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July 31, 2014

Why Wikipedia now accepts Bitcoin

And Las Vegas gets its first Bitcoin ATM.

By Joe Curtis

Wikipedia has started accepting Bitcoin donations after repeated calls for its inclusion from members.

Wikimedia Foundation, which runs the crowdsourced online encyclopedia, said this community demand as well as recent guidance from the US Internal Revenue Service (IRS) led the non-profit organisation to accept the digital currency.

Chief revenue officer Lisa Gruwell said the foundation would work with Bitcoin wallet Coinbase to convert the cryptocurrency to US dollars.

"We identified a new way to work around past technical challenges, as well as to minimize the legal risks of accepting Bitcoin," she wrote in a blog post. "Through our work with Coinbase, a Bitcoin wallet and payment processor, we’re able to immediately convert Bitcoin to US dollars, requiring minimal technical implementation on our end.

"Since we now also have guidance on how to account for Bitcoin, there is a clear understanding of how to legally manage it."

This guidance, issued back in March by the IRS, outlines how Bitcoin is treated as property for tax purposes, meaning capital gains tax would be due on the difference between bitcoins’ market value on the day purchased, and the market value on the day they’re sold on – effectively getting people to pay tax on any profit made while holding them.

That shouldn’t be too troubling for Wikipedia, if the foundation does as it says and converts them immediately to dollars via Coinbase.

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The news comes as Las Vegas got its first Bitcoin ATM yesterday, inside a busy souvenir shop. The ATM’s operator, Robocoin, hopes to benefit from 100,000 daily visitors to the store.

The move represents another early foray for cryptocurrency into the gambling world.

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