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  • FIRST POST
    • graffias
    • By graffias 22nd Nov 17, 7:59 PM
    • 31Posts
    • 24Thanks
    graffias
    Transfer Pension To Bitcoin
    • #1
    • 22nd Nov 17, 7:59 PM
    Transfer Pension To Bitcoin 22nd Nov 17 at 7:59 PM
    Is there ANY way to withdraw my whole defined contribution pension plan (from a company I used to work for many years back) - it is worth about £24,000 in long term equities (split between UK, Global, and Emerging Market) - and put the whole lot into Bitcoin? I am age 51 and virtually certain that Bitcoin will by end of 2019 be worth over £100,000 per coin. With the central bank printing presses running overtime as at no time in history, and them buying up stocks to inflate prices to a massive bubble again unlike any ever seen before - it has to be INSANITY to have £24,000 invested in the stock market for the next few years whilst Bitcoin is on the cusp of becoming a global monetary store of value and currency. By contrast the pensions bubble is going to completely explode.

    I don't want to lose out on £400,000GBP that this will be worth in 2019 - so is there any way to save this money - how do I get the money out of the pension scheme, where I know its going to be worth virtually nothing by the time I retire if I don't take action ?

    Any advice from pension experts much appreciated - thank you.
Page 4
    • graffias
    • By graffias 1st Dec 17, 8:26 PM
    • 31 Posts
    • 24 Thanks
    graffias
    I would first off say my comments are not intended to be financial advice of any kind, and these have to be our own individual decisions, unless we want to hire a financial professional to manage our funds for us.

    I would say though if somebody wants to take a position, the quickest way would first be to set up an account on LocalBitCoins.com then buy from a top-rate 'seller' (this works similar to EBay), someone with say 10,000 previous successful transactions and a 100% positive feedback. Then your Bitcoin would be stored on your LBC account.

    However its not recommended to hold your main Bitcoin long-term on any exchange or wallet service - because as with the Mt Gox collapse, things can go seriously wrong with these services. Though for a shorter time period the risk is maybe fairly small. You would need to learn in the meantime how to secure your Bitcoin by putting the keys into 'cold storage'. One way this can be done is using a 'hardware wallet' - you need to figure out how this works, and then transfer your funds to it from LBC once you fully understand it.

    The other thing that you should do is just open up multiple exchange accounts - 4 which I have used are Bitfinex, Bittrex, Binance, Kraken. When verification (ie uploading scanned driving licence or passport etc) is requested it might take several weeks to actually get verified (it took me 6 weeks on Kraken) - so do that straight away. Though it depends on how much you are transacting whether you need verification or not. There are numerous other major exchanges also - there's no harm in setting up accounts with all the main ones.

    You can then move Bitcoin quite easily (takes a couple of minutes once you learn how to do it) between these exchanges, for a quite small fee - so if you don't know how to get the cold storage set up yet, you can do this in the meantime if anything worrying appears in the news about your exchange. For example, I hold a small amount of an 'altcoin' called QTUM, which has been doing quite well recently, but I don't know yet how to secure it offline in cold storage so I stored it on an exchange - Bittrex. That was until some bad news came out that Bittrex were locking out many of their customers and giving no explanation - so I shifted my QTUM funds to Bitfinex. Then a few weeks later some bad news came out about Bitfinex (which is otherwise a very good exchange) and I had to move it again, to Binance. I am hoping that the problem with Bitfinex will not come to anything as they are probably the top Bitcoin exchange in the world.

    So these multiple exchange accounts are a major help and you should definitely have them, even if you hardly use most of them.

    Once you get your hardware wallet organized then it is a HIGHLY secure storage method for Bitcoin. There is another method called an 'air-gapped' system with a 'paper wallet' but that requires more technical familiarity. There's perhaps some other ways to secure it also.

    One thing I would say if you have Bitcoin held for you in some kind of fund that is managed for you - examine the fine print that establishes the exact relationship between you and them. By analogy, you can store money per gram in gold and silver now - via BullionVault.com and they seem a very good company. You can buy/sell gold/silver on their exchange per single gram, via your bank account, and it is highly secure. The fees are very modest, so small amounts can be stored also. Effectively that means you can easily hold your money in gold/silver, and it is physically stored in a highly secure vault in Zurich. If you want to 'spend' some of it, you just sell at the current 'spot' price on their trading board, the proceeds are then transfered straight to your nominated bank account within a couple of hours.

    The critical feature of this service is the nature of the relationship between you and BullionVault - it is purely custodial, it is called 'allocated gold', and is governed by 'bailment law' - which means you hold legal title to the gold, BV is only a 'custodian' - so if they go bankrupt then they cannot legally take your gold. That contrasts with a bank account, where you are merely a CREDITOR to the bank, and you will stand in line awaiting your money back if they go bankrupt (and there will be many people before you in that line). The problem with BV is that if there is a major financial crisis then governments could seize the gold, including gold in secured vaults - desperate goverments can do almost anything they want - and they have done this before (see Roozevelt in 1930's). So with gold and silver the best way is to buy actual physical bars from somewhere like BullionByPost.co.uk and be careful where you store it. With Bitcoin similarly the safest way to store it is in 'cold storage', as opposed to with even a very trusted third party.

    As regards the questions about what Bitcoin actually is - the answer is somewhat disappointingly prosaic - it is actually an 'internet protocol'. It belongs more in the world of technology than it does in the world of finance. The Bitcoin system is created by an open source community of software developers, and the entire project is publicly visible (and here it is :- https://github.com/bitcoin/bitcoin). This is the same type of community that creates the Linux operating system that powers a large part of the Internet, and all kinds of computer devices such as smartphones, supercomputers, TV sets, and even cars. A community like this is thus ALREADY trusted with vital services that humanity is relying upon every single day. That is why our financial system is moving over to this community. I have a book on my bookshelf - its called 'Just For Fun' - it is the autobiography of Linus Torvalds the Finnish computer programmer who first invented the 'kernel' of the Linux OS, the innermost core that lies inside every Linux device - of which there must now be literally billions. Linus started the Linux revolution - and it grew like wildfire - there was no central control - everything worked by CONSENSUS. And Linus just did it for fun - and that is what is driving this whole technological revolution - many people want to work on something creative and technological, they don't just want a steady office job at the bank with a paycheque.

    Its going to be hard for any other cryptocurrency to surpass Bitcoin, because of the strength of Bitcoin's developer community - in fact Bitcoin's resiliance owes everything to the technical competence of this community, and their ability to innovate, and to prepare for the future - and they are preparing on a grand scale. They are constructing a system right now called the 'Lightning Network' that will facilitate MILLIONS of transactions per second, and that's what all the fuss about 'Segwit' was about - laying the foundation for this system. Bitcoin's reputation has been hard earned after 9 years of every kind of setback, and continual ridicule and scorn from the mainstream press (you can actually look online and find almost 200 'obituaries' of Bitcoin). Bitcoin is now like the TCP/IP network protocol upon which the Internet is based - even though a more theoretically perfect network protocol might be devised, it will have little chance of replacing TCP/IP which is in regular use by millions of people every day for essential tasks.

    Likewise Javascript is a much derided computer pogramming language denounced by 'purists' - but again it is running on almost every single web page, and powers many essential online services we use every day - it is not perfect, far from it - but it WORKS and people could get started with it at the time they needed it - not some time next year or next decade. And that is the position Bitcoin occupies now. What the development community have offered up with Bitcoin is something that works, that is fit for purpose, that has been extensively battle tested, that has achieved critical mass, and that people are now starting to trust with their own money. There is now no coin that can achieve the same without going through the same as what Bitcoin has just been through. Not even one created by a government or a banking consortium, because no amount of money or even power can control an open source development community, whose complete ethos is openness and freedom.

    It is interesting to see how some of the former naysayers of Bitcoin are starting to change their minds as it begins to dawn on them what Bitcoin really is, eg this guy :-
    https://www.youtube.com/watch?v=ihLDEI4sWGI

    Somebody was asking about the altcoins as investments - some of these I think could sky-rocket - you have to do a lot of due diligence and find out who is behind them - I put small amounts in these 8 coins, and they have went up by about 67% on average over past 2-3 months (though some are losers) :-
    TenX, OmiseGo, Qtum, SALT, AdEx, Litecoin, Populous, Veritaseum

    I would put at least 85% of a crypto portfolio in Bitcoin though - but that's just my preference. Beware there is a LOT of scamming in the crypto space - especially in the altcoins.

    Re the doomsday scenario - I hope a more controlled demolition will happen, but it might not be that easy. I have about 4 weeks of tinned food, couple dozen bottles of Volvic water, stove and multiple gas canisters from Halfords, candles etc. Failure of Just-In-Time delivery system would mean food shortages within 2-3 days all across the country, and I've heard some major carriers are in trouble.

    So just my twopence worth once more, I am a MAJOR Bitcoin evangelist, and like to tell people about it - you should check out some of the people I mentioned above - eg Trace Mayer gives a really excellent explanation :-
    https://www.youtube.com/watch?v=xZItja4nzmU&t=159s
    YouTube has hundreds of crypto related channels, so there is probably one for every taste. Check out multiple sources though before making any decisions - doing this helped me make some very GOOD decisions, and avoid some very BAD ones.
    Last edited by graffias; 01-12-2017 at 8:38 PM.
    'When I said I wanted to be a comedian everyone laughed - they're not laughing now'
    • Economic
    • By Economic 3rd Dec 17, 11:50 AM
    • 146 Posts
    • 96 Thanks
    Economic
    Bitcoin: an investment mania for the fake news era
    https://www.ft.com/content/c84caffc-d683-11e7-a303-9060cb1e5f44
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