After much discussion and debate, the Federal Ministry of Finance has decided to approve Bitcoins as an official means of payment in Germany. In the future, this could open up new avenues in the credit market as well.
Bitcoins are subject to tax law and are therefore taxable. However, if the holder has it in his possession for at least 12 months, the tax does not apply.
What are Bitcoins?
Bitcoins are a digital currency, which entered the market in 2009. It is subject to strict, highly complicated mathematical algorithms and is almost forgery-proof. Of course, what was created by humans can also be hacked by humans, but currently Bitcoins are still considered the safest currency.
How are bitcoins encrypted?
When a bitcoin is created through mining, it is given a transaction number, simply put the number 1, which is stored in a database. Now the Bitcoin can be used for payments. If a user uses the bitcoin with the number 1 for a payment to make z.B. to book a room this Bitcoin is transmitted. Now the algorithm is changed and the 1 becomes a 1/2.
The 2 in this case stands for another transaction. The bitcoin must now be sent to the database with its modified algorithm and it is noted in the signature of the bitcoin that it is a registered bitcoin and has been used for a transaction.
With this principle bitcoins keep their value. This electronic signature is roughly equivalent to the serial number of a bank bill. The difference to the banknote is that the serial number changes with every transaction and the change of owner of the bitcoin can be traced at any time. In short, any transaction number, z.B. 1/2/346/59876, indicates a different owner from the past.
What is Bitcoin mining?
"Bitcoin mining" refers to the production of bitcoins with the help of a computer. How this works? Here is an example:
In the beginning, Bitcoins were created with the processing power of the computer's CPU. So if a private computer of Peter Sauer provided computing capacity on the Bitcoin network, after a certain period of time, the computer received a Bitcoin as a reward for doing so. His calculator just has to solve a complicated mathematical problem to do so. How much computing power Peter had to provide for one Bitcoin was also mathematically prescribed. Today, mainly graphics cards with high processing power are used for mining. This means that Peter, who is now an ambitious 3D shooter fan and also always installs the best graphics cards in his computer, can earn more Bitcoins than 3 years ago.
Furthermore, CPU's are being built today, which consume less energy than graphics cards and "mine" Bitcoins even faster. promote) can. These CPU's are more expensive to buy than good graphics cards but ultimately more lucrative. However, mining is still very costly and time-consuming. Most miners (engl. miners) therefore do it only as a hobby. The really lucrative business with Bitcoins is in trading them. Whereby the risk, like on the stock exchange, is quite high especially with this still young currency.
Borrow and lend Bitcoins with short-term loans
Trading with Bitcoins could become interesting in the future for stock exchange speculators, banks, which give loans or for private P2P lenders.
Suppose a lender buys 100 bitcoins to lend as a loan. After a term of 12 months, he gets 110 bitcoins back from the borrower. If he keeps the Bitcoins in his possession for another 12 months, any taxes are eliminated and his profit is not diminished. Thus, after 24 months, the lender has earned 10 Bitcoins tax-free. If one calculates this in higher amounts, this could be extremely lucrative in the million range.
It gets even more interesting with short-term loans, there the waiting times for the lender are not as long as with conventional loans. The online loan is repaid within 30 or 60 days. Again, save and wait 12 months and the profit is tax free. So here it is taking a maximum of 14 months to get a payout.
Surely it won't be long before there will be laws making such transactions taxable, but for the near future it will give some traders a little bonus.
The value of Bitcoins stabilizes after 6 months
Bitcoins are traded like foreign exchange at the moment and are still subject to strong fluctuations. If in February 2013 a bitcoin was worth 25 euros, there was a high of 133 euros per bitcoin in April . After this high came a rapid fall in the price, but ultimately despite the ups and downs a good profit for investors in May 2013 to 84 euros. This value has remained relatively stable until today. Investors who bought bitcoins in February 2013 could make 60 euros per bitcoin profit to date. Now it remains to be seen how it looks until the end of the year to make further forecasts for the business of borrowing money and whether a short-term loan will become a clever tax saving method in the future.