In a recent post by Anita Posch, the discussion about the potential risks associated with governments and large institutions acquiring significant amounts of bitcoin gained widespread attention. The main worry revolves around the possibility of these major holders influencing the Bitcoin consensus rules to enforce censorship.
Mining Centralization vs. Censorship
While censorship poses a direct threat, mining centralization is a more immediate concern in this context. If miners engage in censorship, it would only persist as long as a majority of miners support it, albeit at the cost of transaction fees. Once the censorship ceases, transactions would resume as usual.
The Impact of Economic Nodes
If economic nodes adopt censorship as part of new protocol rules, it could lead to a soft fork. In such a scenario, miners would struggle to backtrack from censorship without causing a blockchain split between "upgraded" (censoring) and non-upgraded nodes, resulting in a hard fork. The value of each blockchain version would then be determined by buyers and sellers, fueling concerns among some bitcoin enthusiasts regarding government and institutional accumulation.
Addressing the Concerns
While the apprehension is valid, it remains uncertain whether governments or large institutions would take the risk of supporting a censorship fork of Bitcoin. Moreover, attempting to prevent these entities from purchasing bitcoin could be perceived as a form of censorship in itself.
Nikolaus previously suggested a practical countermeasure: refrain from selling your bitcoin to entities like MicroStrategy.
It's essential to note that the views expressed in this article are solely those of the author and may not align with BTC Inc or Bitcoin Magazine's perspectives.
Frequently Asked Questions
How Do You Make a Withdrawal from a Precious Metal IRA?
First, decide if it is possible to withdraw funds from an IRA. Then make sure you have enough cash to cover any fees or penalties that may come with withdrawing funds from your retirement plan.
A taxable brokerage account is a better option than an IRA if you are prepared to pay a penalty for early withdrawals. If you decide to go with this option, you will need to take into account the taxes due on the amount you withdraw.
Next, figure out how much money will be taken out of your IRA. The calculation is influenced by several factors such as your age at withdrawal, the length of time you have owned the account and whether or not you plan to continue contributing to retirement plans.
Once you have determined the percentage of your total savings that you would like to convert to cash, you can then decide which type of IRA to use. Traditional IRAs allow you to withdraw funds tax-free when you turn 59 1/2 while Roth IRAs charge income taxes upfront but let you access those earnings later without paying additional taxes.
Once you have completed these calculations, you need to open your brokerage account. Brokers often offer promotional offers and signup bonuses to encourage people into opening accounts. It is better to open an account with a debit than a creditcard in order to avoid any unnecessary fees.
You will need a safe place to store your coins when you are ready to withdraw from your precious metal IRA. Some storage facilities can accept bullion bar, while others require you buy individual coins. Before you choose one, weigh the pros and cons.
Bullion bars are easier to store than individual coins. You will need to count each coin individually. On the flip side, storing individual coins allows you to easily track their value.
Some people prefer to keep coins safe in a vault. Some people prefer to store their coins safely in a vault. Whatever method you choose to store your bullion, you should ensure it is safe and secure so you can enjoy its many benefits for many years.
What is the tax on gold in an IRA
The fair value of gold sold to determines the price at which tax is due. You don't have tax to pay when you buy or sell gold. It is not income. If you sell it after the purchase, you will get a tax-deductible gain if you increase the price.
You can use gold as collateral to secure loans. Lenders seek to get the best return when you borrow against your assets. For gold, this means selling it. It's not guaranteed that the lender will do it. They might just hold onto it. Or they might decide to resell it themselves. You lose potential profits in either case.
If you plan on using your gold as collateral, then you shouldn't lend against it. It's better to keep it alone.
How much gold should you have in your portfolio?
The amount of money you need to make depends on how much capital you are looking for. For a small start, $5k to $10k is a good range. As your business grows, you might consider renting out office space or desks. This will allow you to pay rent monthly, and not worry about it all at once. You just pay per month.
Also, you need to think about the type of business that you are going to run. In my case, I am running a website creation company, so we charge clients around $1000-2000/month depending on what they order. You should also consider the expected income from each client when you do this type of thing.
Freelance work is not likely to pay a monthly salary. The project pays freelancers. You may get paid just once every 6 months.
So you need to decide what kind of income you want to generate before you know how much gold you will need.
I recommend starting with $1k-$2k in gold and working my way up.
Statistics
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so 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)
- Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (lendedu.com)
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
External Links
investopedia.com
- Do You Need a Gold IRA to Get Retirement?
- What are the Options? Types, Spreads, Example and Risk Metrics
cftc.gov
wsj.com
- Saddam Hussein's Invasion Helped Uncage a Bear In 1990 – WSJ
- Want to Keep Gold in Your IRA at Home? It's Not Exactly Legal – WSJ
bbb.org
How To
Investing gold vs. stocks
Gold investing as an investment vehicle can seem extremely risky these days. The reason behind this is that many people believe that gold is no longer profitable to invest in. This belief stems from the fact that most people see gold prices being driven down by the global economy. They think that they would lose money if they invested in gold. However, investing in gold can still provide significant benefits. Here are some examples.
One of the oldest currencies known to man is gold. There are thousands of records that show gold was used over the years. It was used by many people around the globe as a currency store. As a means of payment, South Africa and many other countries still rely on it.
Consider the price per gram when you decide whether you should invest in or not. It is important to determine the price per gram you are willing and able to pay for gold bullion. You can always ask a local jeweler what the current market rate is if you don't have it.
It is also worth noting that although gold prices have declined recently, the cost of producing gold has increased. Although gold's price has fallen, its production costs have not.
The amount of gold that you are planning to purchase is another important consideration when deciding whether or not gold should be bought. If you plan to buy enough gold to cover your wedding rings then it is probably a good idea to wait before buying any more. This is not a wise decision if you're looking to invest in long-term assets. Selling your gold at a higher value than what you bought can help you make money.
We hope our article has given you a better understanding of gold as an investment tool. It is important to research all options before you make any decision. Only then can you make informed decisions.
—————————————————————————————————————————————————————————————–
By: Aaron van Wirdum
Title: Concerns About Governments and Large Institutions Accumulating Bitcoin
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
