SPECIAL REPORT

A Brownstone Research Publication

How to Make a Tax-Free Fortune With Cryptocurrencies

By Jeff Brown

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How to Make a Tax-Free Fortune With CryptocurrenciesBy Jeff Brown, Editor, The Near Future Report

In 1974, the foundation for all modern forms of communication and data transfer was established. Vint Cerf and Bob Kahn authored a paper called “A Protocol for Packet Network Intercommunication” while working at DARPA (Defense Advanced Research Projects Agency).

The paper contained the details of transmission control protocol (TCP) and internet protocol (IP). Combined, these technologies are the foundation for every email, text message, file transfer, and phone call that we send or receive.

Years later, in 1989, Tim Berners-Lee proposed what became the World Wide Web as we know it while working at CERN (European Organization for Nuclear Research).

Berners-Lee outlined hypertext transfer protocol (HTTP), which enabled text to be displayed on a computer screen with references to other text through the use of hyperlinks. This allows us to click on a “linked” image or bit of text and be taken to another web page. Anyone who has a computer or mobile phone uses this technology every day.

The proposal also included the first internet web server and the structure for naming websites on the World Wide Web.

How important are these protocols? Could we live without them?

Consider this:

• 22 billion text messages are sent every day

• 222 million phone calls are made on Skype every day

• 269 billion emails are sent per day

• Facebook Messenger and WhatsApp support more than 60 billion messages a day

I could go on. But ultimately, society wouldn’t function as we know it without these protocols.

Where the Money Was Made

How much are these protocols worth? How much do you think Cerf, Kahn, and Berners-Lee made from the development of these protocols?

This will probably come as a surprise… absolutely nothing.

These protocols were developed at government-backed organizations and were “given” to the technology community free of royalties or license fees.

In 2005, Cerf and Kahn both won the Presidential

Special Report 2021

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Medal of Freedom, among many other accolades. Berners-Lee was knighted in 2004 and received a long list of other honors as well.

Sure, the careers of these three gentlemen flourished because of their involvement in developing these protocols. But the money was made elsewhere.

In fact, some of the largest, most successful, and profitable companies were built on the backs of these invaluable protocols.

Netflix essentially became the most successful multichannel pay-TV operator in the world with 208 million subscribers and a $255 billion valuation as of this writing.

Facebook’s suite of applications generates tens of billions of dollars in revenue every year. The company is now valued at more than $986 billion.

Google became the world’s largest advertising company, valued at more than $1.5 trillion as of this writing.

And Amazon is the world’s largest distributor of goods. The company’s market capitalization is more than $1.7 trillion.

What do all these companies have in common? They are all applications that run on top of these fundamental protocols underlying the modern internet. The technology companies that built these applications captured all the value from those internet protocols. And the creators of these revolutionary protocols captured nothing at all.

Without a licensing or royalty structure, there was simply no way to capture value from the success of these key internet protocols.

Today, we face a similar opportunity… except we are primed to profit.

A revolutionary type of technology is going to upend our economy and transform centuries-

old industries. It is the most disruptive piece of technology since the internet, and it has already created a long list of millionaires and approximately a dozen billionaires.

You see, unlike the protocols underpinning the internet, there is a way to stake a claim in this new piece of technology. And I’ve discovered a way for anybody, regardless of their technological expertise, to participate. You don’t even have to use a computer if you don’t want to.

Keep reading to see how.

The Rise of Blockchain

The next generation of revolutionary protocols is upon us. Better yet, through the use of mathematics, computer science, and cryptographic technology, there is now a way to invest in and earn extraordinary returns on these protocols.

The technology that I am referring to is called blockchain technology. The word “blockchain” may be most recognizable as being associated with the popular cryptocurrency bitcoin. But the term is generic.

Popular blockchains today include not only bitcoin but also Ethereum, Cardano, Polkadot, and NEO, among others. And unlike the internet protocols that were designed to transfer data and information, blockchain technology is designed as a protocol to transfer assets and value.

And what makes the technology so incredible is that any financial transaction can be conducted between two parties without any “trusted” intermediary like a private bank, title company, central bank, or exchange. Better yet, these transfers of assets can take place from a matter of minutes to nearly a second.

Blockchain technology enables the removal of friction in financial transactions, which makes them almost instantaneous. This is something that takes your traditional brick-and-mortar

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intermediary three days to do. And blockchains can do it at a fraction of the cost.

We Cannot Trust the “Trusted” Intermediaries

As we have learned time and again, these “trusted” intermediaries are not at all trustworthy. It wasn’t that long ago when the LIBOR scandal uncovered that many of the most “trusted” financial institutions in the world were manipulating key interest rates for their own benefit – and, of course, at the expense of others.

The London Interbank Offered (Interest) Rate (LIBOR) underpins more than $600 trillion in derivatives. It essentially sets the cost of money for corporate debt, mortgage debt, and other financial transactions.

And banks like Barclays, Deutsche Bank, JPMorgan, UBS, Citigroup, Bank of America, and RBS (Royal Bank of Scotland) were right in the middle of these manipulations.

To give a sense of the scale of the corruption, Deutsche Bank agreed to combined regulatory and civil settlement payments in excess of $4 billion associated with the LIBOR scandal.

UBS agreed to pay $1.5 billion in settlement fines back in 2012. And the lawsuits go on and on – regulatory fines, civil settlements, bondholder lawsuits, etc.

Very similar things happened with the manipulation of foreign exchange rates (Forex). It was discovered in 2013 that currency dealers at financial institutions had been manipulating Forex rates for financial gain.

The same cast of characters was involved. Billions of dollars of fines have already been paid.

And then there’s Wells Fargo…

You’ve likely heard about how the banking giant

created an estimated 3.5 million “ghost accounts” for its customers. It did this in order to charge customers banking fees for accounts they never signed up for.

The corruption is seemingly endless.

A Completely New Form of Monetary Policy

In comparison, blockchain technology is cryptographically secured, immutable (cannot be changed), and nearly impossible to manipulate. By design, it removes the potential for corruption or manipulation.

Value is usually transferred through a blockchain’s own cryptocurrency. Each blockchain typically has a finite supply, or controlled supply, of its own cryptocurrency by design. Think about that… a blockchain has its monetary policy written right into its software code.

For example, in the case of the bitcoin blockchain, bitcoin is its cryptocurrency… its means of transferring value. There will only ever be 21 million bitcoins produced. The bitcoin supply is finite.

In the world of blockchains and cryptocurrencies, there is no central bank that can just “print” more fiat currency at the press of a button.

In fact, one way cryptocurrencies are “mined” is by “miners.” The best way to think about miners is that they are participants on a blockchain’s network. They provide computing power, storage, and energy to keep a global network of blockchain “nodes” running.

The economics of this design have already proven to be a great success. The basic incentives were put in place for network participants to support the network without knowing one another and for users to use the network due to things like security, immutability, lower costs, fast settlement times, and ease of use.

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Blockchain and the Network Effect

The creation and adoption of blockchain technologies and cryptocurrencies are a classic example of the network effect. Think about the first telephones. When there were only two telephones, only two people could call one another.

When there were five telephones, there were 10 different combinations of calls that could take place. Today, that number is in the billions.

This concept of the network effect became popularized by Metcalfe’s Law. Bob Metcalfe was one of the inventors of Ethernet technology and a cofounder of the famous internet networking company 3Com.

Metcalfe’s Law stated two simple things:

• The cost of a network is directly proportional to the number of Ethernet cards installed.

• The value of a network is proportional to the square of its users.

While Metcalfe developed his law specifically for internet networking purposes, it couldn’t have been truer for valuing cryptocurrencies.

More specifically, the concept that the value of a network is proportional to the square of the number of its users.

As an example, let’s have a look at the nearby chart of the price of bitcoin and number of network users.

Since August 2011, bitcoin has risen more than 675,000%. The precise returns may have changed by the time you read this research. Meanwhile, the number of wallets holding bitcoin is up over 8,797% since then. This is a simple way to measure users on the network.

The takeaway is clear. The dramatic rise in price is directly related to the network effect. As there are more users on the network and a larger number of transactions, the value of the network increases. And we’re just getting started.

How Does Blockchain Mining Work?

Transactions on any blockchain are grouped into “blocks.” To confirm those transactions in a block, miners must solve a complex mathematical problem. This is done by using a brute force method of applying computing power and essentially guessing millions of times to find the answer to a problem.

The miner who discovers the answer broadcasts that answer to its global blockchain network for confirmation. Once confirmed via a consensus model, the miner is awarded the blockchain’s

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The value of the network is directly related to the value of its cryptocurrency. And the reason that the bitcoin blockchain network has grown so quickly is simple… utility.

The bitcoin blockchain allows value (money) to be transferred more quickly, safely, and securely anywhere on the planet.

It enabled something that was not available to the world ever before. And the creators, early developers, and early participants of the bitcoin blockchain protocol are now millionaires… Some are even billionaires.

And I have wonderful news: It is not too late.

The Blockchain Revolution Is Just Getting Started

If you are reading this now, I can tell you that we are still in the early stages of development of blockchain technologies.

Basic infrastructure is still being built out.

As evidence, there are more than 38.7 million digital wallets in existence that hold the largest cryptocurrency asset, bitcoin. Furthermore, most users who hold cryptocurrencies have multiple wallets. I would speculate that there are far fewer individuals actively participating in this market.

There are more than 7.8 billion people on the planet and more than one billion credit card users… so we have a long way to go.

And with the right time horizon, many more millionaires will be minted with well-placed investments in blockchain technologies that provide utility for transactions of value.

But I’ll be the first to tell you, investing in the cryptocurrency and digital token space is risky.

The Risks of Crypto Trading

Because we are still in the early stages of industry development, many of the products that will make things simpler and safer to use do not exist yet.

And the regulatory environment for cryptocurrencies and digital tokens has not yet been well established. It is a work in progress. Even the definition of a digital token as a security or as a token used as a method of exchange for service has not been clearly defined.

It is important to mention that while the Bitcoin blockchain itself has never been hacked, major Bitcoin exchanges have been.

In August 2016, Bitfinex was hacked. $72 million worth of bitcoin was stolen at the time (120,000 bitcoin).

Even worse, in February 2014, another exchange, Mt. Gox, was hacked at an incredible loss of over $450 million worth of stolen bitcoin and an additional $27.4 million missing from its bank accounts. Mt. Gox immediately plunged into bankruptcy that March.

At the time, Mt. Gox was responsible for about 70% of the Bitcoin exchange markets in the world. Its missing 850,000 bitcoins were the equivalent of 7% of all bitcoins in distribution at that time. And while 200,000 bitcoins have been recovered, only $91 million in assets were tracked down and distributed to claimants.

The remaining 650,000 bitcoins that were stolen and not recovered are worth billions today. Many customers with accounts at Mt. Gox lost just about everything. Their bitcoins are gone, and there is no way to get them back.

More recently, in November 2019, Upbit was

cryptocurrency as a reward. Miners also earn cryptocurrency by receiving payments from network participants through small transaction fees.

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hacked. The stolen funds amounted to $51 million at the time of the attack (342,000 ether).

I don’t write about these things lightly.

I’ve been an active investor in blockchain technology for years, and every transaction concerns me. When you send a cryptocurrency to an address, you better get it right. If you make a small mistake or the address is just slightly wrong, your money is gone.

There is no phone number to call, no email support, and absolutely no recourse. There is nothing you can do.

And even the most sophisticated cryptocurrency investors have been hacked. A common technique is hijacking or “porting” a user’s mobile phone. Incredibly, the attack is fairly simple.

The hackers repeatedly call up wireless phone carriers like AT&T, Verizon, T-Mobile, and Sprint and make a plea to the customer service agent that they lost their phone and that the victim’s phone number should be ported over to their new mobile phone.

Eventually, a customer service agent will make the mistake of complying. When that happens, the hacker can reset the passwords for every account that the victim has associated with that mobile phone number. That includes any cryptocurrency wallets associated with that phone number.

One bitcoin entrepreneur was quoted as saying, “Everybody I know in the cryptocurrency space has gotten their phone number stolen.” And while industry executives are hard at work finding ways to minimize these hacks, they are reluctant to speak about them.

Why? Because they are concerned that it might affect their reputation as well as damage the industry, which has been enjoying explosive growth.

For me, understanding the risks and using techniques to minimize them is critical in an emerging space such as blockchain technology and cryptocurrencies.

Editor’s Note: To learn more about what to avoid when investing in cryptocurrencies, read this report.

It has been frustrating for me because there have been few simple and safe ways to invest in this exciting trend.

I have been passionate about finding ways for normal investors to get exposure to cryptocurrencies without needing to be technologically savvy and without taking on unnecessary risk.

One way to participate is by simply opening a Coinbase account. Coinbase is a cryptocurrency exchange that functions like a bank account. You can store U.S. dollars and buy bitcoin, ether, Litecoin, and other popular cryptocurrencies.

Coinbase is easy to use, and it performs the task of managing the digital wallet on behalf of its customers. This is much simpler and safer than managing an independent digital wallet by yourself. Why? Well, if you lose your private key to your digital wallet, you can never access your funds again. They are as good as gone.

Coinbase has done a great job making a relatively easy-to-use interface for its customers. It has also been progressive in being buttoned-up in terms of regulations. And while I highly recommend Coinbase, it is not perfect. It still requires the user to be comfortable working online with an account and sending/receiving funds. It also might be hacked in the future.

There is no way to know what the outcome might be in the event that happens.

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The Safest and Simplest Way to Purchase Cryptocurrencies

My goal was simple: to find a way that investors could gain exposure to key cryptocurrencies without ever having to establish and manage a digital wallet or figure out how to buy cryptocurrencies through multiple exchanges.

Better yet, I wanted to be able to recommend a way that investors could do this over the phone, with a broker who can guide them through the process.

And I found just that… Bitcoin IRA.

Bitcoin IRA is unique in that it takes the hassle and risk out of buying and storing cryptocurrencies.

Investors can transfer all or a portion of a traditional IRA, Roth IRA, SEP IRA, SIMPLE IRA, 403(b), or even a 401(k) into a Bitcoin IRA. Simply fill out the paperwork, send it in, and once the funds have transferred from your old IRA into your Bitcoin IRA, you’ll be ready to make your purchase of cryptocurrencies.

And the Bitcoin IRA product can be structured as a traditional or Roth IRA. For a traditional IRA, that means that under current tax law, your account will receive tax-deferred status, allowing it to appreciate in value without immediate tax liability. After you reach the retirement age of 59 ½, you will be able to withdraw funds without any penalties. But you’ll still have to pay income tax. In the case of a Roth IRA, however, all capital gains are tax-free at the retirement age, making a Roth IRA an ideal retirement product for this asset class.

And while the name of the company might suggest that you can only invest in bitcoin, the truth is that the service is more of a “cryptocurrency IRA.” There are multiple digital tokens on offer to include. I’ve listed the top three that I recommend in this report.

And here is the best part. Investors do not need to worry about wiring funds to a third party, working with a cryptocurrency exchange, transferring cryptocurrencies, managing a cryptocurrency wallet, or safekeeping private keys for those wallets. And if you don’t want to, you don’t even need to use a computer.

Once your U.S. dollar funds are deposited into your Bitcoin IRA, investors can pick up the phone, speak with a broker at Bitcoin IRA, and place an order for cryptocurrencies. The team at Bitcoin IRA takes care of the rest.

And my research is 100% independent and objective. My publisher and I have no commercial relationship at all with Bitcoin IRA. We receive no benefit from Bitcoin IRA when our readers come their way.

My goal is to find unique and profitable investment ideas for my readers.

And if I think about the next 10 years, nothing is more exciting in the technology investment space than blockchain technology. It is also one of my biggest frustrations. It is an area of deep expertise for me, but there have been so few safe and easy ways to access these kinds of investments.

That is why Bitcoin IRA is such an attractive opportunity. I can think of no safer way to access this asset class than this vehicle. At the time of writing, the Securities and Exchange Commission (SEC) has not approved any exchange-traded funds (ETFs) for any cryptocurrencies. The only products in the market are geared toward accredited investors, so Bitcoin IRA is unique.

In fact, Bitcoin IRA is the first company that was approved by the Internal Revenue Service (IRS) for self-directed cryptocurrency IRAs.

About the Company

Bitcoin IRA is a private company based in

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Sherman Oaks, CA, which was founded in 2015 by a team of entrepreneurs whose backgrounds are in alternative retirement assets.

The company now has more than 100,000 users and $1 billion in assets under management.

Bitcoin IRA utilizes the services of BitGo, which is the world’s largest processor of on-chain bitcoin transactions. BitGo also acts as a custodian for any digital assets you store in your IRA.

BitGo, headquartered in Palo Alto, CA, the heart of Silicon Valley, was founded by two technology executives with deep experience in online security and financial technology.

BitGo is a private company backed by some of the best investors like Goldman Sachs, JumpCapital, and the Digital Currency Group, as well as Founders Fund, one of the most successful venture capital firms in the Valley.

BitGo supports more than $20 billion worth of transactions every month and works with the best cryptocurrency exchanges. This means it has both the scale and access to liquidity to buy/sell cryptocurrencies for Bitcoin IRA.

Another benefit of establishing investment positions in cryptocurrencies through this Bitcoin IRA product is that investors’ accounts are insured. If you are at all familiar with the cryptocurrency space, this is very unusual.

BitGo, as the custodian, holds a $700 million policy for digital assets under management with the company. The insurance provider is Lloyd’s of London.

Investors’ cryptocurrency assets will be held in a digital wallet maintained by BitGo.

The company maintains three duplicates of investors’ private keys to their digital wallets. These keys are held in what is called “cold storage.” This means that the keys are safe, as

they are offline. There is no way those keys can be stolen.

The best part is that investors don’t have to worry about any of this. Bitcoin IRA takes care of everything.

Bitcoin IRA also offers self-trading of digital assets on its platform. Users can also use “crypto swaps” to exchange digital assets without first having to convert them to fiat.

For example, if you wanted to exchange some of your bitcoin for ether, you could “swap” these digital assets without first having to convert your bitcoin to fiat and then purchasing ether on an exchange.

There is a cost to provide this level of safety, security, ease of use, and insurance for a product like this. I’m going to outline the fee structure to set up the Bitcoin IRA on the next page.

At face value, the set-up fees are expensive, especially for amounts less than $100,000, but I’ll tell you why they aren’t that unreasonable.

Any time an investor converts from U.S. dollars into bitcoin or ether on a platform like Coinbase, the conversion fee is 1.5%. So if you want to convert from U.S. dollars into bitcoin and eventually back from bitcoin into U.S. dollars, it will cost 1.5% when you buy and 1.5% when you sell.

For the listed fees, Bitcoin IRA manages the relationship with BitGo and Lloyd’s of London. And it has a team of brokers and customer service representatives to make buying cryptocurrencies a simple and secure experience that can be done over the phone.

Furthermore, IRAs, by definition, are places to store assets for extended periods of time. They are traditionally thought of as conservative investment vehicles. Yet I can’t think of a better place to put cryptocurrencies.

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That’s what makes their newest program all the more exciting. Bitcoin IRA also pays members up to 6% per year on cash and crypto with their IRA Earn program.

This makes Bitcoin IRA even more valuable. We can combine extended holding times with compounding. This is very powerful.

Here’s a quick example to highlight how compounding can grow your holdings.

Right now, Bitcoin IRA pays Earn users 2% interest on their bitcoin (BTC) per year. The yield is paid in the asset being held. So if you held 1 BTC in your account at the end of the year it would equal 1.02 BTC.

At the end of the first year, this might not seem significant. But after 20 years this comes to 1.4568 BTC.

When we consider the growth potential of bitcoin over this period, the extra 0.4568 BTC can be meaningful… That amount could potentially turn into a six-figure number.

If you believe, as I do, that cryptocurrencies are in the early stages of development and have massive potential for appreciation over the next decade and beyond, an IRA is a great place for this asset class.

Bitcoin IRA FeesInitial Investment Amount Fee (One-Time Charge)

$3,000–49,999 12.5%$50,000–99,999 10%

$100,000 or more 7.5%Subsequent Transactions Fee (Per Transaction)Sell Orders (any amount) 1%

Buy Orders (any amount after initial investment is sold) 5%

Custodial FeesAccount Fees Fee

Custodial Setup FREEAnnual Account Fee $240 (charged annually)Wallet Holding Fee 0.05% (charged monthly, excludes cash)Processing Fees Fee

Transaction Fee Buy/Sell 1% (per transaction)Pre-registration/Transfer Out $75 (per asset, max $300)

Conversion $75

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And with a tax-deferred vehicle like an IRA, investors don’t have to worry about any volatility in cryptocurrencies. Simply establish positions, leave them alone while the industry develops and the cryptocurrencies appreciate in value, and enjoy the compounding effect.

To make things easier for readers, Bitcoin IRA has offered a special discount for readers of The Near Future Report.

For a limited time, Bitcoin IRA is offering a 35% discount on its platform fees for my subscribers. Platform fees are associated with trading on the platform, account setup, or rolling over an existing IRA.

Simply use the discount code “BROWNSTONE” when completing an order with Bitcoin IRA.

There is a dedicated support line for all readers. While I do recommend that you begin the registration process online (see the “Action to Take” below), the dedicated support number is +1-844-500-5882.

For additional details on the basket of cryptocurrencies that I recommend building a

position in, please see my other special report here. I strongly encourage you to read this report; it contains valuable information on the investment thesis that I’m sure you will benefit from.

With regard to establishing a basket of these currencies in your IRA, here is what I recommend:

For portfolio purposes, we’ll be tracking the following allocation model:

• 40% ether (ETH)

• 30% bitcoin (BTC)

• 30% litecoin (LTC)

For example, if you have an IRA account of $25,000, this will break down as follows:

• $10,000 worth of ether (ETH)

• $7,500 worth of bitcoin (BTC)

• $7,500 worth of litecoin (LTC)

For any IRA accounts of $25,000 or greater, I recommended the same 40%/30%/30% (ether/bitcoin/litecoin) basket.

BROWNSTONE

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Action to Take: Establish an account at Bitcoin IRA by clicking here. This will take you directly to Bitcoin IRA, where you can begin the process of setting up your own self-directed cryptocurrency IRA. I recommend that investors go online first and register for an account. After that is done, if you have questions, you can call +1-844-500-5882 for support. This is a dedicated line for The Near Future Report readers.

And remember, for a limited time you can use the promotion code “BROWNSTONE” to receive a 35% discount on any fees you may incur.

Risk Management: IRAs – by definition – are long-term investment vehicles. For that reason, I will not be recommending a stop loss for any of our recommended positions. Volatility is normal in the digital assets space. My recommended action will be to establish a position, let the industry mature, and let our holdings grow in value in the years to come.

Important Note: Neither I nor my publisher receives any compensation from Bitcoin IRA for recommending its services. As an independent publisher, our responsibility is to provide objective research for the benefit of our readers.

Regards,

Jeff Brown Editor, The Near Future Report

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