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Security and Potential of Blockchain Technology

Rethinking Bitcoin Taxation

Author

Ishaan Mahajan
February 08, 2024

Welcome to ChainDecoded —Your guide to the world of Web3, Crypto and Blockchain. You will receive one email every Thursday with various news, concepts and facts going on in this week.

Unveiling the Security and Potential of Blockchain Technology

A blockchain is a distributed database or ledger shared among a network of computers, known as nodes. It consists of blocks linked together via cryptography, storing data in a secure and decentralized manner.

Transactions are verified and added to blocks by network nodes, ensuring the security and integrity of the data stored within the blockchain. Each transaction undergoes a specific process, leading to its irreversible inclusion in the blockchain.

Blockchain technology enables data to be spread out among several network nodes, preventing any single entity from controlling the information. This decentralization enhances security and trust in the network.

Is Blockchain Secure?

Blockchain technology achieves security through cryptographic techniques and consensus mechanisms. Once a transaction is recorded on the blockchain, it becomes immutable and tamper-proof, ensuring the integrity of the data.

Bitcoin vs. Blockchain

While Bitcoin is the first real-world application of blockchain technology, blockchains have various uses beyond cryptocurrencies. They can be utilized to immutably record a wide range of data points, including transactions, votes, property records, and smart contracts.

In summary, blockchain technology is a secure and decentralized database that has the potential to revolutionize various industries by providing transparent, secure, and efficient methods of recording and managing data.

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📈 Ether Flirts With $2,400 Level—What’s Next For The Cryptocurrency? Link

  • Ether prices have rallied, reaching as high as $2,389.12 and currently trading at around $2,360.

  • Factors driving these gains include technical upgrades and speculation about SEC approval for an ether-based ETF.

  • Key support levels identified by analysts include $2,000, $2,050, and the high $2,200s.

  • Resistance levels to watch are around $2,340, mid $2,300s, $2,700, $3,000, and $3,500. Failure to clear resistance could lead to a downward trend toward $2,150 - $2,200 or even the low $2,000s.

Blockchain In 7 Minutes

| What Is Blockchain | Blockchain Explained | How Blockchain Works |

🔍 Rethinking Bitcoin Taxation: Navigating The Challenges Of IRS Policy. Link

  • Bitcoin taxation currently follows the traditional framework for capital assets, involving a cost basis and gain or loss on sale.

  • The challenge arises when Bitcoin is used as a medium of exchange, leading to every transaction potentially being a taxable event, which is impractical and against the decentralized ethos of Bitcoin.

  • Advocates propose a "de minimis exception" similar to foreign currency transactions, exempting small Bitcoin transactions from taxation to align with existing tax law precedents.

  • Lightning transactions further complicate tracking for tax purposes, as they are invisible on the blockchain, highlighting the need for updated policies suited for the digital realm.

🚀Solana Foundation and CoinDCX announce ₹25 crore grant programme for Indian Web3 developers. Link

  • CoinDCX, Solana Foundation, and Superteam announce a ₹25 crore grant programme for Indian Web3 developers, aiming to foster innovation in the Solana ecosystem.

  • The initiative aims to bolster India's status as a global hub for Web3 innovation by nurturing talent and advancing blockchain software development.

  • Scheduled for launch on January 26, 2024, aligning with the Republic Day theme "Viksit Bharat" (Developed India), the programme seeks to tap into India's growing Web3 market.

  • Solana Foundation grants are open to various entities, including individuals, teams, governmental bodies, non-profits, corporations, universities, and academic institutions, with a focus on driving blockchain education and public adoption.