Bitcoin accounting

1. The essence of bitcoin is a set of distributed ledgers. Generally speaking, miners are many accountants who have one ledger. Because accountants or reimbursement people may make false statements, only when an account is recognized by enough Accountants (generally speaking, six are enough) can it be effective. These are the six confirmations. The process of accounting is mining, which needs electricity
the function of bitcoin, or the dream of its followers, is to realize the gold standard monetary system (in fact, there is no upper limit for gold, but bitcoin has a total limit), and create a currency with a slowly increasing supply and a total limit. Thanks to the distributed database, the transfer of bitcoin does not need to go through a third party and is irreversible. This is a very important feature, and this is its potential
with the graal rection of output, the value will graally increase in the long run. There are more and more audiences
e to the limited level, my explanation may be different, but this is generally the case.

2. With the emergence of cryptocurrencies such as bitcoin, this time tested financial framework is likely to be changed. With the power of blockchain and the rise of this new data based currency, the whole concept of money has been reversed. Although our current understanding of money has changed over the past few decades, thanks to credit cards and fiat money, cryptocurrency is the logical next step in this evolution
this is understandable for accountants, but what does it mean for entrepreneurs? Well, anyone interested in starting or maintaining a successful business will need a competent accounting team. With the change of financial environment, the experience and insight that business accountants need will also change. Understanding this coming paradigm shift can better help entrepreneurs prove their organization in the future, and may even help them save money on business expenses related to accounting
overview of bitcoin modern accounting
the current financial paradigm regards bitcoin, Ethernet and all other cryptocurrencies as assets. In the United States, for example, any form of cryptocurrency is considered property, not money. Although the IRS recognizes that bitcoin can be used as a "medium of exchange", bitcoin is not classified as currency because it usually has the function of "unit of account and value storage space"
as a result of this classification, changes in the value and quantity of cryptocurrencies are taxed as capital gains or losses. Mining or buying a lot of bitcoin will lead to capital increase, which will make bitcoin subject to capital gains tax. The same is true for trading or selling cryptocurrency, as these events are treated as taxable capital gains and losses. Therefore, the accounting treatment of the holding amount of the comparative currency or other high-end stocks is roughly the same as that of other forms of equity (such as real estate or stocks)
forecast of bitcoin and accounting in the future
e to the legitimacy of blockchain and cryptocurrency in the financial sector, the accounting nature of bitcoin and other advanced currencies will also change. Although many potential changes are too far away to be accurately predicted, one aspect of accounting is bound to change dramatically, which will inevitably affect all entrepreneurs and business organizations. This aspect refers to audit
here's how blockchain and cryptocurrency are used to brutally disrupt the audit process, and what it means for companies that employ auditors? Because bitcoin is currently classified as the property that must pay capital gains tax, the audit method of its value is called immediate forensics analysis. However, the immediate verifiability of blockchain technology makes this audit method obsolete

when you track these changes and developments, please discuss with your organization's accountant or financial advisor. They can help you understand the further meaning of these events; In some cases, they can even show you what actions you can take to deal with these events, so as to increase your profits, rece your costs, and open up a new development path for your enterprise
on the other hand, if your accountants and auditors are at a loss about your research, consider updating your finance team.

3. It can be said that the world's largest service companies are all promoting the provision of blockchain solutions for customers, providing a cheaper, more effective and faster solution to replace the existing infrastructure. Bitcoin and blockchain solutions are favored by the big four auditors
recently, KPMG and Microsoft have reached a new strategic partnership, which will focus on the digital work of large and medium-sized Internet of things enterprises in India
Deloitte is investing heavily in bitcoin and blockchain technology. Rubix, an internal team of Deloitte, is focusing on developing blockchain applications. In addition, Deloitte Canada recently installed a bitcoin ATM in its Toronto Office
PwC is also involved in the development of blockchain, including establishing a partnership with blockstream, a bitcoin blockchain startup. The service giant also has a partnership with New York blockchain start-up digital asset company. In March 2016, PricewaterhouseCoopers released a report, saying that blockchain is a "rare opportunity" to realize the technological leap of financial services instry
in addition, Ernst & Young Switzerland has announced that they will accept bitcoin as the service payment method from 2017 Sina)
blockchain is the basic protocol of bitcoin, and blockchain is the most popular word in 2016. Microsoft, Wanda, Tencent, ant financial services and other giant companies have been paying attention to blockchain. Domestic European crowdfunding is in the forefront of using blockchain technology.

4. It can be said that the world's largest service companies are all promoting the provision of blockchain solutions for customers, providing a cheaper, more effective and faster solution to replace the existing infrastructure
Deloitte is an obvious example, which is investing in bitcoin and blockchain technology on a large scale. Rubix, an internal team of Deloitte, is focusing on developing blockchain applications. In addition, Deloitte Canada recently installed a bitcoin ATM in its Toronto Office
Illiana oris Valiente, co-founder and strategic director of rubix team, explained:
"we think it's very important to show people how to get bitcoin, because it's an entry point to understand the broader impact of blockchain."
Deloitte also explained how blockchain can change instries, including healthcare, financial services and infrastructure, and even bonus schemes. Among them, Deloitte cooperated with Bank of Ireland to successfully conct a proof of concept test of blockchain for transaction reporting
recently, Deloitte and setl, a London blockchain start-up company, reached the first blockchain investment plan. About a month ago, Deloitte and setl announced their cooperation in the development of a contactless card for transaction settlement using blockchain technology< PwC is also involved in the development of blockchain, including establishing a partnership with blockstream, a bitcoin blockchain startup. The service giant also has a partnership with New York blockchain start-up digital asset company. In March 2016, PricewaterhouseCoopers released a report, saying that blockchain is a rare opportunity to realize the technological leap of financial services instry< At the same time, ey, the last of the four big auditors, has recently established a partnership with bitfury group, a famous bitcoin mining company, to provide blockchain services through the use of the latter's expertise
in addition, Ernst & Young Switzerland has announced that they will accept bitcoin as the service payment method from 2017. This plan shows that Ernst & Young has recognized bitcoin, and the underlying technology of bitcoin is the most powerful public blockchain
blockchain technology is not only popular in foreign countries, but also a favorite of the financial sector in China. Domestic giant enterprises such as LETV finance, ant financial services, Internet, Tencent, Wanda and China post are paying attention to blockchain technology. Based on the blockchain technology, Puyin group launched the tea based digital currency Puyin.

5.

According to the regulations of notice 2014-21 of the IRS:

1. The information range of virtual currency payment is consistent with that of other property payment

2. Virtual currency paid to service providers and independent contractors should be taxed, and the tax rules of freelance also apply to virtual currency. Taxpayers usually have to get form 1099-MISC

3. When using virtual currency to pay wages to employees, they must also pay taxes, and they also need to pay federal income tax and payroll tax

4. The third party accepting virtual currency settlement payment on behalf of the merchant must report the payment status in form1099-k, payment card and the third party network dealer

5. Based on the fact that the virtual currency in the hands of taxpayers is a kind of capital asset, the gains or losses in the transaction of virtual currency and the sales of virtual currency need to be taxed

extended information:

legal status of bitcoin in China

in China, the regulations on the administration of RMB prohibit the proction and sale of token tickets. Because there is no clear judicial interpretation of the definition of token ticket, if bitcoin is included in the "token ticket", the legal prospect of bitcoin in China will face uncertainty

the notice of the Ministry of culture and the Ministry of Commerce on strengthening the management of virtual currency of online games (Wen Shi Fa [2009] No. 20) on June 4, 2009 stated that the application scope of virtual currency of online games was defined for the first time, and the distinction between the current virtual currency of online games and the virtual props in the game was made; At the same time, the notice said that the "notice" stipulates that enterprises engaged in related services must be approved before they can operate< br />

6. Let me talk about hardware wallet. Heshu hardware wallet is a digital asset storage hardware wallet launched in June 2018. Unless it is smashed, your personal assets will not be lost or stolen. The most important core concept is only two words: safety
we all know that the control right of digital currency is the private key. With the private key, the currency can be transferred out and into a certain address. Of course, the address is public. So Heshu hardware wallet is safe, even if you pay hackers to crack it, it may not succeed. But indivials should take good care of their hardware wallet and learn how to operate it. Don't lose it or delete it or forget it. Otherwise, you may have to buy a new one to recover the previous data.

7. It's all in a flash, and you can't guarantee when that day will come. It's a little late, and the price is too high. Playing that, it's better to do futures, foreign exchange or something.