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The Cryptocurrency World

What is a Cryptocurrency?   In the past, currency has been issued by governments and managed by financial institutions (banks), which are in turn regulated by the financial arm of the government (e.g., in the United States, the Federal Reserve System regulates banks). In other words, money has been inseparable from nation states and banks. We have historically placed our trust in these third parties to manage our money.  Now the rise of cryptocurrency is promising to separate currency from both nation states and banks.   By definition, cryptocurrency is a digital currency that relies on cryptography (the process of writing or reading secret codes) for security rather than established third parties (e.g., governments and banks). Because cryptocurrency takes the form of code rather than currency (e.g., coins and bills), the currency is impossible to counterfeit. Most importantly, because the currency theoretically belongs to no single person, business or government, it is also immune to outside interference.   Blockchain Technology   To understand how cryptocurrency works, it is important to understand blockchain technology. Simply put, if bitcoin is the train, blockchain is the rails on which it runs. While bitcoin is actual currency, blockchain is ledger technology that speeds up network transactions. As already noted, historically we’ve trusted governments and banks to manage our money. Now these trusted third parties are essentially being replaced by blockchain technologies.   Blockchain-based currency exchanges are managed by a distributed database (one with many connected computers based in many different locations). In theory, anyone trading blockchain currencies can see every transaction that has ever taken place in the blockchain, since all data is stored in the cloud. As such, all the accounting is autonomous (run by a network of computers and not by a centralized group of people).   Types of Cryptocurrencies   Bitcoin was the first digital currency to reach the market, and it has the highest market cap at close to $39.4 billion. Bitcoin is a popular currency for consumers and merchants who want to be free of banks and traditional finance. Other cryptocurrencies have made up ground in popularity and application use by speeding up the transaction period.   Ether is the currency of the decentralized network idea known as Ethereum. Smart contracts application has raised a lot of investment dollars from Fortune 500 companies: JP Morgan, Cisco, Thomson Reuters and UBS. Their investments backs the idea that Ethereum is currently the most versatile and sophisticated form of cryptocurrency. However, its pricing and market capitalization has been quite volatile as the price has moved from under $10 to $400 and back to $200, with a current market cap of $25 billion.   A slightly different technology to bitcoin in that it does not rely on mining protocol is a cryptocurrency named Ripple, with a market capitalization of around $7.4 billion. Ripple is both a transport protocol and a currency (XRP). Its main appeal has been its lighting-fast transaction, causing Ripple to gain popularity and establish partnerships with major Chinese Banks.     Government Regulations May Not Disappear   Although demand for cryptocurrencies is rising at a rapid rate, what digital currencies really need is government regulation. The word of the government, and acceptance of a currency for taxes, gives that currency value and, more importantly, instills investor confidence.   Even more desired by cryptocurrency investors is an exchange-traded fund (ETF). This would allow institutional investors to trade in bitcoin. So far, regulators are not accepting bitcoin ETFs; the SEC has rejected two applications for bitcoin-backed exchange-traded funds, the Winklevoss Bitcoin ETF and the SolidX Bitcoin Trust. The futures market may end up being another explorable option for cryptocurrency  investments. The Commodity Futures Trading Commission considers bitcoin a commodity. What’s more, according to Coindesk, an increasing number of governments are issuing guidance on bitcoin, for example, Japan, Jersey, Malta, Sweden, and Switzerland.   With no centralized authority and the ability of buyers and sellers to operate entirely under the radar, there are legitimate fears that in the future, cryptocurrencies will increasingly be used to support criminal activities, such as tax-evasion, money-laundering, and even the financing of terrorist activities. In some jurisdiction, such as New York State, legislators have already started to crack down on cryptocurrencies. The state’s Bitlicense requires virtual currencies to comply with most of the regulations already imposed on banks and other financial operators, including payday lenders. Other government bodies, including the European Union, are also currently working to place restrictions on cryptocurrencies, which they consider a threat to both financial and personal security.
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Identity Theft Protection: What every Indiana resident should know.

Indiana residents aren’t the only ones who shudder at the thought of someone stealing their personal information—such as their name or social security number—and using this information to apply for credit, or pay for personal or medical services. Sometimes your bank may catch unusual activity and alert you, but many times people find out after it is too late and their credit status and financial situation are compromised. And it can take time to restore your good standing to appropriate levels.

 

When it comes to identity theft, USA.gov has some tips on how to prevent it and what to do if it happens:

     

  • Shield the keypad at an ATM so someone can’t see your number over your shoulder.
  • Shred your receipts, credit offers, account statements and expired cards to prevent “dumpster divers” from retrieving your information.
  • Keep personal information in a safe, secure place in your home.
  • Always have good security software installed on your home computer to protect against your information getting stolen.
  • Create passwords that a cyber thief couldn’t easily guess.

 

If you are a victim of identity (ID) theft, report it immediately. The Federal Trade Commission and your local police department are critical in filing the complaint. Once you file with both, you will have an identity theft report that you will need to help you resolve your problem with banks and creditors. It is also a good idea to report the theft to credit reporting agencies, financial institutions where you have accounts and the retailers or companies where the fraud occurred.

 

This leads us to identity theft software. This type of protection is designed to spot signs of potential theft, and if you get hacked, to repair the damage and restore your good name. Reviews.com actually tried 18 theft protection services, looking for the ones who add real value in the scope of their monitoring (regarding credit and personal info). The other big factor was whether or not these services used a power of attorney to help restore your identity for you.

 

Here are two that they found out to be the cream of the crop. For the full review, go to http://www.reviews.com/identity-theft-protection-services/.

     

  1. ID Watchdog. If your identity has already been stolen, this is an excellent service. It is the only one that will help you recover your identity from a pre-existing theft (before membership). It also offers many affordable family options for identity protection.
  2.  

  3. Identity Force. If your identity hasn’t been stolen yet, Identify Force hits all the marks on service and price. It offers services comparable to Watchdog, such as robust monitoring and a team of professional that work to get your identity back — not just offer advice. Its features are also offered in a more modern and attractive site, and offer monitoring and restoration capabilities that matched other top finalists at a cost-effective price.

 

Identity theft is something that should always be top of mind, as a hit to your credit score isn’t the only loss you face — it usually means a reduction in your wealth accumulation. Visit us at www.midwest-wealth.com for important ways to ensure you’re utilizing a sound risk management strategy.

 

About Midwest Wealth Management, Inc. Midwest Wealth Management, Inc. was formed by Greg Shields, a 30-year financial services veteran committed to offering sophisticated investors an alternative when looking for a more strategic path for long-term investing. As a private investment group, Midwest Wealth Management, Inc. offers a proprietary trading platform, alternative investment offerings and dedicated advisory support for a select audience. For more information, please visit www.midwest-wealth.com.

 

  References: USA.gov. Identify Theft. https://www.usa.gov/identity-theft The Best Identity Theft Protection Services. Reviews.com. 29, June 2016. http://www.reviews.com/identity-theft-protection-services/http://www.reviews.com/identity-theft-protection-services/Reviews.com<
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Digital Holiday Gifts May Need Estate Planning

In estate planning, we traditionally have counseled our clients on how to protect and safeguard their assets. When we say assets, most people think of hard assets, such as real estate, retirement accounts, life insurance, investments, bank accounts, jewelry, collectibles, etc. With the cloud and internet playing a big role in our everyday lives, there is another form of asset that you need to consider when planning.   I had the opportunity to sit down with Steve Robinson, a founding partner at Robinson Wolenty & Yong, LLP to discuss some major changes and best practices for estate planning in a digital age. A practicing lawyer for 35 years, Steve concentrates his practice in estate planning, probate, business planning and real estate matters.   What are digital assets?   They are best understood in three different categories: social media, entertainment and financial accounts.   Social Media: Emails, Text, Twitter, Facebook, Snapchat, Instagram, etc. Entertainment: Amazon, Ebay, Netflix, Hulu, iTunes, Pandora, Spotify. Financial: Credit cards, mortgage/rent payments, car, utilities, cable.   Why are they important?   These different digital assets are all accessed through online accounts. In order to access your accounts you have to use a unique username and password combination, “soft assets.” I am not saying anything that’s ground breaking or new but I hope you can see where this is heading.   Let’s paint a scenario- You do not receive paper statements from your investment account, everything is sent electronically to your computer which is password protected. You pass away and no one knows about this account nor the password. How does your family find out about the hard asset? They could hire a forensic computer specialist to determine the password, but this can be expensive and time-consuming.   Some of us maintain a record of our password(s), but how many of us actually share where it could be located by someone you trust? In addition, most social media companies will not allow access to customer files without knowledge of the password, which means obtaining a court order to access the account. Many people have family pictures and personal information on these outlets that would cause unnecessary hardships on their family if they couldn’t be easily accessed.   How do you plan for Soft Assets?   We currently use a digital asset estate information form that assists our clients in categorizing and maintaining their soft asset information. This is basically a soft asset inventory, which would include usernames, security questions and passwords. It helps sort one’s email accounts, domain names, banking, investments, tax information, insurance, credit cards, social and digital media accounts. There are several software programs you can purchase to manage your passwords such as:   • Robo-Form • Last Pass • 1Password   However, you still need a password to access your phone and the password manager. All of your estate planning documents should be located in one place, a fireproof safe or lock box work well. These documents should include updated wills, trusts, powers of attorney, and medical powers of attorney. The person responsible for handling your estate administration should know where this information is stored.   Midwest Wealth Management, Inc. does not provide legal/tax/estate planning advice. You should consult a legal or tax professional regarding your individual situation.
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Have you planned for your Digital Assets?

In estate planning we traditionally have counseled our clients on how to protect and safeguard their assets. When we say assets, most people think of hard assets, such as real estate, retirement accounts, life insurance, investments, bank accounts, jewelry, collectibles, etc. With the cloud and internet playing a big role in our everyday lives, there is another form of asset that you need to consider when planning.   I had the opportunity to sit down with Steve Robinson, a founding partner at Robinson Wolenty & Yong, LLP to discuss some major changes and best practices for estate planning in a digital age. A practicing lawyer for 35 years, Steve concentrates his practice in estate planning, probate, business planning and real estate matters.   What are digital assets?   They are best understood in three different categories: social media, entertainment and financial accounts.   Social Media: Emails, Text, Twitter, Facebook, Snapchat, Instagram, etc. Entertainment: Amazon, Ebay, Netflix, Hulu, iTunes, Pandora, Spotify. Financial: Credit cards, mortgage/rent payments, car, utilities, cable.   Why are they important?   These different digital assets are all accessed through online accounts. In order to access your accounts you have to use a unique username and password combination, “soft assets.” I am not saying anything that’s ground breaking or new but I hope you can see where this is heading.   Let’s paint a scenario- You do not receive paper statements from your investment account, everything is sent electronically to your computer which is password protected. You pass away and no one knows about this account nor the password. How does your family find out about the hard asset? They could hire a forensic computer specialist to determine the password, but this can be expensive and time consuming.   Some of us maintain a record of our password(s), but how many of us actually share where it could be located by someone you trust? In addition, most social media companies will not allow access to customer files without knowledge of the password, which means obtaining a court order to access the account. Many people have family pictures and personal information on these outlets that would cause unnecessary hardships on their family if they couldn’t be easily accessed.   How do you plan for Soft Assets?   We currently use a digital asset estate information form that assists our clients in categorizing and maintaining their soft asset information. This is basically a soft asset inventory, which would include usernames, security questions and passwords. It helps sort one’s email accounts, domain names, banking, investments, tax information, insurance, credit cards, social and digital media accounts. There are several software programs you can purchase to manage your passwords such as:   • Robo-Form • Last Pass • 1Password   However, you still need a password to access your phone and the password manager. All of your estate planning documents should be located in one place, a fireproof safe or lock box work well. These documents should include updated wills, trusts, powers of attorney, and medical powers of attorney. The person responsible for handling your estate administration should know where this information is stored.   Midwest Wealth Management, Inc. does not provide legal/tax/estate planning advice. You should consult a legal or tax professional regarding your individual situation.
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