How Your Business Can Gain Traction
BTC) are an internationally used
cryptocurrency. They are created and
transferred within a decentralized
peer-to-peer computer network. New
Bitcoins are created through the solution
of complex arithmetical problems by
computers in the Bitcoin network (so
called mining). As the Bitcoin software
is open-source, basically everybody can
have access to it.
There is no single entity like a
central bank controlling the network
or generating the Bitcoins. And, unlike
central bank money, there is a limitation
in the total amount of Bitcoins that can
be created. The program restricts the
number of Bitcoins to 21 million. At the
end of 2013, approximately 12 million
Bitcoins were created. Because Bitcoins
are divisible, it is possible to transfer
smaller units than one Bitcoin. Several
Bitcoin exchanges make it possible to
buy and sell Bitcoins.
available in 2009, but Bitcoins needed
time to gain public interest. Now, more
and more people are possessing and
trading Bitcoins and the number of goods
and services which can be purchased
with Bitcoins is increasing.
Independence from a central bank
and thus from politics, and the limitation
to 21 million units in total are the most
heard positive arguments in the ongoing
discussion, while critics point out that
there are also great risks at hand. For
instance, unless Bitcoins have a broader
acceptance as a method of payment, a
high amount of speculation remains,
resulting in a very high volatility.
For merchants, there are two
interesting aspects in using Bitcoins
as a method of payment. Firstly,
transaction fees are optional and by
now very low, especially compared
to the fees of credit cards. Secondly,
refunds are not possible in the Bitcoin
system. Furthermore, due to the current
media awareness, there is a significant
marketing advantage.
Bitcoin Business
business, it is important to know the laws
and regulations you must follow. Due
to their increasing popularity, Bitcoins
came under the scope of the financial
authorities, who are now setting the
rules for Bitcoin businesses. If people
want to start a business in the German
market or a business focusing on the
German market, they should follow the
opinion of the German Federal Financial
Supervisory Authority (Bundesanstalt für
Finanzdienstleistungsaufsicht, BaFin).
BaFin stated that Bitcoins are not
e-money within the meaning of the
German Payment Services Supervision
Act because there is no central issuer
who establishes claims against himself
by issuing the Bitcoins.
Neither do Bitcoins qualify as
a foreign currency nor as foreign
banknotes and coins because they are
not legal tender.
organizations. With her special focus on value added tax matters,
she regularly holds lectures concerning tax matters of Bitcoin
businesses. Anka makes sure that clients interested in trading
or using Bitcoins are well prepared when it comes to tax issues.
She has more than 15 years of professional experience as a
German attorney.
advises clients regarding regulatory issues in banking and
finance matters. He is an expert on Bitcoins and regulatory
issues surrounding Bitcoin businesses. He also has extensive
experience in the area of securities law where he counsels
private and institutional investors.
Europaallee 22
Frankfurt am Main, Germany D-60327
+49 69 76 75 77 810 Fax
e.weerda@winheller.com
winheller.com