In a recent post by Anita Posch, concerns were raised about the potential risks associated with governments and large institutions acquiring substantial amounts of bitcoin. The post garnered attention, partly due to a provocative comment from the community below it. The primary worry highlighted was the possibility of these major holders manipulating Bitcoin's consensus rules to enforce censorship.
The Threat of Mining Centralization
While censorship is a significant concern, the more immediate threat lies in mining centralization. If miners engage in censorship, it would be temporary as long as a majority continues to support it, albeit at the cost of losing transaction fees. Once the censorship ceases, transactions would resume as usual.
Enforcing Censorship Through Protocol Rules
If economic nodes also enforce censorship through new protocol rules, it could result in a soft fork. Miners would be unable to reverse the censorship without splitting the blockchain between "upgraded" (censoring) and non-upgraded nodes, leading to a hard fork. The value of each blockchain would then be determined by the market, raising concerns among some in the bitcoin community about the growing ownership of bitcoin by governments and large institutions.
Addressing Concerns and Countermeasures
While these concerns are valid, it is uncertain whether governments or large institutions would take the risk of supporting a censorship fork of Bitcoin. Moreover, there are limited measures to prevent these entities from acquiring bitcoin, as restricting such purchases would ironically constitute a form of censorship in itself.
One proposed countermeasure, suggested by Nikolaus, is simple yet effective: refrain from selling your bitcoin to entities like MicroStrategy.
This article represents a personal opinion and does not necessarily reflect the views of BTC Inc or Bitcoin Magazine.
Frequently Asked Questions
How much should your IRA include precious metals
It is important to remember that precious metals can be a good investment for anyone. You don’t need to have a lot of money to invest. You can actually make money without spending a lot on gold or silver investments.
You might think about buying physical coins such a bullion bar or round. Stocks in companies that produce precious materials could be purchased. Or, you might want to take advantage of an IRA rollover program offered by your retirement plan provider.
You will still reap the benefits of owning precious metals, regardless of which option you choose. They are not stocks but offer long-term growth.
And, unlike traditional investments, their prices tend to rise over time. This means that if you decide on selling your investment later, you'll likely get more profit than you would with traditional investing.
What precious metals do you have that you can invest in for your retirement?
Gold and silver are the best precious metal investments. They are both simple to purchase and sell, and they have been around for a long time. These are great options to diversify your portfolio.
Gold: Gold is one of man's oldest forms of currency. It is also extremely safe and stable. It is a good way for wealth preservation during uncertain times.
Silver: Silver has been a favorite among investors for years. It's a great option for those who want stability. Silver, unlike gold, tends not to go down but up.
Platinium: Another form of precious metal is platinum, which is becoming more popular. It's resistant to corrosion and durable, similar to gold and silver. It is, however, more expensive than its competitors.
Rhodium. Rhodium is used as a catalyst. It is also used as a jewelry material. It is also quite affordable compared with other types of precious metals.
Palladium – Palladium is an alternative to platinum that's more common but less scarce. It's also much more affordable. It is a preferred choice among investors who are looking to add precious materials to their portfolios.
Is it a good retirement strategy to buy gold?
While buying gold as an investment may seem unattractive at first glance it becomes worth the effort when you consider how much gold is consumed worldwide each year.
Physical bullion bars are the most popular way to invest in gold. However, there are many other ways to invest in gold. It's best to thoroughly research all options before you make a decision.
If you don’t need a safe place for your wealth, then buying shares of mining companies or companies that extract it might be a better alternative. If you are looking for cash flow from your investment, buying gold stocks will work well.
You also can put your money into exchange-traded funds (ETFs), which essentially give you exposure to the price of gold by holding gold-related securities instead of actual gold. These ETFs can include stocks of precious metals refiners and gold miners.
Who is the owner of the gold in a gold IRA
An individual who has gold is considered to be a “form of money” by the IRS and subject to taxation.
You must have gold at least $10,000 and it must be stored for at the least five years in order to take advantage of this tax-free status.
While gold may be a great investment to help prevent inflation and volatility in the market, it's not wise to keep it if you won't use it.
If you plan to sell the gold one day, you will need to report its worth. This will affect how much capital gains tax you owe on cash you have invested.
Consult a financial advisor or accountant to determine your options.
Statistics
- 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)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- 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)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
External Links
finance.yahoo.com
law.cornell.edu
- 7 U.S. Code SS 7 – Designation of boards of trade as contract markets
- 26 U.S. Code SS 408 – Individual retirement accounts
irs.gov
bbb.org
How To
The History of Gold as an Asset
From the very beginning of time, gold was a currency. It was widely accepted around the world and enjoyed its purity, divisibility and uniformity. It was also traded internationally due to its high value. However, since there were no international standards for measuring gold at this point, different weights and measures existed worldwide. One pound sterling, for example, was equivalent in England to 24 carats, and one livre tournois, in France, to 25 carats. A mark, on the other hand, was equivalent in Germany to 28 carats.
The United States began issuing American coin made up 90% copper, 10% zinc and 0.942 fine-gold in the 1860s. This led to a decline in demand for foreign currencies, which caused their price to increase. This was when the United States started minting large quantities of gold coins. The result? Gold prices began to fall. The U.S. government needed to find a solution to their debt because there was too much money in circulation. To do so, they decided to sell some of the excess gold back to Europe.
Most European countries distrusted the U.S. Dollar and began to accept gold as payment. Many European countries started to accept paper money as a substitute for gold after World War I. The price of gold has risen significantly since then. Even though the price fluctuates, gold is still one of best investments.
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By: Aaron van Wirdum
Title: Government and Large Institutions Influence on Bitcoin Ownership
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
