In a recent post by Anita Posch, the discussion around the potential hazards of governments and large institutions acquiring substantial amounts of bitcoin has garnered significant attention. The primary concern raised is the possibility of these major holders exerting influence over Bitcoin's consensus rules, leading to potential censorship.
Mining Centralization vs. Censorship
While censorship poses a direct threat, mining centralization is deemed to be a more immediate concern. In the case of miners engaging in censorship, such actions would be sustainable only as long as a majority continues to support it, albeit at the cost of transaction fees. Once the censorship ceases, transactions would resume as usual.
Enforcing Censorship Through Protocol Rules
If economic nodes were to enforce censorship through new protocol rules, it could result in a soft fork. Such a scenario would prevent miners from retracting the censorship without causing a blockchain split between "upgraded" (censoring) and non-upgraded nodes, thereby initiating a hard fork. The value of each blockchain would then be determined by buyers and sellers, prompting concerns among some bitcoin enthusiasts regarding governments and institutions amassing a significant portion of the bitcoin supply.
Addressing Concerns and Potential Solutions
While the apprehensions raised are valid, it remains unclear whether governments or large institutions would take the risk of supporting a censorship fork of Bitcoin. Moreover, restricting governments or institutions from purchasing bitcoin could paradoxically constitute a form of censorship in itself. An effective countermeasure, as suggested by Nikolaus, is to refrain from selling bitcoin to entities like MicroStrategy.
This article presents a perspective on the issue at hand, with the opinions expressed solely representing the author's views and not necessarily aligning with those of BTC Inc or Bitcoin Magazine.
Frequently Asked Questions
How do I choose an IRA?
The first step to finding an IRA for you is understanding your account type. This is whether you want a Roth IRA, a traditional IRA, or both. You will also need to know how much you can invest.
The next step is to choose the best provider for you. Some providers offer both, while others can only provide one type of account.
The fees associated with each option should be considered. Fees vary widely between providers and may include annual maintenance fees and other charges. Some providers charge a monthly cost based on how many shares you own. Some providers charge only once a quarter.
How much should your IRA include precious metals
You can protect yourself against inflation by investing your money in precious metals, such as silver and gold. It's not just a way to save money for retirement.
While silver and gold have seen significant increases in the last few years, they are still safe investments since they don’t fluctuate as often as stocks. These materials are in constant demand.
The prices of gold and silver are generally predictable and stable. They tend to increase when the economy is growing and decrease during recessions. This makes them excellent money-savers, and long-term investment options.
10% of your total portfolio should be invested in precious metals. If you want to diversify even further your portfolio, that percentage could rise.
Is it a good idea to open a Precious Metal IRA
The answer depends on whether you have an investment goal and how much risk tolerance you are willing to take.
You should start an account if you intend to retire with the money.
This is because precious metals are more likely to appreciate in the future. You can also diversify your portfolio with them.
Additionally, silver and Gold prices tends to move together. This makes them an excellent choice for investors in both assets.
If you're not planning on using your money for retirement or don't want to take any risks, you probably shouldn't invest in precious metal IRAs.
What Precious Metals Can You Invest in for Retirement?
It is important to know what you have already saved and where money you are saving for retirement. If you don't know how much you currently have saved, start by taking an inventory of everything you own. You should list all savings accounts, stocks and bonds, mutual funds certificates of deposit (CDs), annuities, life insurance policies, annuities 401(k), real estate investments, and any other assets like precious metals. To determine how much money is available to invest, add all these items.
If you are under 59 1/2 you should consider opening a Roth IRA Account. A Roth IRA, on the other hand, allows you to subtract contributions from your taxable revenue. You won't be allowed to deduct tax for future earnings.
If you decide that you need more money you'll need another investment account. You can start with a regular brokerage account.
Can you make money in a gold IRA
To make money from an investment you must first understand how it works and secondly what products are available.
If you don’t know anything, it is best to wait until you have enough information so that you can trade effectively.
Also, you should find the broker that provides the best service possible for your account type.
You can choose from a variety of accounts, including Roth IRAs or standard IRAs.
If you have other investments such as bonds or stocks, you might also consider a rollover.
How Do You Make a Withdrawal from a Precious Metal IRA?
If your account is with a precious metal IRA firm such as Goldco International Inc., you may want to consider withdrawing funds. When you sell your metals, the value of those funds will be higher than if it was kept in the account.
Here are the steps to help you withdraw money from your precious-metal IRA.
First, find out whether your precious metal IRA provider allows withdrawals. Some companies offer this option while others do not.
Second, determine whether you can take advantage of tax-deferred gains by selling your metals. This benefit is available from most IRA providers. But, not all IRA providers offer this benefit.
Third, you should check with the provider of your precious metal IRA to determine if there are fees for these steps. Extra fees may apply for withdrawals.
Fourth, keep track of your precious metal IRA investments for at least three years after you sell them. You should therefore wait until January each year to calculate capital losses on your investment portfolio. Then file Form 8949, which provides instructions for calculating the amount of gain you realized.
In addition to filing Form 8949, you must also report the sale of your precious metals to the IRS. This is a step that ensures that all sales are taxed.
Finally, consult a trusted accountant or attorney before selling your precious metals. They can assist you in following the correct procedures and avoiding costly mistakes.
Are gold- and silver-IRAs a good idea.
This could be a great opportunity for those who want to easily invest in both gold or silver simultaneously. There are other options as well. You can contact us at any time with questions about these types investments. We're always happy to help!
Statistics
- You can only purchase gold bars of at least 99.5% purity. (forbes.com)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal so that you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- The IRS also allows American Eagle coins, even though they do not meet gold's 99.5% purity standard. (forbes.com)
- The maximum yearly contribution to an individual's IRAs is currently $6,000 ($7,000 for those 50 years or older), or 100% of earned income, whichever is less. (monex.com)
External Links
takemetothesite.com
kitco.com
regalassets.com
en.wikipedia.org
How To
How to buy silver with your IRA
How to purchase silver with your IRA – The best way of investing in silver and gold is to directly own physical bullion. Bars and silver coins are the most common form of investment. They offer liquidity, diversification, and convenience.
There are several options to purchase precious metals, like gold or silver. You can either buy them directly from their producers like mining companies or refiners. If you don't want the hassle of dealing with a producer directly, you can purchase them from a dealer that buys and trades bullion products.
This article will tell you how to start investing with your IRA in silver.
- Investing In Gold & Silver Directly – This is the best option to buy precious metals. This allows you to get the bullion directly and have it delivered directly to your home. While some investors choose to keep their bullion in their homes, others opt to store it at a storage facility where it's insured and protected. Protect your precious metal by storing it correctly. Many storage facilities provide insurance coverage against fire, theft, and damage. You could lose your investments due either to natural disasters, human error, or even insurance. This is why it is a good idea for precious metals to be stored in a safe deposit container at a bank/credit union.
- Online Precious Metals Buying – If you prefer not to transport heavy boxes of precious metal around, then buying bullion online is an option. Bullion dealers can sell bullion in various forms, including bars or coins. There are many different types of coins. Coins are generally lighter than bars and easier to transport. Bars come with a range of weights and sizes. Some bars are heavy and weigh hundreds of pounds while others only weigh a few grams. It is important to think about what you intend to use the bar for when choosing the type of bar that you should buy. If you plan to use it as a gift, you might want to consider something smaller. On the other hand, if you want to add it to your collection and display it proudly, you might want to spend a little extra money and get something larger.
- Dealers for Precious Metal – The third option is to buy bullion direct from dealers. Dealers usually specialize in one market area, such as silver or gold. Some dealers specialize in particular types of bullion like rounds or minted currency. Others may specialize in specific areas. And yet others specialize in bulk purchases. No matter what dealer you choose you will find that they offer great prices and flexible payment options.
- Buy Precious Metals Through Retirement Accounts. Although it is not considered an “investment”, investing in retirement accounts can provide exposure to precious metals. Investments in precious metals must be made through a qualified retirement plan to receive tax benefits as per Section 219 of IRS Code. These accounts include IRAs and 401(k), as well as 403(b), plans. These accounts are designed to help you save for retirement and often provide higher returns than other investment vehicles. Many of these accounts let you diversify your holdings across multiple types of metals. But what's the downside? You can't invest in retirement accounts. These accounts can only be opened by employees who are sponsored by their employers.
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By: Aaron van Wirdum
Title: Government and Institutional Acquisition of Bitcoin: Potential Risks and Implications
Sourced From: bitcoinmagazine.com/takes/governments-and-large-institutions-can-buy-all-the-bitcoin-they-want-except-yours
Published Date: Fri, 13 Dec 2024 10:46:58 GMT
