What is an asset? Are cryptocurrencies assets?

P

Protocol

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We all know that cryptocurrencies are not money, okay.

But are they assets?

What is the definition of an asset, and do they meet those criteria?

I do not wish to debate the value of any cryptocurrency, I wish to ask are they assets?

If one feature of an asset is that it can be traded, then cryptocurrencies meet that criteria.

What are the other features of an asset?
 
In accounting, an asset is a resource controlled by a business, individual, or government with the expectation that it will generate future economic benefits.

A current asset is something that is traded, a fixed asset is kept for the continued use of the business in order for it to continue to generate economic benefit
 
Protocol said:
But are they assets?
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yes they are assets....considered to be property, capital goods or commodities by taxing authorities....the only currency recognized by a taxing authority is the one issued by the domestic sovereign.....indeed non-domestic currency i.e. foreign currencies are considered to be property too for taxation purposes......what distinguishes an asset from a currency is that the holder needs to be mindful of cost basis and therefore gain on sale or losses.....the same way an Irish person in their brokerage account if holding GBP would be taxed for capital gains/losses for moving into GBP and back into EUR. The classic example would be an Irish person by stock in a british company....to buy the stock it necessities an FX conversion to GBP, then you buy the stock.....when selling and converting back to EUR's....you've got two asset cost basis to take account for.....what the stock has done.....and what GBP has done relative to EUR.

In this example GBP/Sterling is a currency....but from an Irish taxing authority perspective its an assets where the holder has a cost basis (in euros) and so upon liquidation a gain on sale or loss needs to be accounted for.

One can argue that stablecoins.....if they remain stable and denominated in your home currency....can be gain/loss neutral and so functionally like a currency....but again the majority of major stablecoins (USDT, USDC) are USD linked....so for a EUR based person you've got that same gain/loss on sale problem.
 
Yes of course debtors, bank accounts and prepaid expenses are current assets but I was explaining in terms of assets that could be disposed of. (Although I guess debtors can be sold) As in bitcoin can be traded and so can buildings but they have different functions within a business,

Classic cars, cash… works of art… all assets. Owned not owed.

Depends on the business, could be inventory or trading stock.
 
Protocol said:
Bitcoin is not money, as you can't spend it in ALDI or Dunnes Stores or TESCO, to buy goods or services.
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Aren't there retail outlets in Ireland that accept it? I remember one near where I used to work (GSM Solutions on Upper Abbey Street) being one of, if not the, first to accept it - think they're gone now though.
 
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Dr Strangelove said:
Is my stamp collection assembled between 1990 and 1993 an asset?
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It may be if any of the stamps are rare or valuable. You can look them up on ebay to see what they've sold for.

Their inability to generate income doesn't prevent them from being assets.
 
Protocol said:
Bitcoin is not money, as you can't spend it in ALDI or Dunnes Stores or TESCO, to buy goods or services.
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I appreciate that @Protocol and that is true, for now. But I cannot spend the Australian Dollar in Aldi, Dunnes or Tesco or the use the € to buy stuff in US, Japan or South Africa.

Regardless, the Aus Dollar, € and US$ are widely accepted as forms of money because they are accepted as such in their designated countries.

With bitcoin, I can open a Revolut account and buy and sell my bitcoin in exchange for €euro's.

I have read many of the bitcoin threads here and I know this topic has been discussed at length. Between us, let us agree to disagree for now on the money aspect.

Bitcoin is an asset as it has economic value.
 
Many contributors here state that CC are assets, okay.

I am not denying or arguing either way.

I am just interested that an asset can be created out of nothing.

Shares are assets, and generally produce income, but are backed by company assets.

Gold is an asset, but produces no income, and is nobody's liability.

Cash is an asset, but produces no income, and is the liability of the central bank.
 
Dr Strangelove said:
It is unique in the history of finance in neither generating zero income or having aesthetic value.
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True. A consequence of the digital age.

I'm fond of banknotes, the artwork design in some at least. My favourite is the Irish £1punt before euro came along. I'm not alone, many people share a similar interest and many pubs and bars display the different notes of all types of banknotes from around the world as a decorative feature.

Sadly those times are, or have passed. Digital currency use of bank cards and smartphones is killing the use of paper notes.

I haven't seen a bar or pub decorate with copies of flexible friends or images of Google or Apple Pay logos as yet.

It might be an idea though?
 
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