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Copyright 2017 The Financial Freedom Foundation - All Rights Reserved -Page 1 of 31
Table of ContentsINTRODUCTION .3I. EPIC CHANGES.4A. HISTORICAL TREND OF MONEY.4A.1. MONOPOLY OF MONEY CREATION & DISTRIBUTION.4A.2. DISTRIBUTED MONEY CREATION & DISTRIBUTION.6A.3. EPIC WEALTH TRANSFER DURING THE TRANSITION.7B. THE EARLY STAGES OF THE EPIC WEALTH TRANSFER.8II. SELECTED TECHNICAL TERMINOLOGY - EXPLAINED.10A. CRYPTO-CURRENCY.10A.1. SMART CONTRACTS.10A.2. PUBLIC KEYS AND PRIVATE KEYS.11A.3. CRYPTO-COINS.11A.4. BLOCK-CHAINS.11A.5. LEDGER.12A.6. COIN VS. TOKEN.13B. MINERS.13B.1. MINING POOLS.13B.2. CLOUD MINING.14B.3. PROOF-OF-WORK .14B.4. PROOF-OF-STAKE.15C. TYPES OF COINS.16C.1. BITCOIN.16C.1.1. BITCOIN'S LIMITATIONS.16C.2. ETHEREUM.17C.3. ALT-COINS.19D. CRYPTO-CURRENCY EXCHANGES.20E. INITIAL COIN OFFERINGS (ICOs).21F. WALLETS.22F.1. FIRST-TIME COIN PURCHASE.23III. PASSIVE INVESTMENT OPPORTUNITIES.24A. MINING RIGS.24B. BUY-AND-HOLD.27C. AUTO-TRADING.28D. HEDGE FUNDS.29E. SYSTEMIC RISKS.30CONCLUSION.30Copyright 2017 The Financial Freedom Foundation - All Rights Reserved -Page 2 of 31
The Crypto-Currency EvolutionThe financial repercussions of the crypto-currency evolution will be epic. Crypto-currencies are“the internet of money”. It is like the go-go days of the dot.com era of the 1990s when theinternet was new and millions were made by both large and small investors alike.INTRODUCTIONThe crypto-currency evolution has progressed to the point that it is no longer just a fad, cannot besuppressed, and is actually ready for widespread commercial use, although it is still in the early stageswhere opportunity abounds. 1,000% returns will not be uncommon, although the number of scams willbe increasingly prevalent.We have prepared this high-level special report to offer doctors, entrepreneurs, small-business owners,investors, and crypto-currency newbies a framework for understanding what is going on and guidanceon how to correctly position themselves for maximum benefit.The Financial Freedom Foundation (F3) is an educational non-profit organization that builds people'sfinancial intelligence. F3 has an exclusive Private Member Association F3 Mastermind Group forthose who want more detailed, actionable information.In this report we will first describe the epic nature of this monetary-system change. In doing so, wewill use some technical terms which may not be familiar to you, yet.These technical terms are explained in the second part of this special report. It is important tounderstand the big picture first, and then drill down into the details second.In the third section of this special report, after covering the technical terms so that you can understandwhat is being said, we will then explain several ways to convert your newfound understanding of theepic monetary-system change into epic profits, using passive investment methods.In other words, after reading this special report, you should be able to 1. Understand the technical jargon used in videos and news reports about Bitcoin2. Impress your friends at a cocktail party with how much you know about this hot topic3. Make some serious coin (no pun intended) as Bitcoin and others virtual currencies becomemainstream.Copyright 2017 The Financial Freedom Foundation - All Rights Reserved -Page 3 of 31
On that note, crypto-currencies are beginning to be referred to as “cryptos”, so for the rest of thisreport, we will also refer to them as cryptos.I. EPIC CHANGESWhy does this matter? Why should I care? What difference could this make in my day-to-day life,aside from some profits from speculating on the price of Bitcoin?A. HISTORICAL TREND OF MONEYThe crypto evolution is another facet of the greater trend of moving away from a centralized fiatcurrency system and moving towards a more distributed economic system. Ever since PresidentNixon shocked the world in 1971 when he canceled the convertibility of the US Dollar to gold, theworld monetary system has been based on fiat currencies that have no intrinsic value and are printedexclusively by privately-owned monopolistic “Central Banks”.Money is something that functions as a medium of exchange, is a store of value, serves as anaccounting unit, can be subdivided, and is defensible. Historically, a variety of things have functionedas money, from cowrie shells to wampum beads, to tulip bulbs, gold and silver coins, paper receipts onthe storage of gold and silver, and over the past several decades debt instruments called “Notes” thathave no intrinsic value, but are issued by central governments and private banks (Federal Reserve).A.1. MONOPOLY OF MONEY CREATION & DISTRIBUTIONIn recent centuries, the monopoly of creating money has been reserved for those at the top of thewealth/power pyramid. The wealthy power brokers of the early 1900s created the Federal ReserveBank. Then, through the Bretton Woods Agreement after World War II, they gained control of theworld financial system. The US Dollar became the world reserve currency, and only wealthy powerbrokers have had permission to print or digitize that money into existence; then they have the gall tolend that money to the world and charge interest on the money they had just created!Since Bretton Woods, the world financial system has functioned as a tool to create wealth for those atthe top of the economic pyramid. They call it the “trickle-down” effect, but the wealth never tricklesdown very far. The well-connected, wealthy individuals and mega-corporations use low-interest debtfrom central banks and private banks to purchase income-producing assets. More recently, the trendhas also included Fortune 500 companies buying back their publicly-traded stock at an accelerated rate(as a way to artificially boost their earnings-per-share), as well as cutting jobs by using the low-interestdebt to invest in labor-saving automation.This is why the past 15 years in the US has been marked by trillions of dollars of new debt, stockmarket growth despite the absence of real earnings growth, and no increase in the median income ofthe workers.Copyright 2017 The Financial Freedom Foundation - All Rights Reserved -Page 4 of 31
As Charles Hugh Smith so clearly articulates in his book, “A Radically Beneficial World: Automation,Technology, and Creating Jobs for All,” the current system of money creation and distribution IS THEVERY CAUSE of the concentration of wealth and the destruction of jobs. What's worse, those who arenot already wealthy are charged a higher rate of interest, which effectively transfers a large chunk oftheir income to the banks.In other words, the current world financial system is a system designed by the wealthy to funnel moneyto the rich and siphon money away from the poor. The only possible outcome of such a system is aconcentration of wealth and power, and rising inequality, as history has demonstrated to be true.The current fiat-currency system is, at its core, a centralized global system that relies on large financialinstitutions acting as "trusted third parties" to regulate the creation of money and the flow of money(lending, payment processing and settlement, clearinghouses for financial instruments). While theredoes exist paper money, most of the money in the system is digital currency created by computers atthe banks.However, the monopoly on creating digital money is starting to be challenged by technology thatenables the decentralized/distributed creation of digital currency in the form of cryptos. Money nolonger has to be created by banks. It does not have to be borrowed into existence and distributedthrough those at the top of the economic pyramid. Now, it can be created digitally and distributedthrough decentralized/distributed networks. This is game-changing.Here is a graphic that illustrates the difference between centralized, de-centralized, and distributedsystems.Copyright 2017 The Financial Freedom Foundation - All Rights Reserved -Page 5 of 31
Distributed systems are more robust and more egalitarian than centralized systems because in adistributed network, the responsibilities and rewards are shared more equally, and if any node in thesystem fails, the system does not fail.The distributed cryptos systems are re-defining the way we create money, distribute that money, andfinance projects. The two main cryptos, Bitcoin and Ethereum, are new global currencies that are notyet widely circulated. The users currently number in the millions, but it is rapidly growing towards thebillions.Disruptive technologies can create booms that exceed our wildest dreams. Cryptos are unique in theirscale, their scope of application, and their speed of adoption. The new crypto technology has thepotential to be even more disruptive than the internet, making it a once-in-a-generation investmentopportunity. These new “digital assets” are not correlated with traditional investments. Cryptos are anentirely new asset class, with superior returns. With the current growth rate of adoption of this newtechnology, it is not unusual for one of these cryptos to generate 30% returns in a single day.A.2. DISTRIBUTED MONEY CREATION & DISTRIBUTIONBanks currently have a limited role in the creation or distribution of this new money. Banks have beenworking to produce their own versions of this type of currency (Ripple, FedCoin, etc.), but have notseen mass adoption, because those who are already in the crypto space are aware of the bigger pictureto begin with, which is why the new cryptos do not need banks to clear and process electronicpayments in this new system. It is a distributed peer-to-peer financial system, albeit still in its infancystages. Bitcoin was just the first of several cryptos to gain the attention of the general public, and italready has banks and governments being forced to adapt and scramble as they attempt to control it.Incentives are everything. A system's outcome is determined by the system's incentives, not by theindividual players. If you change the players in a system, you change nothing, no matter how altruisticthe new players might be. The only possible outcome of the centrally-controlled fiat-currency systemis concentration of power and greater inequality.However, if you
F3 has an exclusive Private Member Association F3 Mastermind Group for those who want more detailed, actionable information. In this report we will first describe the epic nature of this monetary-system change. In doing so, we will use some technical terms which may not be familiar to you, yet. These technical terms are explained in the second part of this special report. It is important to .
