Intro to Crypto

1 FOR GOD HAS NOT GIVEN US THE SPIRIT OF FEAR BUT OF POWER, AND OF LOVE, AND OF A SOUND MIND. IN Wisdom for Living WellSound Mind Investing 18 Editorial / Resisting Financial Temptations22 Level 1 / The Basics of Insuring Your Home23 Level 2 / How to Calculate Your Portfolio s Rate of Return24 Level 3 / 2021 Recap: Markets Surge to All-Time Highs Level 4 / How Well Do Target-Date Funds Perform in a Downturn?26 Basic Strategies 27 Upgrading: Easy as 1-2-331 Fund Upgrading Update 31 Premium Strategies 32 Performance DataFEBRUARY2022 VOLUME 33 NUMBER 2(continued on page 19)The investment world is buzzing with increasing volume about Bitcoin and all things crytpo. By now, many investors have heard the terms and seen amazing and sometimes alarming reports about cryptocurrency investing. (And a lot of us have seen an abundance of Crypto commercials featuring the likes of Tom Brady and Matt Damon!) Still, few investors understand the cryptocurrency sphere or know how to approach investing in such products.

2 In this overview, we explain Crypto s key concepts and offer a few thoughts regarding these still quite new technologies. by Mark BillerIntro to CryptoTell me if you ve heard this one before: An unique new technology is created. Over the next decade or so, it develops and grows among a small group of passionate enthusiasts. Outsiders start to hear about it but don t really understand much, partly because it s so technical but also because it s tough to imagine how this new tech is relevant to their lives. Eventually, however, the balance tips, and all of a sudden (seemingly), everyone is using general outline describes any number of techno-logical breakthroughs. Personal computers in the 1980s, the Internet in the 1990s, mobile computing since then. These are relatively recent examples. History is filled with other technological innovations that have followed this same pat-tern: the telephone, radio, television, nuclear power (Einstein himself said it was impossible!), and so brings us to cryptocurrencies Bitcoin and the like.

3 You ve almost certainly heard of them. You probably even know someone who is into them. But we re still early enough in the adoption curve that most people don t under-stand them or know what the fuss is course, a key question for investors is whether this new tech frontier one that is attracting massive amounts of investment capital and many of the best and brightest minds in computer science is a transformational new technology or not. And, as investors, we d like to know if it s possible yet to start picking winners and losers in this help us arrive at some answers, we need first to get the lay of the land. This article attempts to explain as simply as pos-sible the fundamental concepts of this expanding technology. This will only be a surface-level exploration. Entire articles and books could be (and have been) written on each topic we ll ex-plore. For our purposes, a functional understanding of the main ideas will do. We ll discuss the promise seen by the optimists, the concerns raised by the pessimists, and ultimately offer our per-spective regarding the investment implications as we see it the article uses Crypto as shorthand to refer to the entire cryptocurrency space.

4 The ultimate promise of Crypto is tied to creating a new, digital financial 18 FEBRUARY 2022 EDITORIALNECESSARY CAUTIONSIt should not be assumed that all invest-ment recommendations will necessarily be profitable. The information published in SMI is compiled from sources believed to be correct, but no warranty as to ac-curacy is made. SMI is not responsible for any errors or omissions. The counsel giv-en herein is not a substitute for person-alized legal or financial planning USCorrespondence can be emailed to SMI Our toll-free Reader Services line (877-736-3764) is available for handling clerical matters such as subscriptions, billings, newslet-ters not received, and changes of ad-dress. Please be advised, however, that the SMI staff is not trained in matters of personal counseling and it is our policy that they not attempt to do so over the phone. If our staff is busy when you call, you may leave your information on our secure answering part of this newsletter may be repro-duced in any fashion without the prior written consent of SMI.

5 February 2022 by SMI, LLC. All rights are Mind Investing is published monthly by Sound Mind Investing, 9700 Park Plaza Ave Ste 202, Louisville, KY 40241-2287. Periodicals postage paid at Louisville, Kentucky USPS (006344). POSTMASTER: Address changes to: SMI, 9700 Park Plaza Ave, Unit 202, Louisville, KY 40241-2287. This is Issue 380 Volume 33 Number 2. Mailing date: 2/04 Financial TemptationsI want to share with you something I read more than 20 years ago. In context, it was intended to explain how we can have greater success in resisting sin. But I want to make a parallel application in the area of our stewardship how we can more closely follow God s principles for spending, sav-ing, investing, and giving the money He has entrusted to be successful in these areas, there s more involved than simply learning the rules of money management. To paraphrase renowned investor Warren Buffett, if it was simply a matter of gaining enough knowledge, all librarians would be rich!

6 To manage money well, we must also demonstrate the crucial element of self-control. Not just coming up with a budget that will get you debt-free and help you save for future needs, but living it out week by week. Not only devis-ing an investing strategy, but sticking with it no matter what the markets are doing or the pundits are saying. Not just having good intentions about raising your giving from 10% to 15%, but making the sacrifices so it will actually course, it would be easy to accomplish our goals if it weren t for all those appealing opportunities to deviate from our plans. We re so prone to make an exception just this time. Or, as 19th-century novelist and playwright oscar wilde humorously put it, I can resist anything except temptation. It s in this very area that author Sam Storms advice lifted my spirit. In Pleasures Evermore: The Life-Changing Power of Enjoying God, he put it this way: We yearn for pleasure. We were built for excitement. Our passion for joy and satisfaction is relentless and inescapable.

7 Although this passion for pleasure is not in itself sinful, it is the reason why we sin. We say Yes to temptation because it feels Volitional restraint and abstinence are only effective against sin when the soul embraces a pleasure superior to the one denied. Finding fullness of joy and everlasting pleasure in God s presence alone will serve to woo our wayward hearts from the power of the world, the flesh, and the Devil. There-fore, falling in love with the Son of God is the key to holiness. I want to be attuned to God s heart, to be of one mind, one spirit, one disposition with Him. If this occurs, it will only occur as the fruit of fascination with all that God is in Himself and all that He is for me in Jesus. The inability to walk with consistency in the things you know please God ultimately will only be overcome when your heart, soul, mind, spirit, and will are captivated by the majesty, mercy, splendor, beauty, and magnificence of who God is and what He has and will do for you in Jesus.

8 I must confess that I have ransacked the dictionary for words to describe what I have in mind. Here is what I mean by falling in love with Jesus. I, you, we were made to be enchanted, enamored, and engrossed with God; enthralled, enrap-tured, and entranced with God; enravished, excited, and enticed by God, astonished, amazed, and awed by God; astounded, ab-sorbed, and agog with God; beguiled and bedazzled; startled and staggered; smitten and stunned; stupefied and spellbound; charmed and consumed; thrilled and thunderstruck; obsessed and preoccu-pied; intrigued and impassioned; overwhelmed and overwrought; gripped and rapt; enthused and electrified; tantalized, mesmerized, and monopolized; fascinated, captivated, and exhilarated by God; intoxicated and infatuated with God! Does that sound like your life? Do you want it to? Do you realize how difficult it would be to sin if this were true of you? This is what God made you for. There is an eradicable, inescapable impulse in your spirit to experience the fullness of God in precisely this way and God put it there!

9 Storms is echoing the view author and pastor John Piper put forth in his classic Desiring God that the longing to be happy is a universal human experience, and it is good, not sinful. We should seek to intensify this longing and nourish it with what-ever will provide the deepest and most enduring satisfaction. And the deepest and most enduring happiness is found, not in material comforts or financial success, but only in is as the old hymn taught us as children: Turn your eyes upon Jesus, look full in His wonder-ful face, and the things of earth will grow strangely dim, in the light of His glory and grace. AUSTIN FEBRUARY 2022 19 FEATUREARTICLEI ntro to Crypto (continued from front page)system a new kind of money if you will. (The topic is broader than that because, rather than being limited to specific financial goals, Crypto innovations involve a new approach to computing. But let s start with money, something we re all familiar with.)While people have thought about the concept of decen-tralized money for a long time, the Crypto movement began with a whitepaper issued in 2008.

10 An anonymous person (or perhaps a group) known as Satoshi Nakamoto outlined a new digital currency called Bitcoin. This vision of a peer-to-peer currency outside the control of any government was brilliant in its design and elegant in its simplicity (the entire paper is only nine pages long). Since then, cryptocurrency has captured the imagination of millions of Bitcoin idea checked all of the boxes of functional money: durability, portability, fungibility, scarcity, divisibili-ty, and recognizability. And in direct contrast to the inflation-ary monetary policies that gave rise to Crypto (such as we re experiencing in the at present), Bitcoin was designed to be sound money. Unlike traditional currencies, which governments have devalued by printing money without limit, Bitcoin is bound by the number of units that can be created. It has a fixed cap of 21 million Bitcoins that can ever be produced. (These are not ac-tual coins but computer entries, as explained below.) Bitcoin s fixed supply provides the sound-money appeal that has long underpinned the case for gold.