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Bitcoin as Commodity or Currency: What Difference Does It Make to Gambling?

Daniel Nyairo in Bitcoin & Cryptocurrency published on 18, December 2014

Bitcoin Gambling Tax

It is now widely agreeable that Bitcoin is making huge strides towards becoming a global currency. And this is because each passing day individuals and brands are adopting it for all kinds of business transactions.

To a large extent, the growth is driven by lower cost of completing transactions, convenience, security and ease of use.

Nevertheless, nearly everyone believes that the digital currency will only achieve the status of a transnational status after overcoming numerous challenges it faces, some of which are thrown on its way by governments.

Many states have chosen to recognize Bitcoin as a commodity

There is no shortage of examples in this regard. For instance, countries like China and Russia have decided to either restrict or completely ban transactions involving the digital currency in the name of protecting their sovereignty.

And this has had an overall effect of slowing down the adoption.

It must be mentioned, however, that there is a lot of hope in many other countries. Some good examples include Germany that recognizes Bitcoin as a foreign currency and therefore treats it as one.

Bitcoin CountriesAs such, taxation emerges as one of the points that stick out the most in terms of Bitcoin regulation. And several governments around the world have chosen to either tax Bitcoin as a commodity or treat it as a currency, and therefore, tax the transactions they are used to settle accordingly.

Some of these countries include Australia, USA, Brazil, Sweden, Canada and Hong Kong.

Incidentally, by choosing to tax Bitcoin, a country is seen as being more receptive and friendly to crypto coins. In fact, it is often interpreted as recognition and endorsement.

Nevertheless, in the recent months there have been debates on the repercussions of tax authorities in different countries treating Bitcoin as a commodity, a financial instrument or a currency.

Does the form of taxing matter to Bitcoin gamblers?

Of course, this debate is also relevant to those who place bets or gamble, especially Bitcoin casino enthusiasts or those who prefer to follow Bitcoin sports betting sites instead of real-money online bookies. This is despite the fact that taxation is often the least in their minds.

The reason it really matters comes down to the cost that is attached to each of these positions.

Generally in a jurisdiction where Bitcoin is given the tag of a commodity and any transaction where it is used as a medium of exchange recognized as barter trade, the cost tends to be higher.

This is because every time money changes hands in the form of Bitcoin, there is a tax that is attached to it. This, of course, is the opposite of what happens when the digital currency is treated as a currency.

For bettors, that cost comes either from the transaction they undertake in order to acquire bitcoins or exchanging wins for fiat money.

Bottom line, it really matters to Bitcoin gamblers whether the digital currency is classified as a currency or a commodity because it affects the cost of completing transactions within the markets, including the Bitcoin gambling sector.

 

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