Bitcoin has been largely scrutinized since it creation as some see it as a plausible currency.  Though BTC is becoming strong and a lot of merchants and institutions have started accepting BTC as a form of payment, can it be considered as a real currency and is taxing it would be wise move or would it cause BTC to falter?

The Canada Revenue Agency says that users of Bitcoins will have to pay taxes on their Bitcoin transactions stating there are two separate tax rules that apply to the electronic currency, depending on whether they are used as money to buy things or if they were merely bought and sold for speculative purposes.

“I don’t think taxing Bitcoin airs it any kind of legitimacy.  You can tax a rock in this world.  anything that has a perceived value will end up getting taxed by the government and you don’t even have to be alive to get taxed.  What would lend it some more weight or legitimacy than Bitcoin currently has will be for the IRS or the CRA is to accept Bitcoin as payment for your taxes,” SiliconANGLE Founding Editor Mark “Rizzn” Hopkins, stated in his Breaking Analysis.

So taxing Bitcoin doesn’t make it “legitimate” and it doesn’t really make it stronger.  It could drive away potential BTC users, but as Mark points out, BTC is not a haven for black market dealers since BTC can easily be traced.  So whether BTC is taxed or not, it’s not something you can use to buy illegal devices without any consequences.  Also, BTC is very volatile that exchange markets can pop anytime and disappear in just a day or two.

For more of Hopkins’ Breaking Analysis on the taxation of Bitcoin, check out the NewsDesk video with Kristin Feledy below: