The Big Unanswered Question on Cryptocurrency
Just like most people here, I've been involved and following Bitcoins and Cryptocurrencies for a while now. I've read books and posts about how it works and how it is changing the world. But, there is one question that I don't seem to find an answer to and I want to put it out here to see if anyone ha a good explanation.
Right now hundreds of new cryptocurrencies are being created everyday by companies, individuals, web pages etc. People are exchanging their dollars, pesos and yuens into cryptocurrencies.
We will end up with thousands or millions of cryptocurrencies, each one worth a tinny fraction of the value of the total amount of wealth in the world. This will cause the traditional currencies to drop their value as new currencies are created every day by anyone who feels like it.
My question is:
- The fact that anyone can create new currencies mean that in the longterm all currencies, traditional and crypto will get infinitely devalued as more and more cryptos are crated. What happens then?
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I'm not sure if this clears up anything.I've been into this only for a year now. I feel the word Token is more accurate than using the word currency. :)
Cryptocurrency has exploded into the public consciousness, revolutionizing how we think about finance and the digital economy. Yet, despite its widespread adoption and mainstream appeal, a significant question looms large: How will it be regulated? This query encompasses a multitude of concerns, from market stability to investor protection, but perhaps one of the most pressing issues is taxation. Cryptocurrencies, by their decentralized nature, are challenging to regulate, leading to uncertainty about how profits and transactions should be taxed. This ambiguity has left many crypto traders and investors in a state of limbo, unsure of their obligations to government tax agencies. To understand the complexities involved, one can delve into resources like https://www.businesstomark.com/what-taxes-do-you-have-to-pay-when-trading-cryptocurrency/ which provides insights into the types of taxes that may apply when trading cryptocurrency. These can range from capital gains taxes to income taxes, depending on various factors like the length of time assets are held or whether the transactions are part of a business activity. As governments worldwide grapple with these issues, the outcome will have a profound impact on the future of cryptocurrency, shaping its role in the broader financial ecosystem.