According to IRS rules, you are allowed to use your retirement funds to invest in cryptocurrencies. This can be done with any self-directed retirement plan from the IRA Financial Group, including the Self-Directed IRA, Self-Directed Roth IRA and Solo 401(k) Plans. In this series of posts entitled “Using Retirement Funds to Purchase Cryptocurrencies” we’re examining the different facets of cryptocurrency investing. This post will deal with what is known as the “blockchain”. In brief, the blockchain is a detailed list of cryptocurrency transactions that have been verified by miners using powerful computers.
In his latest book, entitled How to Use Retirement Funds to Purchase Cryptocurrencies in a Nutshell, Adam Bergman discusses in further detail what a blockchain is, in regards to cryptocurrencies.
“After computers on the network confirm that a transaction is authentic, the transaction is posted to a ‘block’—a grouping of confirmed transactions. Miners then compete against each other to find a solution to a mathematical puzzle that depends on the contents of the block. Once a solution is found, that block will be added to the blockchain. When a new block is added to the blockchain, new virtual currency coins are generated and awarded to the miner who discovered the solution to the mathematical puzzle that allows the new block to be added to the blockchain. The cycle then repeats. All transactions in a virtual currency blockchain can be viewed by the public on any computer connected to the Internet. However, the blockchain transactional history only reveals the date, the time, the amount (denominated in virtual currency), and the wallet addresses associated with a transaction. The blockchain does not identify the wallet owners (the private key). There are nearly a thousand virtual currencies, but the most widely known virtual currency and the largest by capitalization is Bitcoin. Other virtual currencies that mimic Bitcoin by using the blockchain technology are known as alternative coins or altcoins, for short. Just a few examples of altcoins are Ethereum, Litecoin, Ripple, Feathercoin, Tron, and Dogecoin,” Doug said.