The tax agency of U.K. (HMRC) has published a detailed explanation on December 19, about crypto assets, what they are, how individuals will be taxed and who can qualify as a cryptocurrency trader.
This report specified the details on how individual crypto holders will be taxed and which records they need to keep.
The report indicates:
“HMRC does not consider cryptoassets to be currency or money. This reflects the position previously set out by the Cryptoasset Taskforce report (CATF). The CATF have identified three types of cryptoassets which are; exchange tokens, utility tokens and security tokens.”
The report specifically focused on exchange tokens, which it explains as “a method of payment”.
According to the report, individuals hold crypto assets as a investment, usually for capital appreciation in its value and they will have to pay Capital Gains Tax when they sell their crypto assets.
Also individuals who receive crypto assets as a form on payment or get them through mining will have to pay Income Tax and National Insurance contributions.
The report continues by detailed explanations on different situations of how taxes would have to be paid in certain situations under titles such as, financial trading, mining, airdrops etc. It also gives some examples to underline these titles.
Blockchain forks is another important title in the report, which is essentially a collectively agreed upon software update which can cause the chain to split and new tokens to be formed.
If an individual holds crypto assets through an exchange, the exchange will make a choice whether to recognise the new crypto assets created by the fork. New crypto assets can only be disposed of if the exchange recognises the new crypto assets. HMRC will “consider cases of difficulty as they arise.”
The tax agency of U.K. also mentioned that they would publish further information about the tax treatment for assets held by businesses or companies.
DMScript Announces Partnership with OVH for Their Optimized Servers
The United Kingdom-based blockchain gaming company DMScript announced on Sunday that it has partnered with renowned cloud computing solutions provider OVHcloud, to utilize their optimized servers. In the official blog on Medium, the company said they would use OVHcloud services for Higglo, a new gaming platform expected to launch soon.
— DMScript (@DMScript) September 27, 2020
As part of the strategic partnership, OVH will also provide cloud computing and server maintenance for DMPlay in sync with nVidia’s technology to provide a seamless and efficient user experience. On the other hand, Higglo will use OVH services to avoid lags, crash downs, and overload delays due to high traffic. DMScript has been inactive in the community for a long time, which it admitted in the official announcement, and said that the team was busy building the Higglo platform that is due for launch soon along with DMPlay.
Blockchain-based gaming is one of the fastest-growing segments in the crypto-blockchain industry, along with DeFi and gambling. The growing demand leads to higher & faster computing, quick processing cloud data, and 24/7 maintenance.
Partnering with established names like OVH and nVIDIA gives DMScript a great technological advantage and will allow the company to focus on its core strength, and that’s building blockchain-based online games. Such partnerships, like the one with OVH, will help DMScript to employ more capital. Intellectual resources are building unique and wholesome experiences for the gamers, while OVH takes the responsibility to ensure the smooth functioning of the servers.
Research: Cryptocurrencies Are The Leading Point of Entry for Retail Investors In Emerging Countries
The popular digital asset exchange Huobi Group has compiled a study exploring the investment profiles of cryptocurrency traders in emerging markets. It concluded that digital assets such as Bitcoin and Ethereum have become “the first point of entry to financial management for many individuals.”
The majority of the survey’s participants came from Europe, Asia, Africa, and South America. The study concluded that most of them are relatively new to investing.
78% answered that their investment experience is less than a year, while only 17% said they had been actively trading or investing for five or more years.
“considering 73% of respondents were of prime working age (26-50 years old), age was not a major contributor to the low levels of prior investing experience.” According to the report.
Furthermore, most participants reaffirmed that cryptocurrencies are their preferable investment instruments with a sizeable difference compared to other markets. Equity trading is next with 30%, while other traditional products such as bonds, real estate, investment funds, and forex received less than a quarter of the answers.
Longer-Term Holders Stick With Bitcoin And Ethereum
The research revealed that most investors maintain short-term views on cryptocurrencies. 55% indicated that their horizon is less than a year. Only 13% aim for a more extended period (more than four years).
However, when it comes down to specific digital assets, the situation was somewhat different. Bitcoin and Ethereum investors appeared “much more likely to hold” their coins for at least three years.
Interestingly, while most retail investors had answered that their annual income is relatively modest, their investment allocations in cryptocurrencies seemed quite significant.
“A majority (54%) report having an annual income of $10,000 or lower, and very few (13%) earn more than $50,000 per annum. Nearly half (49%) of the respondents plan to invest between 10 – 30% of their annual income in digital assets, and almost 25% plans to allocate more than 30% of their income in crypto.”
Vice President of Global Business at Huobi Group, Ciara Sun, commented that these findings:
“aren’t surprising. They do solidify our belief that digital assets will continue playing a significant role in the future borderless economy and help drive global financial inclusion. As crypto becomes more accessible, it will become a gateway to other financial products and services, helping set a path to financial wellbeing.”
Optimism For Ethereum as Layer 2 Testnet Gets Launched: What Does It Mean?
Layer 2 scaling developers at the Plasma Group have recently announced the launch of their Optimistic Ethereum testnet, which will be deployed on projects to test much needed scaling solutions.
Essentially, Layer 2 scaling involves taking work off the root chain to process data and transactions faster. The team has built a system called OVM, a fully-featured Ethereum Virtual Machine (EVM) compliant execution environment designed for L2 systems.
The OVM was first tested on Uniswap’s Unipig L2 decentralized exchange launched as a demo in late 2019.
At long last – light at the end of the tunnel. Welcome to the first phase of the Optimistic Ethereum Testnet ⛅️. https://t.co/cjfhB0WU98
— Optimism (@optimismPBC) September 25, 2020
Synthetix The First Guinea Pig
The Optimistic Ethereum testnet will be rolled out in several phases bringing early adopters on gradually so that the team can individually support each project.
On-chain synthetic assets DeFi protocol Synthetix will be the first to trial the scaling solutions offering 200,000 SNX in rewards to their users for participating. The team added that the testnet is currently open for public use, but not yet for public contract deployment as there will be bugs that need ironing out first.
Phase A of the testing will involve airdropped tokens that will allow participants to mint and burn sUSD, the Synthetix native stablecoin, and claim staking rewards. This will be done using the Görli Ethereum testnet.
Phase B will enable deposits and include an airdrop of Layer 1 Görli SNX tokens to participants who can increase their stakes if they perform a deposit. Phase C will allow withdrawals, and participants must complete a successful withdrawal to receive their testnet rewards on the mainnet.
Optimistic Ethereum is the only generalized L2 solution for Ethereum, which means that it does not require specific functionality to be built to support existing L1 protocols.
Synthetix posted a guide for users wanting to take part in the tests, stating;
“This is a huge milestone for Synthetix, Optimistic Ethereum, and indeed the entire Ethereum space.”
— Synthetix ⚔️ (@synthetix_io) September 25, 2020
Ethereum Fees Update
A week after the digital dust has settled from the Uniswap airdrop and UNI launch, gas fees have fallen back a little. From a high of almost $12 on September 17, the average transaction fee has fallen back to around $2.75, according to Bitinfocharts.
This is still way too high, though, and it is hoped that many more Layer 2 solutions will be deployed to DeFi protocols over the coming months so that they can remain on Ethereum. The ETH 2.0 scaling upgrade is still at least a year away, so efforts such as Optimistic Ethereum could become its savior until then.
Blockchain1 month ago
Market Wrap: Bitcoin’s Powell-Induced Price Swing; Ethereum Still High on Gas
Blockchain3 weeks ago
Blockchain Bites: Is DeFi an Inside Deal?
Blockchain1 month ago
The US Post Office Files a Patent for a Blockchain-Based Voting System
Blockchain4 months ago
How to Identify the ‘Third Wave’ of Cannabis Investments
Blockchain2 months ago
Wealthfront Lures Millenials With Crypto Memes and Tactics
Blockchain2 months ago
Top Five Most Advanced Cryptocurrencies
Blockchain4 months ago
5 Tips to Interest the Press in Your Cannabis Business
Blockchain3 months ago
Top 5 Most Effective Cannabis Marketing Strategies