How to Make a Tax-Free Fortune With Cryptocurrencies

SPECIAL REPORT

How to Make a Tax-Free Fortune With Cryptocurrencies

By Jeff Brown

A Brownstone Research Publication

Special Report

2021

How to Make a Tax-Free Fortune With Cryptocurrencies

By 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 governmentbacked organizations and were "given" to the technology community free of royalties or license fees.

In 2005, Cerf and Kahn both won the Presidential

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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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