The Bitcoin has become an official currency in Germany
The Bitcoin, the virtual money created by hackers, has now a legal existence in Germany: a way for the German government to perceive tax on this new way of payment.
It has been now established that the Bitcoin will be considered as a “private money”, capable of “multilateral exchanges”. The profits from this new official money will thus be subject to an income tax which will be granted at a level of 25%. An exemption after one year will nevertheless occur for the personal user of this virtual money. On the other hand, businesses that would use this money will be required to pay a VAT amount for each transaction.
This money has been created by Satoshi Nakamoto in 2009 and has been promptly considered as a symbol of liberty on Internet as one of the main characteristic of this money is the fact that its utilisation is based on free softwares and that the money is not related to any central bank. Since the money has met an incredibly rise of its value, many politician were thinking about incorporating this money in the “real” economy. Australia, USA and even the European Commission seem also to have the will to regulate Bitcoins. However, breaches in security are potentially vast; if the community wishes to establish this virtual money as a currency in the everyday life, it would be mandatory to resolve such issues.
Moreover, despite the fact that Bitcoin has no relation with any central bank, its value has constantly followed the value of the American dollar. The main reason for this is that Bitcoin are usually exchanged against dollars (80% of the exchanges). But it now appears that the Bitcoin is following the value of gold, this empiric observation made Paul Krugman say that Bitcoin has reintroduced a new gold standard.
As for now, the main question is to know how the European Commission and especially Neelie Kroes will react to this German progress. Shall we consider virtual money as a means for liberty or shall we fear potential breaches?