The 2023 Tax Guide for Cryptocurrency and NFTs
By Anthony Diosdi Cryptocurrency is a type of digital or virtual currency that uses cryptography for security. Virtual currency is a digital representation of value, other than a representation of the U.S. dollar or a foreign currency, that functions as a unit of account, a store of value, and a medium of exchange. Cryptocurrency allows parties to transact directly without an intermediary using blockchain technology, a shared distributed ledger that verifies, records, and settles transactions on a secure, encrypted network. Although some major retailers accept cryptocurrencies like Bitcoin and Ethereum, cryptocurrency is not money. Money means coin and paper money that Congress declares is legal tender. Because cryptocurrencies are sometimes other than money, what they are varies depending on the perspective from which they are viewed. For example, the Securities…