Among core problems in the US$150 billion business are how nations can apply the tax to cryptocurrency businesses and whether there should be checks on the ability for bitcoin and other virtual currencies to expedite global fund flows.
“Today will go down in records as the beginning of the war between the defenders of cryptocurrency and the world governments,” McAfee told the News of the increasing conflict between governments and the “fugitives” subculture who back the expansion of virtual currencies.
What’s more, bitcoin’s status changes in different jurisdictions? Australia said it would eliminate the double tax on activities involving cryptocurrencies like bitcoin, while China has yet to define the legal status of virtual currencies.
“If governments aren’t able to know what the change is they will be unable to collect revenues. That’s going to create panic in some countries. China sees it already,” McAfee said.
Supporters of blockchain technology, the method underpinning bitcoin, believe initial coin offerings or token businesses is an innovative and easy way for start-ups to raise reserves to finance their projects.
“Like applying chemotherapy to destroy the cancer cells, many healthy cells will also be killed. What occurred in China will kill a lot of projects regardless of whether they are nice ones or scams,” said Emil Chan, vice-president of the Hong Kong Blockchain Society.
Critics of Bitcoin say the virtual currency market is in a balloon, drawing in speculators. However, McAfee, whose business MGT Capital Investments mines the cryptocurrency, disagrees.
“It costs my business over US$1,000 to create one bitcoin. We are one of the biggest bitcoin miners in America. We put work, time, electricity and a lot of backgrounds to create this coin. How much work does it need to create a $100 bill?”
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