The US dollar and Australian dollar are the 1st and 5th most traded currencies in the world respectively. Despite the fact that the theme of this blog is the comparison of the United States and Australia, my first article has nothing to do with either currency. Rather, the booming use of cryptocurrencies in both nations. While this is an odd topic to choose for my first post of this blog, it is something which has been in the media a lot in the last year or so, most recently with a cryptocurrency ATM opening in Canberra, the capital of Australia.
A cryptocurrency is essentially internet money. There have been many different currencies developed with different features but in general they are decentralised, anonymous, provide instantaneous transactions and have low or zero transaction costs. Bitcoin was the first cryptocurrency and also currently is the most widely used. It became big international news when the price of one bitcoin shot up to US$1135.
While the price volatility of these cryptocurrencies is currently too high for strong acceptance within the general community for business transactions but a number of early adopters have begun to use the new payment methods because of the low transaction costs. The high market volatility is caused by the fact that the largest market for these currencies at the moment is pure speculation from an investment perspective, rather than the value of the currency being determined by the value of goods and services traded. With small market capitalisations, many of these new currencies are particularly susceptible to market manipulation strategies such as a pump and dump.
Take up of cryptocurrencies has been strong within certain groups of people. The anonymity and decentralised nature is attractive to people such as libertarians who believe strongly in freedom and free markets, or to those who have something to hide. Bitcoin was strongly associated with online drug marketplace Silk Road before it was closed down as it provided an untraceable method of payment. Online businesses see cryptocurrencies as attractive to avoid payment processing fees charged by companies such as PayPal which eat into their profits.
Given the 'border-less' nature of the internet, the take up of cryptocurrencies has been reasonably uniform throughout both the United States and Australia. The Australian Taxation Office (ATO) and Internal Revenue Service (IRS) have both recently released guidance on the tax treatment of cryptocurrencies. While not acknowledging the legitimacy of them as currencies, they are recognised in both states as personal personal property for taxation purposes. This contrasts to some countries such as Ecuador which have declared currencies such as bitcoin illegal.
A currency which has emerged in the last 12 months as a major player in the cryptocurrency world, and one which has strong links to both Australia and the United States, is Dogecoin. Dogecoin was founded in 2013 by Billy Markus from Portland, OR and Jackson Palmer from Sydney, Australia. The currency is based on the internet meme doge, which features a Shiba Inu dog. Dogecoin is young but has a strong internet community on Reddit and Twitter where the currency is mainly used to give small rewards to amusing posts and comments.
The strong internet community of dogecoin have had a remarkable impact on the world outside of the internet in the small life of the currency. Charitable efforts such as raising money for clean water in Kenya (doge 4 water) as well as sporting sponsorship events such as sending the Jamaican bobsled team to the Sochi 2014 Olympics have aided the growth and media presence of the currency.
These community sponsored efforts of dogecoin have also spread to both the United States and Australia. NASCAR driver Josh Wise secured the sponsorship of dogecoin for a number of races in the 2014 championship which has sparked the efforts of Australian V8 supercars driver Lee Holdsworth to look for the same deal. I for one would love to watch the doge car driving up Mount Panorama at Bathurst next year, although it might be a bit of a shock for the other drivers on the course.
Whether you agree that cryptocurrencies are a good idea or not, they have already started to have a significant impact on society and will only continue to grow in their use around the world. From Australia or America you can join in with the others around the world to sell your dollars and buy some bitcoin or some dogecoin or whatever takes your fancy and contribute to the crypto-economy.
If you enjoy our articles feel free to add your email address to the toolbar on the top right of the page and you will be notified every time we post a new article. We also gladly accept donations in bitcoin or dogecoin if you want to help us out to write more articles about all things American and Australian.
A cryptocurrency is essentially internet money. There have been many different currencies developed with different features but in general they are decentralised, anonymous, provide instantaneous transactions and have low or zero transaction costs. Bitcoin was the first cryptocurrency and also currently is the most widely used. It became big international news when the price of one bitcoin shot up to US$1135.
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| Source: Google Finance |
Take up of cryptocurrencies has been strong within certain groups of people. The anonymity and decentralised nature is attractive to people such as libertarians who believe strongly in freedom and free markets, or to those who have something to hide. Bitcoin was strongly associated with online drug marketplace Silk Road before it was closed down as it provided an untraceable method of payment. Online businesses see cryptocurrencies as attractive to avoid payment processing fees charged by companies such as PayPal which eat into their profits.
Source: thebitcoinchannel.com
Given the 'border-less' nature of the internet, the take up of cryptocurrencies has been reasonably uniform throughout both the United States and Australia. The Australian Taxation Office (ATO) and Internal Revenue Service (IRS) have both recently released guidance on the tax treatment of cryptocurrencies. While not acknowledging the legitimacy of them as currencies, they are recognised in both states as personal personal property for taxation purposes. This contrasts to some countries such as Ecuador which have declared currencies such as bitcoin illegal.
A currency which has emerged in the last 12 months as a major player in the cryptocurrency world, and one which has strong links to both Australia and the United States, is Dogecoin. Dogecoin was founded in 2013 by Billy Markus from Portland, OR and Jackson Palmer from Sydney, Australia. The currency is based on the internet meme doge, which features a Shiba Inu dog. Dogecoin is young but has a strong internet community on Reddit and Twitter where the currency is mainly used to give small rewards to amusing posts and comments.
The strong internet community of dogecoin have had a remarkable impact on the world outside of the internet in the small life of the currency. Charitable efforts such as raising money for clean water in Kenya (doge 4 water) as well as sporting sponsorship events such as sending the Jamaican bobsled team to the Sochi 2014 Olympics have aided the growth and media presence of the currency.
Source: http://rt.com/news/jamaica-sochi-bobsleigh-russia-961/
These community sponsored efforts of dogecoin have also spread to both the United States and Australia. NASCAR driver Josh Wise secured the sponsorship of dogecoin for a number of races in the 2014 championship which has sparked the efforts of Australian V8 supercars driver Lee Holdsworth to look for the same deal. I for one would love to watch the doge car driving up Mount Panorama at Bathurst next year, although it might be a bit of a shock for the other drivers on the course.
Source: wifflegif.com
Whether you agree that cryptocurrencies are a good idea or not, they have already started to have a significant impact on society and will only continue to grow in their use around the world. From Australia or America you can join in with the others around the world to sell your dollars and buy some bitcoin or some dogecoin or whatever takes your fancy and contribute to the crypto-economy.
If you enjoy our articles feel free to add your email address to the toolbar on the top right of the page and you will be notified every time we post a new article. We also gladly accept donations in bitcoin or dogecoin if you want to help us out to write more articles about all things American and Australian.
Written by: The Australian.
There is definitely a connection with America and Australia. And when it comes to light minds will be blown. :D
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