Decentralization is the transfer of authority and responsibility for public functions from central government to subordinate or quasi-independent government organizations and/or the private sector.
With the introduction of digital currency, decentralization became a household name. The theory, however, did not last long as the government implemented requirements for reporting all users' personal information on every exchange platform to track their purchases and sales of digital currency.
My definition of a decentralized life equals financial freedom, and financial freedom is tax-free income.
This may be a different take on investing in digital currency but hear me out. People in the United States and abroad seek cryptocurrencies to protect their funds from government oversight. Still, the reality is that the Internal Revenue Service (IRS) is going to get its cut one way or another.
The government did just that by introducing the Roth IRA in 1997.
Decentralization in this scenario is the transfer of authority from the central government to independent government organizations (Preferred Trust). The government encourages this by using a Roth IRA. Given that digital currency can be held in a self-directed IRA (SD IRA) and the investor making the decision without the influence of a plan fiduciary, this would imply the government is fostering the use of an SD IRA for digital currency investments. They also provide a way to invest that would remove their ability to earn any taxes from Roth IRAs of less than $10 million (as proposed by legislation in the Build Back Better Act). This proves there is more than one way to go about decentralization.
Now that you can avoid paying taxes, how do you avoid participating in the exchange platform's marketing tactics, such as smoke-and-mirror protections that do not exist?
You go to the old-school rules of how digital currency was initially intended to be held under private keys. In the United States, we could not help ourselves because we had to create all these exchange platforms to prove our level of sophistication when all it did was allow the government to impose regulations.
The whole concept of decentralization was to remove the middleman, so why would you buy your digital currency with a middleman in the least protective format known to digital currency? At Preferred Trust, we stand by our old-school approach to a more secure environment with cold storage (private keys) for every client. We were the first custodian in the country in 2017 to hold custody of digital currency, and our motto has not changed, regardless of the peer pressure to move to an exchange platform, which is hands down the easy way out. Call us crazy, but our clients believe that the safety of their digital currency is more important than the fancy apps and unsegregated custody approach to their hard-earned money.
Want to dive deeper into the intricacies of digital currency investing? Click here to download our Whitepaper.
If you're considering investing in digital currency with Preferred Trust, take advantage of our offer: we're waiving the $500 digital currency account setup fee when you mention this promo between April 1st and June 30th, 2024!