Bitcoin (BTC) is a digital currency created in 2009 that allows for anonymous, peer-to-peer, electronic payments. Bitcoin creation and transfer is based on an open source encryption protocol and is not managed by any central authority. Bitcoins can be transferred through a computer or smartphone without an intermediate financial institution. It is a free market currency that is not controlled or manipulated by any government or bank. Rather, managing transactions and issuing bitcoins are carried out collectively by the network of individuals that use the currency and run the software.
I view bitcoin as complimentary to precious metals and I own both. It has a number of benefits over traditional online payment methods, credit cards, bank accounts, etc…
✔ It allows for anonymous online payments outside of the purview of governments
✔ Your bitcoins cannot be easily frozen, seized or confiscated, unlike bank and brokerage accounts
✔ It has near zero counter-party risk
✔ It is a decentralized network that can’t be shut down or regulated
✔ It can not be counterfeited or diluted like fiat cash
✔ It is nearly free to send and receive bitcoins, cutting out the middlemen payment processors
✔ You can transfer wealth worldwide instantaneously, serving as the ultimate offshore account
✔ It is relatively secure, especially if you store your bitcoins on your computer, not an exchange
While bitcoin is not in a physical form with utility, in the way that gold is valued for durability or silver for conductivity, bitcoin does offer some of the same advantages as physical metals:
✔ It takes physical work (energy) in order to ‘mine’ bitcoins, much like it does for gold or silver.
✔ It is outside of the control of centrals banks and corrupt governments
✔ It preserves wealth (thus far), acting as a hedge against inflation and safe haven from confiscation (Cyprus)
✔ It is finite and limited in quantity like precious metals. Only 21 million will ever be created.
Bitcoin is accepted in trade by various merchants and individuals in many parts of the world. You can buy Amazon gift codes via bitcoin, purchase from an Ebay-like auction site, pay for a subscription to a dating website, order pizza online or buy a beer in several bars around the country.
I believe that digital currencies are here to stay and that bitcoin will likely continue to appreciate relative to dollars or other fiat currencies. I bought my first bitcoins under $10 and bought more on the last dip around $65. The price has since bounced back above $100, after correcting from a high of around $265, so the price movement can be very volatile. As of 7pm PST 4/23/13, bitcoin is up 123% in the past week, climbing from $65 to $145.
There are only 11 million bitcoins in existence now and the rate of growth will continue to slow until it hits a maximum of 21 million in the year 2140. Therefore, it only takes a small percentage of the population wanting some to push the price much higher. This rate of growth in the circulation of bitcoin stands in contrast to fiat dollars, where the quantity of USD has doubled in just the past few years in order to bail out the banking system from their derivatives gambling.
I find bitcoin efficient and cost effective for online transactions. I have used bitcoin to buy and sell goods and services and I even accept bitcoin as payment for my newsletter. Only time will tell how the adoption of bitcoin plays out, how high the price might go or whether a new and better digital currency will replace it. But for now, I have been delighted with the performance and utility of bitcoin and plan to continue buying more on dips under $100.
Digital peer-to-peer currencies have the ability to completely revolutionize the monetary system, so I believe it is important for everyone to get up to speed on bitcoin. This is why I put together a tutorial to help people understand the basics of bitcoin… The Beginner’s Guide to Bitcoin. This guide is designed to explain everything you need to get started and covers the following topics:
✔ What is bitcoin and how does the system work?
✔ How to safely purchase bitcoin via exchanges, Paypal or locally?
✔ How to set up a bitcoin wallet with client software, web software or smartphone apps?
✔ Which other digital currencies are worth considering and may appreciate in value?
✔ Where and how to spend your bitcoin for a variety of products and services?
I have made the 7-page Beginner’s Guide to Bitcoin available as a free download to all Gold Stock Bull Premium Members. This is just the latest premium member guide in a series of high-quality PDF reports that include:
✔ Guide to Purchasing and Storing Physical Gold/Silver
✔ Guide to Surviving Financial Crisis
✔ Guide to Buying a Home Safe
✔ Guide to Purchasing Income-Producing Land
✔ Guide to Protecting Your Stocks from Broker Fraud
✔ Guide to Establishing Residency/Citizenship in Costa Rica
✔ Beginner’s Guide to Bitcoin
As a premium member, you will have access to all of these guides and you will receive new guides as they become available. This is in addition to our top-rated contrarian investment newsletter (Road Less Traveled), which focuses on undervalued mining stocks. You will also gain instant access to the Gold Stock Bull model portfolio and receive email alerts whenever there is a buy or sell order placed.
To become a premium member today and get access to the Beginner’s Guide to Bitcoin and all other guides listed above, simply click here.
You can try it out for a month at just $39. During this month, you can download all of the premium guides, view the GSB model portfolio and download the latest contrarian newsletter. If you decide to stay as most members do, you can switch to the quarterly or yearly membership for as little as $25 per month. Otherwise you can cancel at any point within 30 days, you will not be billed again and you can keep all of the PDF guides.
With precious metals having just gone through the most severe correction in the past 30 years, I believe now is the time to be purchasing physical bullion (if you can find it) and quality mining stocks at deeply discounted prices. The last time precious metals corrected like this, physical bullion advanced by +58% in the following 12 months and the GDX gold miners ETF rocketed +176% higher. One of our favorite silver streaming stocks was up over 1500% in the two years following the 2008 correction!
Of course, there is nothing to say that the same thing must happen again, but I believe there is SIGNIFICANTLY more upside potential than downside risk at the current juncture. In fact, my view is that there has never been a better time to invest in precious metals and mining stocks since the very beginning of this bull market. When the prices are hitting new highs, I always get emails of frustration from investors wishing they would have bought lower. Well, NOW is the time to be buying lower as every technical indicator is flashing oversold and every fundamental reason for owning gold, silver and quality mining stocks has only strengthened in the past year.
The GSB Contrarian Report (Road Less Traveled) comes out monthly and includes a detailed analysis of our favorite gold and silver mining stocks, energy and agriculture producers and critical metals miners, including news updates, technical charts and much more. Whether you continue as a long-term member or just download the latest Bitcoin guide and newsletter, I am sure that you will find it well worth the $39 price of admission.