The waters of the crypto seas are cold and unforgiving, with many predators just waiting for an opening that would allow them to feast on your virtual assets. Failure could be catastrophic, skills, tools, and balance are required to survive.
Wealth stored in tangible, yet non-physical, format enables personal sovereignty over that wealth. Due to the new reality that greater strength does not overcome greater intelligence. Operating a Bitcoin business requires the business owner to work smarter, not harder.
At least, not since Bitcoin has begun providing monetary choice to those willing to assume personal responsibility for their asset's custody, clearance, compliance, and security. Doing so requires the proper tools to do so. As well as knowledge of each one works and the function it fulfills. Understanding how the pieces of the puzzle fit together to create a private Bitcoin banking arrangement will for many be their greatest challenge.
The highest level of play in the cryptocurrency "money game" is that of an owner of a business operating on a Bitcoin standard. To help foster understanding of how pieces of this jigsaw puzzle fit together I'll describe a snapshot of one possible arrangement. Created to help aspiring Bitcoin bankers see a bigger picture enabling them to craft personalized solutions for themselves. I expect that many of the creators of these pieces of the puzzle have themselves yet to see the possible use-case-scenarios of their own offerings.
How to strategically use current Bitcoin banking tools
Imagine if you will, that you've a successful online business and you've begun using BTCPay server as a self-hosted payment processor that eliminates all 3rd party fees. Your wallets are filling up with BTC, and it's time to diversify the holdings into multiple "vaults".
It's now Friday, payday for your employees, and allowance day for your kids. You've issued your family tools for managing their Bitcoin in three different forms, designed for short, medium, and long term holding;
--an Opendime USB "bearer stick" as a form of 5-yr crypto-bond, not to be touched until 2025.
--a ColdCard wallet air-gapped SD card reader mimicking the appearance of a simple calculator as a form of savings account, to only be used for large purchases and to receive overflows from the "crypto checking" account.
--and a Tangem reloadable "crypto smart-note" NFC card for managing daily expenses, whether personal, business, or travel expenses.
From a Samourai wallet on a Librem 5 privacy-phone weekly send some BTC to the kids', wife's, and employees' Tangem cards. Also, issue these Tandem smart-notes to your employees as a means of managing payroll and to your family for their "petty cash allowances". These crypto smart notes are useful for business travel to allocate funds towards transportation, food, and lodging expenses and create a fully transparent record for accounting purposes. Another application of the Tandem cards is to issue them to the business managers for funding weekly operational expenses for the business, as well as to the employees for dispensing their weekly salaries.
Bitcoin Business Operations
Management of Bitcoin business operations requires knowing how to keep the hotwallets functioning securely in order to enable earning spread fees by Selling BTC over-the-counter for a premium above Spot prices. The Samourai wallet on the point-of-sale tablet that's been integrated with BTCPay server will need topping off when the 5% commission has been earned by providing customers with BTC as "crypto cash back" over and above their purchases. When Buying BTC from the customers at a discount below Spot prices the BTC received flows directly into the dedicated banking tablet's Electrum wallet.
Overflows can be sent to the Ledger Nano connected to the US Binance, Kraken, Coinbase, or Gemini exchange accounts that have been connected with the business bank account. The majority of BTC accepted for sales of goods, services, and OTC trades can IF, as quickly as possible, is best moved back into USD in the bank accounts to avoid the risk of short-term volatility eliminating profit margins. When waiting for BTC needed for short-term operational expenses to be turned back into fiat, a 50X leveraged Long position on Kraken is acquired by business Management as soon as BTC earmarked as long-term positions are sold for a premium. Protecting against a sudden increase in USD valuation. A short position taken out to defends against sudden drops in USD pricing protects the value of Spot holdings.
After personnel have been compensated, the profits from the week's business operations can be loaded onto the Ellipal wallet acting as the business savings account. This allows for the accumulation of funds in a perpetually air-gapped hardware wallet that is accessed when making large capital investments to grow the business endeavor. The business Owner can send weekly payments to his personal ColdCard, Digital Bitbox, or Trezor depending on which account needs refilling. Using the ColdCard for personal savings and the Digital Bitbox for funding international travels. And the Trezor that's integrated with Binance (in order to enable speculative trading on Alt-coins or for transaction history cleaning by trading them for privacy coins like Monero, Zcash, and/or Dash).
Bitcoin Business structuring
As a Bitcoin business has been operating for a while generating profits along the way, there's hopefully been an accumulation of capital now needing long term storage, tax minimization, and estate planning. To acquire some regulatory clarity and to diversify jurisdictional authority a Wyoming LLC likely will have been established for retail banking purposes, a Nevada Prime Trust account for investment purposes, and a Puerto Rico Corporation for mitigating tax consequences. Each entity also has its own self-custodial and outsourced custodial solution, using each option as appropriate for the source and ultimate destination of the funds.
Profits from retail operations are sent from the LLC's bank accounts and its retail crypto wallets into the investment accounts of the Trust (preferably from a Samourai wallet that has used coinjoin transactions to wash the transaction history clean) . Which has opened exchange accounts for trading in addition to the Ellipal for savings. Profits beyond that needed savings and capital investments, that have been earmarked for long-term holding or major capital investments are sent the bank account for the the PR Corp. In addition to its Cobo cold wallet providing military grade security kept in the business safe, or safety deposit box, in Puerto Rico. These are then paid out as dividends to the corporate shareholders, which may be the business owner, partners, or other international entities operating offshore.
Hedging your bets
Once the business owner has met payroll obligations and funded the Queen's, offspring's, and business' vaults, then his own treasury can be topped off. A natural desire arises to begin speculative trading to take on more risk in return for the potential for greater gains, hedging to limit risk as a means of protecting capital purchasing power, and funding of liquidity solutions to enable daily spending. Segregating assets into multiple liquidity solutions that store the capital until its spent through a debit card. Options exist to fund reload these prepaid debit cards with BTC and have the balance denominated in BTC through Paycent, in USD through Bitpay, in Gold through Goldmoney, and in Silver through Perpetual Assets.
As capital accumulates into larger amounts, store some of it internationally as both Gold and Silver through SilverBullion in Singapore. Enabling liquidity if/when needed through their P2P lending platform. Some of the excess BTC capital (if one believes there can be such a thing), can be liquidated through OTC desks. Then deposited into a Singapore bank for use to earn interest by lending it out through the P2P marketplace with those loans collateralized with twice the USD value in precious metals.
This BTC that has been liquidated for this purpose is protected from FOMO, fear-of-missing-out on long term gains by holding a matching futures position with high leverage on an exchange like Bitmex. When capital is needed for major purchases such as real estate, rather than taking out a fiat loan or over-collateralizing a BTC-backed loan through BlockFi, deposit it as precious metal that collateralizes the self-loan from the cash acquired in the OTC liquidation that's been deposited into the Singapore bank.
These advanced Bitcoin business operational tactics provide fiat liquidity. Liquidity which is currently needed, but not at the cost of keeping a position on the fast-moving Bitcoin train or of a hedging position to manage the inflationary risks of Fiat by storing some capital in precious metals. The interest charged to oneself, or one's family, in the P2P loan can be captured for use to increase the family's estate. Doing so enables a totally sovereign banking arrangement that's been diversified, and hedged without compromising liquidity or missing out on long term capital gains.
Confidently operating a Bitcoin business requires first, an investment in education, then in the proper hardware, and of attention to steering these many moving parts. Monetary sovereignty doesn't come cheap, it costs time, mental bandwidth, and money. Sailing the crypto seas as a self-sovereign merchant mariner is not for the fearful, lazy, or dependent. This realm is only accessible to the brave, industrious, and independent business operators. But that's also why the potential for creation of multigenerational wealth exists right now. These potential rewards will be gone once it is easy and everyone is doing it.
"You cannot discover new oceans, if you are not willing to lose sight of shore"... Operating a Bitcoin business requires bravery enough to take the risk of leaving known safe harbors in order to discover new possibilities for monetary sovereignty.