Frequently Asked Questions

graph TD 0[Bitcoin] 1[Digital Gold ] 2[Value] 3[utility] 4[Regulation] 5[Blockchain] 6[Mining] 7[Protocol] 8[Digital signature] 9[Buying/Holding] 10[Trading] 11[Wallet] 12[Losing Bitcoin] 0-->1 1-->2 1-->3 1-->4 0-->5 5-->6 5-->7 5-->8 0-->9 9-->10 9-->11 9-->12

Table of content:

Digital Gold

Why does Bitcoin have value?

The value of Bitcoin has increase from less than a 1000th of a penny in 2009 to a peak of $64 thousand dollars in 2021; and it's continuing to rise.

The main question everyone has is "why?". To answer that we would like to split that question into two.

  1. Why is Bitcoin able to hold it's value?
  2. Why is the value of Bitcoin increasing?

Why is Bitcoin able to hold it's value?

Scarcity and security.

We are living in a world of abundance, everyday we have more of everything. Yet in a world of supply and demand, value comes from scarcity. The only two limited commodities exist in todays world are Gold and Bitcoin; as such economy dictates that they must hold their value.

Bitcoin has been subject of hacking attacks for over a decade. The Blockchain ecosystem has been hurt but never broken; and every time it has emerged stronger. Once you hold Bitcoins, you have peace of mind that no one else is able to take them away from you. Although that is not to say you canbe complicit (see common mistakes).

Why is the value of Bitcoin increasing?

Every day the U.S. government is printing more Dollars to meet the demand of the global economy. While these inflationary policies are necessary to run the global economy, they have the undesired side effect of eroding the purchasing power of your savings.

Holding Bitcoin long term is the antidote to inflation. Some don't necessary bet on Bitcoin, rather they bet against the dollar.

What are some use cases of Bitcoin?

Bitcoin is currently being used as a store of value. Especially in developed nations with unstable currencies and governments, citizens of these nations can have peace in mind knowing that they have a safety nest in case tragedy strikes. With the added benefit of keeping their wealth from corrupt governments (Anonymity you can read more about it here)

Is this even legal?

The quick answer is yes.

There are two simple rules we should be following to stay within the law with any business: Pay your taxes and follow the regulation.

There is nothing inherently troublesome with Bitcoin. You are allowed to buy, sell, hold and transact as you would do with any commodity such as gold or silver.

If you are worried about any potential fallouts , we suggest you hold your Bitcoins through an intermediary such as a fund who will manage all regulatory concerns for you.

How do I pay taxes?

You pay taxes on your bitcoin as you would with any other asset. Capital Gains tax. Additionally we have strategies in place to reduce your taxes even further. One option would be to invest through your IRA.

Will the government come after me?

Most regulatory concerns come about when businesses want to make Bitcoin more accessible to consumers. It's only in this case where the U.S. government wants to protect every day investors.

The responsibility of protecting investors within the United States governments falls on the shoulders of an agency called the Securities and Exchange commission. Very simple the SEC is on your side.

I have heard Bitcoin is anonymous. How does that impact me?

Bitcoin is no more anonymous than cash. If not, it is more transparent. All transactions are stored in the Bitcoin blockchain, and as such you would be able to view them as you would do with any accounting book.

Anonymity is not inherently Illegal in itself. You have the right to privacy, no one else should know your finances; expect for specific cases when you disclose information to the U.S. Government (see taxes).


Buying and Holding