The Death of Bitcoin – Better Asset Protection Available

Bitcoin Will Bite the Dust

Kevin Dowd and Martin Hutchinson

Bitcoin is the most radical innovation in the monetary space for a very long time. It is an entirely private monetary system that runs itself and does not depend on trust in any central authority to honor its promises. Instead, it relies on trust in the Bitcoin community or network that verifies transactions and maintains the integrity of the system. This system of distributed trust creates bitcoins and produces an automatic, tamper-proof bitcoin money supply process. 1 As such, it avoids the dangers of discretionary monetary policy—namely, quantitative easing, manipulated interest rates, and the need to rely on wise men or women to withstand political pressure or successfully forecast the future. Indeed, under Bitcoin there is no monetary policy at all. There is just an automatic monetary rule dictated by the Bitcoin protocol designed in 2009 by an anonymous programmer using the alias Satoshi Nakamoto.

Bitcoin has been widely hailed as a success and has won a substantial following. Unfortunately, the underlying economics of Bitcoin mean that it is unsustainable and in all likelihood will be remembered as a failed experiment—at best a pointer to some superior successor. A first-pass intuition into Bitcoin can be obtained from a comparison with the stone money in Milton Friedman’s (1992) case study, “The Island of Stone Money.” In this story, the people of the island of Yap in Micronesia used as money large round limestone disks transported from the nearby island of Palau. These were too heavy to conveniently move around, so they were placed in prominent places. When ownership was to be transferred (e.g., as part of a dowry, inheritance, or ransom payment), the current owner would publicly announce the change in ownership but the stone would typically remain where it was and the islanders would maintain a collective memory of the ownership history of the stones. This collective memory ensured that there was no dispute over who owned which stones. Similarly, in Bitcoin, the record of all transactions, the “blockchain,” is also public knowledge and is regarded as the definitive record of who owns which bitcoins. Both the stone money and Bitcoin share a critical feature that is highly unusual for a monetary system: both systems operate via a decentralized collective memory. On February 11, 2009, Nakamoto gave an explanation of the thinking behind Bitcoin in an e-mail announcing its launch: “The root problem with conventional currency is all the trust that is required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. . . . With e-currency based on cryptographic proof, without the need to trust a third-party middleman, money can be secure and transactions complete.” Cryptocurrencies, however, face the problem of “double-spending.” As Nakamoto notes, “Any owner could try to re-spend an already spent coin by [digitally] signing it again to another owner. The usual solution is for a trusted company with a central database to check for double-spending, but that just gets back to the trust model. . . . Bitcoin’s solution is to use a peer-to-peer network to check for double-spending.”  Consequently, “the result is a distributed system with no single point of failure.”

The fact that Bitcoin has no single point of failure is highly significant: it means that it cannot be brought down by knocking out any particular individual or organization.3 It can only be brought down by knocking out the whole network or one of the underlying building blocks on which the network depends.4 It can and does operate outside of government control: Bitcoin is a dream come true for anarchists, criminals, and proponents of private money.

Despite its success, the Bitcoin system is unsustainable due to a design flaw at the very heart of the system. The problem is that Bitcoin requires competition on the part of “bitcoin miners” who validate transactions blocks, but this competition is unsustainable in the long run because of economies of scale in the mining industry. Indeed, these economies of scale are so large that the bitcoin mining industry is a natural monopoly. Furthermore, there are signs that competition in this industry is already breaking down. Once that happens, the system will no longer be able to function as it hitherto has. Its key attractions (decentralization, absence of a single point of failure, and anonymity) will disappear; there will no longer be any reason for users to stay with it; and the system will collapse

 

How Will you Protect Your Assets ?

Going Offshore / Offshore Incorporation / Tax Havens : Frequently Asked Questions ( FAQ)

Going Offshore / Offshore Incorporation / Tax Havens : Frequently Asked Questions ( FAQ)

WHAT IS AN OFFSHORE CORPORATION? 

A corporation is an entity recognized by law as a separate “person” with limited liability. A corporation has the option to sell shares, the right to sue and be sued, and has perpetual existence.

HOW ARE OFFSHORE CORPORATIONS USED?

Offshore corporations may be used to own and operate businesses, issue shares, bonds or otherwise raise capital, guarantee obligations, hire employees, buy goods and services, sell goods and services, make contracts, rent office space, maintain checking and saving accounts, and maintain retirement plans for employees. Although most offshore corporations are private and closely held, some are publicly traded on major stock exchanges.

WHAT ARE ARTICLES OF INCORPORATION? 

The Articles of Incorporation is the document which establishes the corporation and contains basic information such as the name, share structure, and purpose of the corporation.

WHAT ARE BY-LAWS? 

The By-laws, or in some jurisdictions “Articles of Association”, are rules the corporation creates for its shareholders, officers, and directors. By-laws are adopted by the Board of Directors as one of the first organizational steps in setting up a corporation. Upon instruction, we can adopt a standard set of By-laws for a new corporation. Unlike Articles of Association, By-laws are usually maintained internally but may be publicly filed if requested.

WHAT DOES A CORPORATE SEARCH REVEAL? 

A corporate search will reveal the name of the corporation, the date of existence, amendments, and any other publicly filed document. Under Panamanian law for example, there is no requirement that the names of corporate officers, directors or shareholders be filed in any public registry. Such information, therefore, remains confidential.

WHAT ARE Shelf COMPANIES? 

Shelf Companies are ready-made, never used corporations that have been created to meet a client’s immediate needs.

WHAT IS A REGISTERED AGENT? 

A Registered Agent is required to ensure that the corporation has an assigned representative at a known address to receive all service of process (legal notices) on its behalf. The Registered Agent forwards these documents to the address of record of the corporation.

WHAT ARE BEARER SHARES?

Bearer share certificates do not indicate the name of the owner. The certificate is endorsed in blank such that the person having physical possession of the document is the owner. Bearer shares facilitate the transfer of assets because transfer of ownership is accomplished simply by the transfer of the certificate.

WHAT ARE REGISTERED SHARES? 

Registered share certificates indicate the name of the owner on the document. The name of the shareholder is also recorded in the internal corporate records of the company. Although the registered owner is recorded in the corporation’s internal records, no public registry of shareholders is maintained. The share registry is an internal corporate document available only to directors, officers and shareholders, under conditions specified in the jurisdiction’s corporate statute.

Isn’t moving assets offshore illegal?

There is nothing illegal about moving assets offshore. It is when you move the assets into accounts offshore and do not declare their existence to the tax authorities that you break the law. Any assets over which you have control, domestic or offshore, are probably liable to taxes in your home jurisdiction.

Why should I move offshore?

Moving some of your assets offshore provides you access to modern (and ancient) methods of protecting your assets and reducing your taxes using trusts, international corporations, foundations and other legal entities.

What is Asset Protection?

Asset Protection is a term used to describe the concept of legally transferring your assets into a legal entity which will protect them from attack by frivolous litigation, seizing from government, attack from an estranged spouse – in fact anything which may threaten your hard earned wealth.

 

How do I start?

The best place to start is to contact us – at no cost / no fee or obligation

The Key : The Most Important Step: Take Action

 

 

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