Making Tax Digital was a key element of the government’s vision for modernising the UK tax system. Therefore, this means that from April 2023, millions of businesses, self-employed people, property landlords, and taxpayers will need to adapt. These individuals and companies would normally file a self-assessment tax return once a year. However, they will be required to keep records digitally and send summaries of their income and expenditure to HMRC four times a year, in addition to an annual declaration.
Cryptocurrency (or now more commonly cryptoassets) are digital currencies that can be transferred, stored, or traded electronically. Due to their technologically advanced nature, which is secured by cryptography, it is nearly impossible to counterfeit or double-spend on cryptocurrencies. As well as this, the emergence of new technologies has enabled cryptoassets to be created in various forms.
Bitcoin was the only cryptoasset on the market in 2009. Since then, bitcoin and its core blockchain technology have led to the birth of numerous other blockchains, each with its own cryptoassets. Currently, it is estimated that there are more than 7,800 cryptoassets today, with many more being created each month. Fortunately, these new native digital assets such as cryptocurrencies or tokenised traditional assets such as real estate and gold became a new asset class of resources with economic value that can be decentralised or controlled by a central authority like a Government or private company. Above all, decentralisation is in my opinion the most important factor of any cryptoasset. As for it to be used as currency, it having a pre-programmed monetary policy that is transparent to everyone is vital. No government or world events can change or impact the rules surrounding such currencies.
In conclusion, an asset class, cryptoassets are equipped to play an important role in today’s economies by revolutionizing the way we do business. They open doors for new business models and improve asset management — reducing friction and overhead costs, increasing liquidity, codifying rules and regulations, and increasing transparency throughout an asset’s life cycle.
Importantly, a cryptoasset is a digital representation of value or contractual rights — usually called a token — that is cryptographically secured by algorithms. It uses some type of blockchain technology or other distributed ledger technology (DLT) and can be transferred, stored, or traded electronically. Therefore, a cryptoasset inherits all of blockchain’s good features. Firstly, including, programmable, open, immutable, borderless, decentralised, permissionless and available around the clock. likewise, it can be used by humans as well as software agents and machines such as internet of things (IoT) devices. As a result, this is making it possible to turn any traditional, physical asset into a digital one.
So, what are you doing to bring your business into the digital age? I’m Rhys, CEO of Out Of This World Investments. I have an invested interest in cryptoassets, and Bitcoin. If you would like a conversation about Crypto, please get in touch.
Feel free to share this blog with your social networks!