrency is legal and taxable. That said, Bitcoin (in most cases) is still not considered legal tender.
How are Bitcoins Legal Despite Not Being Considered Legal Tender?
Most countries and tax jurisdictions categorize Bitcoin as ‘intangible property.’ Cryptocurrency is, therefore, taxed in a similar way to real estate. Because of this, things like taxes and court fines can’t be paid using Bitcoin. However, if businesses and individuals wish to start trading and transacting cryptocurrency, they may do so as they please.
Are Bitcoins Illegal in Any Other Part of the World?
To date, only a handful of countries have outlawed Bitcoin. These include Ecuador, Kyrgyzstan, Vietnam, and Bolivia. However, in all cases, governments lack means to enforce bans. As a result, countries like Vietnam have become go-to places to set up Bitcoin mining operations. (Namely, thanks to low local energy prices).
Isn’t Bitcoin Used Predominantly By Dark Web Users?
Contrary to popular opinion, Bitcoin is not the cryptocurrency of choice for Dark Web users. In fact, Bitcoin is the worst form of currency (crypto or otherwise) to plan on using in illicit transactions.
The Bitcoin blockchain is a public ledger which can we viewed by anyone. All transactions are recorded transparently. More importantly, every Bitcoin can be traced to its exact point of origin. Because of this, Dark Web criminals prefer to use dedicated privacy coins when wheeling and dealing.
Will Bitcoin be Made Illegal in Future?
As of 2018, more businesses and individuals are using cryptocurrency than at any point previously. World governments are, therefore, collecting more tax and working with institutions to find ways to regulate cryptocurrency better. For this reason alone, it is highly unlikely that Bitcoin will ever be banned.
Of course, no one knows what the future holds. However, it is worth noting that previous attempts to ban Bitcoin in countries like China and Russian have only led to increased rates of black market adoption. In this case, there is a strong argument to be made that banning Bitcoin would be significantly counterproductive for countries like the United States and Europe.