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In the simplest terms, cryptocurrency is money that only exists digitally or virtually. It uses cryptography and blockchain technology to regulate its generation and verify fund transfers.

Cryptocurrencies can be transferred between people without using an intermediary, like a bank. Cryptocurrencies can be bought peer to peer, through online exchanges or by participating in Initial Coin Offerings.

Bitcoin is the most well-known cryptocurrency. However, thousands of cryptocurrencies are available in the digital market right now. Ethereum, Ripple and Litecoin are other well-known examples.

Cryptocurrency and tax

Cryptocurrency is treated as property for tax purposes. There are no special tax rules for cryptocurrencies - ordinary tax rules apply.