Understanding Bitcoin and Cryptocurrency

A brief overview of what Bitcoin and cryptocurrency is and why people use it to help hide
their true wealth.

Cryptocurrency and why some people use it to hide their true wealth.

The idea of this article is to help the average person who doesn’t really understand what cryptocurrency is, why people invest in it and what to do if you suspect your partner of using cryptocurrency as a means of hiding their true wealth.

What is cryptocurrency and Bitcoin?

Cryptocurrency (simplified) is digital money which is held in a digital wallet. It is a form of digital (online) currency that can be sent between two parties and spent on goods and services or speculated upon. There are over 1,500 different digital coins and tokens and more are created every day.

Cryptocurrency popularity

Bitcoin has been around since 2009, but it traded for very little originally. In July 2010, a single Bitcoin went from $0.0008 to $0.08 for a single coin. Fast forward to late 2017 and one bitcoin nearly reached the price of $20,000 each. The 2017 and early 2018 bitcoin mania didn’t last long, but it certainly helped put the concept of digital money on the map.

Altcoins became well known during this mania period too. Most investors know about Ethereum and many of the top 20 coins.

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Why is Bitcoin and a select number of altcoins popular as a form of money?

Fast. Cryptocurrency transactions are fast and with some altcoins nearly instant.
Irreversible. Once you have sent a bitcoin payment and it has been received you can not reverse that payment later on like you can with some wire transfers or credit card payments.
Global. All you need is a digital wallet and cryptocurrency can be sent to any mobile phone anywhere in the world.
Decentralised. No entity owns Bitcoin and this makes it impossible to close it down. There is no owner or company.
Dark or privacy coins. There are a few cryptocurrency coins and tokens that are much more anonymous than Bitcoin and these are much harder to track and trace.
Secure. All cryptocurrencies run on a blockchain. Short of a quantum computer it is impossible to hack bitcoin. The nature of the blockchain is to be decentralised and so make it impossible to hack one central point.
Affordable. The fees are very low and in some instances nearly free to transfer millions and even billions of fiat currency.
Anonymous. Ex president Obama once said in 2017 “Bitcoin is like having a Swiss bank account in your pocket.” Although it is possible to find a wallets address and see the activity in that wallet, it is very hard to find out the ownership of that wallet.
Transferable and spendable. It was quite common during 2017 and 2018 to hear the average person remark that bitcoin and altcoins were not real money and you can’t buy anything with it.

This is erroneous. There are tens of thousands of ATM cash points worldwide that allow you to convert cryptocurrency directly into cash and take it from a cash machine.

There are shops in the United States of America and London for example that allow a person to walk into a Bentley, Ferrari and rolls Royce showroom and buy a car for bitcoin or Ethereum. There are property websites where you can swap your cryptocurrency for a penthouse or mansion overlooking the sea. You can even buy physical gold and silver bars with cryptocurrency. We have an entire website dedicated to listing businesses that offer good and services for payment in cryptocurrency and bitcoin called www.spendingcrypto.com.

Tax avoidance. There is also the added advantage of being able to swap your cryptocurrency for another asset and thereby avoiding tax. Although we strongly suggest not going down this road.

Hopefully after reading this you are now more informed as to why individuals and especially wealthy individuals like cryptocurrency and sometimes use it to hide their true wealth.

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