Crypto Updates

WHAT IS "BLOCKCHAIN TECHNOLOGY" AND HOW IT WORKS?

✔️ The blockchain technology was first outlined in 1991 by Stuart Haber and W. Scott Stornetta, two researchers who wanted to implement a system where document timestamps could not be tampered with. With the launch of BITCOIN in January 2009, that blockchain had its first real-world application.

✔️ The blockchain can be thought of as a distributed DATABASE. Additions to this database are initiated by one of the members (i.e. the network nodes), who creates a new “block” of data, which can contain all sorts of information. This new block is then broadcasted to every party in the network in an encrypted form (utilising CRYPTOGRAPHY) so that the transaction details are not made public.

Those in the network (i.e. the other network nodes) collectively determine the block’s validity in accordance with a pre-defined algorithmic validation method, commonly referred to as a
“consensus mechanism”. Once validated, the new “block” is added to the blockchain, which essentially results in an update of the transaction ledger that is distributed across the network.

✔️ The blockchain is a specific type of DATABASE.

One key difference between a typical database and a blockchain is the way the data is structured. A blockchain collects information together in groups, also known as blocks, that hold sets of information. Blocks have certain storage capacities and, when filled, are chained onto the previously filled block, forming a chain of data known as the “blockchain.” All new information that follows that freshly added block is compiled into a newly formed block that will then also be added to the chain once filled.

✔️ NO MIDDLEMAN IS REQUIRED ANYMORE?

One of the key advantages of blockchain technology is that it allows to simplify the ex*****on of a wide array of transactions that would normally require the INTERMEDIATION OF A THIRD PARTY (e.g. a custodian, a bank, a securities settlement system, broker-dealers, a trade repository, etc.). However, it is important to underscore that it may also expose interacting parties to certain RISKS that were previously managed by these intermediaries.

Sources: https://www.investopedia.com/terms/b/blockchain.asp -vs-blockchain,https://www.europarl.europa.eu/cmsdata/150761/TAX3%20Study%20on%20cryptocurrencies%20and%20blockchain.pdf

SHOULD THE VIRTUAL CURRENCIES (Bitcoin, Ethereum and other digital assets) BE TAXED?

A new push by U.S. Congress to require crypto brokers to report transactions to the Internal Revenue Service (IRS) could create some unwelcome tax bills but could clarify rules for traders and users of Bitcoin and other digital tokens, potentially strengthening the system in the long run.

People who trade digital currencies must pay income taxes on any gains, even if some crypto investors have been ignoring their tax obligations. But even for those who want to follow the law, it can be difficult to keep track of what's owed.

While traditional stock brokerages are already required to send detailed tax forms to clients, CRYPTO EXCHANGES ARE NOT.

Cryptocurrency exchanges and others in the industry have raised concerns that the U.S. Senate is rushing the rules into effect without consulting them first.

The most important question is that, what would be the tax consequences for crypto investors?

Some of the crypto experts believe that legal regulation is required in the crypto space in order for wider adoption to take place, for legitimize the crypto ecosystem and foster international growth.

Check more at https://www.google.pt/amp/s/www.ndtv.com/business/crypto-investors-get-ready-for-more-taxes-but-clearer-rules-2500430%3famp=1&akamai-rum=off

ETHEREUM TO SURPASS BITCOIN IN 5 YEARS

Ethereum’s Ascent To The Top Of The Cryptoverse Is Unstoppable, Asserts DeVere Group CEO.

Ethereum has witnessed noticeable growth this year as the much-awaited EIP-1559 upgrade, which was part of the London Hardfork, went live. Courtesy of these updates, Etheruem had a wild run, defeating that of Bitcoin by a wide margin.

While Bitcoin is up by around 50% so far this year, Ethereum has gained over 300% during this same period. Moreover, Ethereum has not only managed to outperform Bitcoin in the first half of 2021, but it has also beaten all other benchmark assets, too.

Given the aforementioned reasons, Green claims that Ethereum would manage to eventually surpass Bitcoin by 2026. “Ultimately, this will mean that its value will exceed that of Bitcoin – probably within five years,” he said.

Despite being bullish on Ethereum, the deVere CEO is also optimistic about Bitcoin. “That said, I remain confident that Bitcoin will hit, or even surpass its mid-April all-time high of $65,000 by the end of 2021,” he said.

Nevertheless, Green believes that Ethereum is unstoppable and it would be just a matter of time for it to outperform Bitcoin. “There will be peaks and troughs along the way of course, but Ethereum’s ascent to the top of the cryptoverse seems unstoppable,” he said.

With Ethereum’s exceptional performance during 2021, the subject of Flippening is being debated more than ever. In July, the major investment firm Goldman Sachs predicted that Ethereum would overtake Bitcoin as the prevailing digital store of value in the near future.

Official source: https://zycrypto.com/ethereums-ascent-to-the-top-of-the-cryptoverse-is-unstoppable-asserts-devere-group-ceo/