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E-Gold Founder Launches New Gold Backed Currency
Submitted by Mike Krieger of Liberty Blitzkrieg blog,
It was only a matter of time before the success of Bitcoin led to a new attempt to create a digital currency backed by gold. It seems as if that day has now arrived.
Douglas Jackson is the founder of e-gold, which was shut down by U.S. authorities a little over five years ago under accusations of money laundering. While I fully think the ultimate monetary solution will be a decentralized payment protocol that merges Bitcoin-like technology with the ability to back it with gold, silver or whatever people want, I am of the view that it cannot be done from an overly centralized authority or protocol. There are several reasons for this.
First, when you have a centralized single issuer of a currency who also is responsible for vaulting the gold within the payment system you have an enormous degree of counter-party risk. The vault itself could be seized by “authorities” in whatever jurisdiction it is located in.
Second, the human beings or company behind any currency system can themselves be pressured or threatened in order to comply with more powerful interests. The beauty of Bitcoin is that there is no “Bitcoin corporation.” It truly is decentralized and anarchic in nature. It basically puts “the powers that be” in a position that if they want to completey destroy it, they’d have to destroy the internet itself.
That said, I do believe the evolution of money is headed to a Bitcoin type system with the ability to have whatever backing is desired by the market. So at this point my questions to Mr. Jackson would be:
1) How decentralized is this currency system intended to be if at all?
2) Will there be an open source protocol available to all?
3) Are the units of currency distributed to those that own gold in a particular vault or vaults under a the custodianship of a particular company?
4) Is the currency limited to those who own gold in the currency issuer vaults, or will they be linking vaults all over the world if such vaults care to be linked.
While I love the idea, it would have to be done right or it will be doomed to fail. I’m very curious to learn more about this and I’d also love to hear reader feedback on this.
From the Financial Times:
The founder of one of the earliest virtual currencies has re-emerged with a rival to Bitcoin, more than five years after his first venture, e-gold, was shut down by the US Department of Justice
Douglas Jackson is consulting for a membership organisation called Coeptis that hopes to launch a new version of his gold-backed currency, which attracted millions of users at its height.
Coeptis’s “global standard currency” would be fully backed by reserves of gold, held in a trust, in effect turning the precious metal into a medium of exchange.
Full article here.
***
Update from Mike Krieger: *Since the publication of this article, I have been contracted by Douglas Jackson and he has informed me that he is not personally launching anything and that he is merely a consultant on this new project. I hope to have more details on all of this in the near future.
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Not at all, although I am only allocating 2% of my capital into bitcoin as a speculative investment. If it blows up, meh, I knew the risk going in. So far I'm up 120%, so no compaints here.
i just got my check from the e-gold distribution , after the feds took control, wasnt too bad , they converted my e-palladium at 600$ but maN THe wait has been most frustrating, when i got e-gold old timers said " if you dont hold it you dont own it. " how young and naieve i was
I lost money on that too. Another sharp ZH comment earlier asked if it REALLY was the FED that took the gold, or the owners.
Hocoodanode?
This could be a game changer. As soon as a bitcoin like gold backed currency does launch, I think gold breaks manipulation as the value of this new currency may actually eventually control the price of gold, not the other way around. Do they plan to add more units over time, buying more gold off the market? This could change things, I know people might laugh...but look at bitcoin...you get that buying power into gold, watchout!
so now all of a sudden the stackers trust the gold vaults?? you guys are really grasping
it's a given, but not said for awhile,
1.) most of the kids here are living in their granny's
basement and not have 'coin' of any kind
2.) paper or a 'promise' is like 'I will not cum in your mouth' for all time
3.) paper money, paper gold, bit-coin NSA registration, is still BULLSHIT
4.) one in the hand, is worth 100000X in the bush
I think the gold-bugs are largely pimps getting morons to buy overpriced gold 'collectible' coin's, but that game is lon over,
Again, ... in all human history 99% of all great fortunes were were made in real estate, of course making your nest-egg must be done with 'specialized knowledge', so good for the kids that generated the first gen crypto-curr, but know to get out early and buy lots of cheap land that has water in the future and in 15+ years you'll be king of the mountain,
Jack Lew will shut this down tomorrow or by next week. God forbid, we can't have tangible assets like gold floating around in the fiat kingdom.
How many fucking times and ways do ppl like you need to be told that whatever the US Gov does or attempts to do, will ONLY affect its own 'Subjects'. The rest of the world will keep spinning, to the amazement of 95% of 'mericans.
Bingo, the Fed does not run the world, although that is the plan. Also why more and more Americans are giving up their citizenship. Who needs the US shining a light up your ass every time you try to do an international business deal.
It can work if you can exchange the currency for gold at any time.
i coukld have claimed e-gold, just needed 400 oz bar worth :(
Ok, let me ask- regarding this brand new crypto currency. If you make profits, do you report it to the IRS?
If not, what happens?
Oh yeah, that's right. They THROW YOU IN JAIL. Right after they take your shit and BEAT YOUR ASS.
Oops! Back to the drawing board.
so giving 30% or whatever of hundreds of thousands of profits leaves you with what?
What do you think the IRS takes 140% or something?
What are you, kidding me?
Are you a kid or something?
are you broke or something? you keep most of you money when you pay taxes... or are you channelling your inner Pinkman?
"you keep most of you money when you pay taxes"
What the hell have you been smoking?
Taxes, what are taxes.. I havn;t done any of that since the late70's.
I thought was all medieval stuff now, seeing as it is the easiest thing in the world to decamp your business off shore and then get completely off the govt radar. and the internet made that a whole lot easier since the 90's
My wife made $4,678 dollers this month buying and selling bitcoings without leaving the house. learnt how she did it. go to torrent.f4k68l.xoukn3
"Bitcoings"?! I'm sure that's a typo, but with all the new crypto-currencies spawning faster than a Kardashian photo op, who knows.
At least he spelled dollers right...I learnt something knew today.
Allow me just to point out that you can trade Mickey mantle cards for bubblegum all day long. But at the end you need to do GAAP accounting in USD, calculate a tax liability, and pay it in, you guessed it, USD.
That's right, the USD - the original crypto currency. Crypto because you have NO IDEA who is behind it.
Whee! Isn't slavery great?
scared of your own shadow much? do the kids come by at all anymore?
I'd rather have a farmer trade me a year's worth of food for building his barn, or fixing his tractor. Give me a tool box and I can fix about anything.
If the dollar collapses the most valuable skills will be knowing how to shoot, finding sources of clean water like artesian springs, woodworking, and mechanical engineering.
If you've got ten thousand Bitcoin, it won't do much good if you have no valuable skills to offer anyone.
I wonder what happens to the tribe when they can't buy their way out of a situation. Perhaps that's what QE is all about. The financial collapse showed them a future where they weren't in charge, scaring them shitless.
here we go, ol yeller here speakin of the days of yore but typing bits on an internet blog.... what is wrong with this picture?
you can leave the grid now, before they shut it down...
If I had 10,000 btc, I'd buy your farm and 5 years worth of prepped stuff out of chump-change.
And have another one like it far from the US. And still have plenty left over.
Newsflash: so would most other ppl. If they actually had all those BTC.
If I had your 10,000 BTC's I would buy a battle ship and
nuke your country,...
That's the whole deal with virtual shit, any and all can
pull anything out of their ass.
You can pull a battleship out of your ass? Man, that's gotta sting...
adr, just adjusting your slight oversight. I would assert that farming would fit into the list of "most valuable skills."
After all, it was you who suggested trading building a bar or fixing a tractor in exchange for food. Suppose said farmer already has a barn and his tractor works well. You will still need FOOD, and he's the guy who has it.
adr. i used to think the same thing, until i realized that all the nuclear reactors in the world will melt down if they are manned. in a real collapse, we are all doomed unless someone can tell me how we escape this scenario.
Sigh. I'm gonna have to actually look into Bitcoin and figure out wtf everyone is talking about, I thought it was just a gag on "The Good Wife", but people here seem to take it sort of seriously, how about that. So then, why shouldn't Bitcoin if there is a Bitcoin just hold onto some gold and/or futures, and there you go. Easier than someone else cloning Bitcoin and then adding it to gold. I think it would be a Good Thing if one or another or several of these eventually catch on. I mean, how different are they really from Visa or American Express? How about I make a deal with you to buy your credit card debt at a discount of 2%, we send AmEx a tweet about it, and you buy me lunch? We can all be femto-counterparties to publicly held assets. Cash, even gold - obsolete.
you got a lot of reading to do
Is it even worth it ? I presume he writes code for a living ? every other programmer in the world knew about it 4 years ago.
> you got a lot of reading to do
I don't doubt it, why do you think I've avoided it until now?
So, just having a working key constitutes a bitcoin? And they are subject to theft of wallets, much less disk failure? And their current location is NOT kept by any central authority? Something like that?
Not having yet done the reading, I've been put off by the moderately well-founded intuition that no such scheme could be very secure against several different kinds of fraud and attack, up to and including some agencies with big computers and smart cryptographers who can see through the whole thing.
wolves love sheep
Ven coin already is backed by commodity / carbon credit (not my favorite either) and has been around before bitcoin
Silly people... all you need to do is open a Gold <-> BitCoin exchange in as many friendly jurisdictions as possible. Then you can use BitCoins to transport your "currency" and take out your "money" at the nearest convenient exchange.
No need for new code, no need for any trusted central gold vault.
You've already got the wheel and the spoke invented, just put them together.
Aye, trying to mash them together in 1 system seems to amplify the bad qualities of both.
Moving from the mathmatical realm of bitcoin to the physical realm of gold introduces more costs and counter-party risk (targets to attack/corrupt).
Yes, but its the physical realm that gives gold 3,000 years of credibility that bitcoin will never have.
Not sure I buy the premise of your argument. Bitcoins are an Internet-based crypto currency. The Internet has been around for only 20 years. So you can't hold their lack of longevity against them.
Gold and silver are wonderful currencies for the physical realm, but the physical realm presents real limitations and problems, namely: how does one transact across distances? How does one transact across time? We have become dependent on electronic fiat dollars and the SWIFT system to solve these problems; but as we all know, these "solutions" have presented tremendous new problems. The currency is now subject to a corrupt and tyrannical central authority, and the result is debasement on a monumental scale, combined with a complete lack of privacy
Crypto currencies solve all these problems: neither time nor distance is a barrier, there is no meaningful risk of debasement, and transactions are pseudonymous (and with some effort, can be made fully anonymous).
Gold, silver, and crypto currencies can all happily coexist: one for the real world, and one for the virtual world.
The 'internet' (TCP-IP) has been around since the 1960's (DARPA),
WWW has been around since 1992 world-wide-web.
The 'WWW' just made TCP-IP 'idiot-proof' as we were all using TCP-IP since the 1960's without graphics.
The NSA did design 'bitcoin', and the BTC uses the 'SHA'
encryption std which they wrote, and there never in all NSA
history as their been a 'standard' without a back-door.
Meaning that only does the NSA own bitcoin, but that like c Caesar he can take that which is his, any time he wishes.
Another MYTH that bores the shit out of me, is that BTC is made of "MATH", no its NOT, its a SOFTWARE HACK, .
Knights Templar tried that. Jacques De Molay might disagree.
Most M&A turn out to be a disaster. But a merge of these 2 makes sense to me.....
I wonder if price discovery would work the same way as it has with dollars to BTC.
Would the Gold Price be able to separate from the $$ Price and find its own BTC price? With so many established exchanges trading gold at faux $$ prices, how would the arbitrage of that work?
I doubt that things would settle down quickly... but I'd be inclined to give more credence to the BTC/Gold ratio than either the Dollar, the Pound or the Euro.
If all you had to do to redeem your physical bit gold is drive to your bank, it would be decentralized.
What would be the aggregate costs to banks? Sophisticated weights and scales, counterfeit gold detection, man-hours, physical storage and security, etc? Transportation system to keep each bank stocked but not over-stocked... The mind boggles.
Banks might keep an amount of gold on hand based maybe on avg yearly or monthly volumes and then square up balances every so many months with other banks thru clearing houses holding physical.
For customer physical demand tech can instantly determine what a substance is made of using resonance.
For storage: a locked vault, electronic security, guards - basically what banks have now.
The overhead costs of a system that sharply reduces govt monetary abuse and bubbles is negligible.
You are way over thinking this.
CFR has been pushing digital gold since 2007. Maybe BitCoin was always about paving the way for a global electronic (i.e. cashless) currency.
http://www.cfr.org/business-and-foreign-policy/digital-gold-flawed-globa...
There is no doubt the One Worlders have been dreaming about an electronic, cashless, global currency. However, I'm quite confident their preferred version depends on a hierarchical network of banks, with a global central bank monitoring and controlling everything.
BitCoin does not in any way fit this model. SDRs are more to their way of thinking, and Bitcoins sure as shit ain't SDRs.
Not only that, but they won't release it until the well connected get their slice of the pie first, ensuring their wealth stays in their hands and not redistributed to a bunch of anarchic hackers who like playing with computers.
For those of us who actually use facts to make decisions, keep a couple of things in mind:
1. Digital cryptographic currencies were invented by NSA, in a series of papers in the mid 1990s. In fact, there is very good reason to believe people from the NSA, if not the NSA itself, invented bitcoin.
2. Bitcoin represents a cryptographically assured way to track financial transactions, since every transaction is recorded permanently in a distributed database. For those with the appropriate computational resources, it is a simple matter to correlate every Bitcoin transaction to currency transactions from any financial institution, and to maintain a temporal mapping of IP addresses to transactees. In other words, for the obtuse, Bitcoin was designed to be a perfect mechanism for tracking all financial transactions. This is especially ironic for any fools who thought that Bitcoin would provide them anonymity. LOL
This does not mean that Bitcoin is fatally flawed. As the NSA designed Bitcoin, so the DOD designed the Internet. Bitcoin can still be a valuable service. But for anonymous transactions -- not so much unless you are also shielded by unicorns.
+17 trillion................thats beautiful..........
Al Gore invented the internet, silly.
Your explanation makes a lot of sense... I keep telling people that BitCoin isn't anonymous because the block chain is public and immutable.
But the press always takes about anonymity in stories about BitCoin... it's like the USA wants people to think it's more anonymous that it is.
"But the press always takes about anonymity in stories about BitCoin... it's like the USA wants people to think it's more anonymous that it is."
Apparently you haven't looked into mixing services or CoinJoin.
I am aware of coin-mixing services (BitCoin laundering), but that's an extra step requiring you to trust the service. Given that the NSA has spoofed a variety of other net services, it's not out of the question that one or more coin laundries are actually run by the NSA.
That's why I say "more anonymous". Just using BitCoin by itself isn't all that anonymous. But it does enable other services to trade off trust for privacy.
I'm merely puzzled when the press plays up the anonymity without pointing out that you have to take extra steps.
CoinJoin doesn't require trust.
"Digital cryptographic currencies were invented by NSA, in a series of papers in the mid 1990s"
No, they weren't. E-cash systems have been in development by Anarcho-capitalist computer programmers prior to any government interest in them. And Bitcoin is the first successful implementation that solves the "double spend problem" in a decentralized way.
"Bitcoin represents a cryptographically assured way to track financial transactions"
No, it doesn't. Google "CoinJoin".
No one admits to knowing (or being) Satoshi Nakamoto... why couldn't (s)he be from the NSA?
Sure, that's possible. It's also possible Satoshi is Adolf Hitler, who survived and started programming computers in his old age while hiding out in South America. It doesn't matter. All the code is open source and free for anyone to critique.
What authoritative source ever said Bitcoin was anonymous? Or did you just make that up to attack it? Bitcoin is psuedo-anonymous. The randomly generated addresses are stored publicly in the blockchain. It could have been designed differently but there is a reason for this. Using the addresses in the blockchain I can detect counterfeit Bitcoins without the need for any other person or equipment. How much meta-data an indivudual leaks to those randomly generated addresses is up to the person's own discretion. This is an improvement over credit cards, no? Not as anonymous as cash/phyz transferred by hand, perhaps, but they don't work for e-commerce or international settlement.
I didn't say "authoritative source"... I said press. CNBC frequently uses the adjective "anonymous" when discussing BitCoin.
Here's an example: http://www.cnbc.com/id/101217586
Of course, they say it like it's a bad thing....
"Digital cryptographic currencies were invented by NSA, in a series of papers in the mid 1990s. In fact, there is very good reason to believe people from the NSA, if not the NSA itself, invented bitcoin."
The NSA did indeed research crypto currencies, but their research revolved around currencies that were mediated and controlled by a banking system.
The genius of BitCoin is that it completely eliminates the role of banks.
Need I explain why this idea is horrifying to any bank, regulatory body, or three-letter agency?
It seems obvious to me that BitCoin is NOT what the NSA would design, if it had its druthers.
So, I'm guessing you don't do any online shopping, use a credit/debit card, or write a check?
If you do... I'm not quite sure why you are attempting to argue against bitcoin on the anonymity front.
Bitcoin transactions can be tracked, ok cool. At least this time it's not just the bankers collecting the data to be used by bankers, for bankers. It's freely available to everyone. Does this sound like something the bankster owned NSA would create on behalf of banksters?
If you are going to go with the NSA angle, you should probably start saying something like "My uncle's cousin's step grand daughter's neighbor told me they put a secret kill switch in it so if it get's too big they can pull the plug."
I'm not arguing against BitCoin; I've mined and spent BTC myself. I'm a fan... really.
I just get my hackles up when the press calls it "anonymous". Used with other services like TOR and a mixer, then it can be anonymous. They just never mention those other steps, or the fact that anonymity is like virginity... you can only lose it once.
Monkey Logic:
So like
in the future my potential employer will ask for my BTC address,
so he can pay me, of course,
but beforehand, he runs a check on *all* of my transactions.
One Great bitToy yawl got there!
I sure hope bitcoin is NOT the future.
Edit:
Maybe it is ok, since after all "i have nothing to hide."
"...but beforehand, he runs a check on *all* of my transactions."
I don't think you understand how BitCoin works. Just because the block chain ledger is public, doesn't mean it is easy to associate persons with their transactions. It is doable, but hard. Unless you are a three letter agency, you won't even bother. And even if you are a three letter agency, it may not be possible, depending on what precautions the user took.
Nobody claimed it was easy.
A University research project might try to identify bitcoin users:
Mapping the Bitcoin Economy Could Reveal Users’ Identities
And if they can do it, then a service company can do it and sell the results.
Bitcoin transaction to currency transactions from any financial institution
localbitcoins.com Meet people locally and pay cash. track that.
Excellent idea, but it only works for small transactions (cf. FinCen form 8300).
But isn't that all we need? Do you carry 10 grand of cash in your physical wallet or do you hold maybe 50 or 100? As a currency - that is to say something to be used rather than traded for a quick buck - ya don't really need all that much. If you did, there are still those that in my local area at least that are willing to trade up to 10 grand.. enough to buy a nice second hand car. I'm not sure what cf. FinCen form 8300 refers to but it's obviously a government thing and frankly what they don't know won't hurt them (well it will - but that's another topic entirely)
In the USA, you're required to file this particular form whenever you give or receive more than $10,000 in cash in a single transaction. Failure to file is a crime, and structuring multiple transactions to avoid the reporting requirement is also a crime.
http://www.irs.gov/pub/irs-pdf/f8300.pdf
People who want to preserve their wealth across time or national boundaries want the durability of gold and the convenience of BitCoin. I'd assume most of those people have more then $10,000.
"... it is a simple matter to correlate every Bitcoin transaction to currency transactions from any financial institution, and to maintain a temporal mapping of IP addresses to transactees."
I get the bit about correlating IP Addresses to Bitcoin transactions (although this is by no means a trusted process given the existence of VPNs etc and what's to stop people from carrying out transactions from other IP Addresses at home or abroad?). But even for this to happen, each Bitcoin transaction must contain the unique encrypted data block of its owner etc.
But does the correlating of Bitcoin transactions to an individual not assume that every Bitcoin transaction is preceded by a fiat banking transaction and from the same IP Address?
I think the spies might easily end up with vast quantities of captured transaction data which showed them little more than the scale of Bitcoin transactions going on, but not who was carrying them out.
If you buy something which needs to be shipped from a retailer
that retailer will know both your BTC address and your real-World address.
The IRS then has access to the retailer's data.
The FBI can subpoena any information from anyone.
And the NSA has the info already.
Once "they" know your personal BTC address, "they" then know *each*and*every* of your transactions.
But hey, BTC are not for spending, they are only for hoarding [iaw Gresham's Law].
Thanks, very good points.
The moral of the story is never spend Bitcoins to buy anything when your address or name is required.
I have my own damn bitcoin! I buys silver coins, then I bit em to make shure they are real, then I puts em in the safe.
lol. I'm giggling. It's like picking a brand of virtual shit_coins_stones fire wood_
Hey, where's my beef jerky?
you make jerky too?
Seriously,this MAY make it one day(I have no clue)/But HOW many of you know MANY firms or businesses that will accept an illegal computer based Bitcoin.
Last I heard it was not legal tender,that alone will be the FEDS way to murder it.
Just askin?
"Alderney looks to cash in on virtual Bitcoins with Royal Mint reality"
http://www.ft.com/intl/cms/s/0/4903fc9a-591f-11e3-a7cb-00144feabdc0.html#axzz2m0R2VvAn
"The three-mile long British crown dependency has been working on plans to issue physical Bitcoins in partnership with the UK’s Royal Mint since the summer, according to documents seen by the Financial Times."
This Bitcoin thing must be coordinated. Note - it says "since the summer", that's before Bitcoins recent massive surge.
They've likely been testing it for wider implementation.
Remember, others have been making physical BitCoin for quite some time now. So, they might have thought that this was simply a silly novelty that they could copy, in order to make a few extra bucks. Like a lot of other silly commemorative crap that national mints produce all the time.
Those other Phys BTC's though are actually offline wallets with addresses contained on them that can be spent... these things are placeholder fakes.
The part of that article I found interesting was the scheme. They sell you a TOKEN that is unspendable, that you can REDEEM for a bitcoin at some point in the future...
Sounds like the gold dilution futures scam to me. Or the old goldsmith "voucher" trickeroo.
If they don't have a transparent wallet address to TOKEN issuance system, I wouldn't touch it. (not that I would anyways).
http://goldbulliondebitcard.com/
Your international currency
registration failed
you have to send them your gold in the mail for it to work.
I am of the opinion that gold is for saving.
Not a currency, won't work. Not tangible. O the Delusion. This is rich, almost as good as late 1999.
Ever been to the ME, China, India? Ever scraped to get by?
Peeps think everything in the heavens ticks around their iPhone. News for you iKidz. When this all shakes out gold and silver will stand clear IF you are still alive and not spending six hours a day in line for Fed cheesefood.
I have uttermost confidence that this is going to blow like a gas-filled balloon over wine country. 85% of the U.S. is flopping cheeseburgers. Clueless.
The gurus rarely warn what you will see when you are conscious. The witnessing, the daily realizations you wil have to deal with. "And I alone escaped to tell you."
Did Krishnamurti, Gurdjieff, Trungpa ever say, "Be careful, you may get what you wish?" Actually Ouspensky did, and Goethe.
Trungpa said "Enlightenment is the Ego's ultimate disappointment." That's because the ego, the one that wants it, has to die to get it.
Interesting times.
Fiat electronic dollars have been in use for many decades now, and they are not tangible. Remember, what has killed the fiat electronic dollar is not its intangibleness, but rather, the fact that it has been debased and corrupted.
Currencies have value because people agree they have value. Properties that people consider valuable include fungibility, divisibility, scarcity, durability, and being impervious to debasement. Something need not be tangible to have all those properties.
BitCoin has every single one of the above properties.
Now, the next step is developing technologies that allow the man in the street to use BitCoin in an everyday way. Remember how in 1986 cellphones were bulky and expensive, and used only by a tiny amount of people? Yet 15 years later they had been very widely adopted.
This is like 1990 in the cellphone era. Anybody older than 30 should remember that what really drove the early development of the cellphone system was the car phone. 1988 to 1995 was the golden age of car phones: used by a tiny fraction of people, but were a crucial step in building the network and driving adoption and acceptance.
A late to the party convert Buckaroo? Better late than never ;)
I'm stacking silver for the future, using btc as a currency. The two are not mutually exclusive.
Wish I had done my due diligence a lot sooner! Better late than never.
The reasoning and execution of BitCoin is very sound. Does this mean that it is guaranteed to succeed? No. But it is a good place to put some fiat dollars right now because it has a real chance of succeeding, IMO.
And because, FUCK YOU BERNANKE.
...and along the way we've seen dozens of cell phone mfrs come and go. Hop in your time machine, buy RIMM at the peak, and then sell it back today.
Point is that there is ZERO barrier to entry to Btc imitators. (At least the cell phone mfrs had a higher hurdle). Btc has no intellectual property or trade secrets. Whether it emerges as victor among virtually indistinguishable clones (and forebearers btw) depends solely on marketing (hype) and network (acceptance).
Its price ceiling is inversely proportional to the number of imitators and their success at marketing/acceptance. Because imitators are inumerable, you'd be a fool to put your eggs in one crypto basket.
If you go down in the woods today...
http://www.informationweek.com/security/attacks-and-breaches/bitcoin-thefts-surge-ddos-hackers-take-millions/d/d-id/1112831
OMG! Say it isn't so! You just ruined the three ring circus circle jerk of the few BTC boners that propagate this blog with BS.
Like anything digital this will happen, why should it be any different? Yeah yeah, phyz can be stolen too but it does not take much of a dumb fuck to realize it's much easier to have your goods lifted in the digital realm. Your cyber firearms are useless if they want it that bad.
Barter -> Money -> Money/Currency -> Debasing Currency -> Debt Currency -> Crypto Currency -> Barter/Money ->->??
Please understand this is merely a question being posed from a place of ignorance.
I'm proposing an e-GeorgeSmith George Smith dollar backed currency where all the George Smiths in the world agree to be held as paymaster of last resort.
If for any reason the Internet collapses and the world declines into chaos anyone holding e-GeorgeSmith dollars can knock on the doors of any George Smith living and they will pay them cash in George Smith dollars.
fuck all you pikers, I'm introducing BitJesusCoin...the first cryto-currency backed by the power of our lord and savior Jesus Christ. Jesus wants you to have a Cadillac filled with Air Jordans and iPhones so you can live large like a pimp, invest today!
Actually, if you see someone without an iToy,
you're expected to give him yours [Matthew 25:31-46].
debate.org/was-jesus-a-socialist
Um, no.
BitCoin can't be converted to Gold.... wtf?
Who pays to keep all that gold safe? Who pays for the auditors? Who pays/bribes the accounting firms?
Let's Xerox some sheets of paper and call that innovation.
All the gold bricks, would have to be issued with RFID Trackers.
Stamped with a serial number and homing beacon for storage facilities to use to prevent theft or tampering.
They would have to be held in a vault in a trust.
Then a set or fixed amount of currency is issued against the gold in the trust.
Its really quite simple to do.
Its exactly by bitcoin but with a real asset backing it.
The only way to expand the currency supply would be for more gold to be deposited.
Each Gold Note or "Coin" would be stamped with the pool number and serial number representing the gold backing its batch of currency.
If one goes to redeem their money for gold, one would deposit the coins/notes/digits into the central bank, who will have arranged the gold to be packaged and delivered to a facility for you to pick it up.
When that happens, the currency and reccord of the gold is extinguished and the currency supply deflates.
Its the PERFECT system.
It will have the ease of use of transfer of bitcoin.
The value and stability/foundation of gold.
And the ability to expand and contract according to the level of actual wealth in the society, if wealth decreases money will deflate, if wealth increases money will inflate as people depost gold.
The depositors will earn no interest on their money or gold in depositories.
And the depositories will pay for the services by issuing a small tax on storage.
This encourages people to spend their gold and keep it out of storage, growing the economy and even allocating resources to get more gold out of the ground as people would want to invest in the stability of the system.
The rest of the world would again make us the reserve currency of the world as we would have the only real money on the planet.
What people don't understand is, that ONLY RICH societies / civilizations /empires have Gold and Silver coins, its like a badge of honor or proof that your economic foundation is stronger than the rest of the worlds.
To me, any society that does not have a REALL MONEY SUPPLY in circulation is a decaying one, because everyone will choose to gamble and speculate on currency exchanges shorting and buying/selling different currencies..... if everyone sits at home and gambles for money, you will quickly render yourself extinct as a civilization.
Bitcoin? as good as gold?
Maybe if it was fools gold.
Isn't gold's concentration at the top much worse than bitcoin's (as reported by ZH the other day)?
If they actually deploy this thing I'll take a look. But not holding my breath. In the meantime, physical gold _and_ digital bitcoin.
Cyber currencies are a no brainer.
The only form of money not manipulated and controlled by the big banks.
Roll on capitalism... cyber style
No wonder Bitcoin's success!!!
The "emperor" has no clothes
Is the leviathan behind bitcoin encryption or the crowd?
If you spend, say, $3 million on electricity and hardware to crack a bitcoin encrypted file does that mean you have successfully forged one bitcoin?
What would that mean for the rest of the network? Can one forged coin exist unknown in the block chain?
I have no problem with Bitcoin just because it is a virtual currency. As David Graeber has shown so eloquently in Debt: The First 5000 Years, the closest reality that our planet has ever seen to an ideal, truly prosperous free market took place during the Middle Ages under the Islamic Caliphate. It ran on credit and trust, multiparty enterprises were all constructed on equity partnerships where all forms of usury (interest at any rate) were banned (as it was by the Roman Church at that time as well), and the various kings and sultans had no jurisdiction over commercial relationships at all. It was completely self-organizing by the merchants and producers. Commerce was plied over the Indian Ocean by adventurers like the legendary Sinbad with surprisingly little piracy. And payment was accomplished by instruments very similar to letters of credit. Integrity was paramount and no merchant or producer would consider for a moment doing business with psychopaths like Bankfiend or a Dimon once they had exposed themselves for who they were. Yes, this is all hard to believe but even our self-proclaimed awakened ones are still living in the Matrix :-) Reading Graeber's book is simply mind boggling. No wonder Skull and Bones University refused to give him tenure. He is a one man weapon of mass bullshit destruction.
My problem with Bitcoin is twofold. First, I suspect it is a Trojan Horse for the controlled NWO digital currency, welcomed through the gates of the global city as a gift from Zeus (with our Lucifer worshipping owners hidden securely within). I am also quite sure that the breakaway civilization now has fully functional quantum computers (that make a Cray 5 look like a TR-80) that can break any prime number encryption in seconds if not milliseconds. So where would an instantaneous breaking of all encryption by the dickheads-that-be leave this crypto currency?
OK. Time for the down arrows. Thanks in advance :-)
There were plenty of free markets in antiquity besides the Islamic caliphate.
What you may not know is that while the Muslims were trading amongst themselves,, they were busy ruining commerce all over the Mediterranean for non-Muslims. Rampant piracy, raiding parties, murder and mayhem were perpetrated against infidels for profit, and the Prophet.
truly prosperous free market took place during the Middle Ages under the Islamic Caliphate...
Are you saying it took Islamic principles of submission in the middle ages to create the first "prosperous free" market place? I would tend to beleive that, as their foundational tenets depend on pillaging those they come in contact with in order to divide the "booty". While they do promote "prosperous free" societies, they weren't necessarily the first.
jmo.
I'd take this over bitcoin or a usd in a heartbeat.
As Krieger suggests, perhaps you might wait to check out the details, or there might be a few skips in that heartbeat.
Hmmm. Seems that the Ministry of Injustice didn't shut down HSBC or Wells Fargo for laundering billions with the Mexican drug cartels. A slap on the wrist so light that it didn't even dent their profits from the operation. The spice must flow. We are all equal before the "law." I guess the problem is who owns the dickheads who make and enforce these laws, starting with Eric, Fast and Furious, Holder. Actually, we would all do a lot better without these stinkiiiiin laws at all.
Jeff Berwick of The Dollar Vigilante: Bitcoins for Transactions & Gold for Preserving Wealth
We have another view on the recent stage of development of the financial system and Bitcoin and Gold place in it. The more we study Bitcoin phenomena - the more we are very positively surprised how many people understand the deeply fraudulent fractional reserve banking system based on FIAT. Bitcoin is disrupting the System from within, challenging proposed Capital Controls and show appetite for FIAT alternatives. Now it is in a bubble stage - in our opinion - and whether it will survive its rise and crash remains to be seen. But it will definitely pave the way for the new monetary systems to be implemented in the future. http://sufiy.blogspot.co.uk/2013/11/jeff-berwick-of-dollar-vigilante.htm...
Why create a new currency backed by gold when you already have gold? What about James Turk's Goldmoney.com?
My third edit on this.
Goldmoney stopped working as a payment service a while ago. So this new currency would fill the void.
This scheme comes down to 'alchemy'.
....and as far as Bitcoin is concerned, watch for the IMF to issue the following in the near future: The IMF suggests to its Member Nations that b/c Bitcoin may potentially facilitate illicit & illegal transactions, tax-haven opportunities and money-laundering, it (member nations) should seek the demise and termination of this project immediately by threatening to unlicense its "merchant networt".
Meaning that the lack capability of supervision by our (illicit) powers-that-be could cause its value to head back to next to nothing.
Could happen....who knows??
Anything that takes power from whatever gov't etc. will be outlawed by the powers that be.
I thought it was just like goldmoney, then I read this at goldmoney's site. They don't work as a currency anymore:
Changes to payment serviceFrom GoldMoney’s founding in 2001, its customers all over the world had the option of using their precious metals in payment for goods and services from other GoldMoney customers willing to accept metal as a means of payment instead of a national currency.
However, owing to both the relatively low use of this service and increasing regulatory burdens, in January 2012 GoldMoney decided to stop metal payments in all countries except Jersey, Channel Islands, where GoldMoney is registered and regulated by the Jersey Financial Services Commission.
Thus, at this time the metal payment service is only available to Jersey-based customers. We plan to reinstate metal payments for customers in other countries in the future.
The death penalty could deal handily with bitcoin, but that would be dropping the mask.
To paraphrase Eric Schmidt: "If you are buying stuff you don't want anybody to know about, maybe you should be doing business in an alley.
This has been tried as noted above and then of course the Liberty Dollar. The feds shut it down immediately. I would join it if not for that risk without thinking twice. The ridiculously obvious reason for them shutting down these currencies is because it would be a real competitor to the dollar.
In my opinion they do not fear bitcoin because they already know they can control it. I can think of a dozen ways it could kill bitcoin and have already discussed. I think the bitcoin lovers are being naive, and would even themselves prefer a gold or silver backed e currency if not for the risk of gov shutdown, at least most of them.
So why is the gov talking nice about bitcoin (see yahoo story, Governmental Agencies See Benefit in Bitcoin). Well here's your answer, Gavin Andresen even said that since Bitcoin has such a head start, other crypto currencies will not be able to compete. He doesn't think they can improve enough on the original to make them truley compete with the original. He said the only thing that could would be a nationally backed crypto currency, but he didn't think governments would be foward looking enough. BS, as noted on ZH over and over, the Gov probably is fully aware of how long the dollar has left in its current form. I think they are talking nice because they want to crush bitcoin, then say huh well that didn't work but it had some good ideas, but the new E dollar keeps the benefits and corrects the problems. Poof, no more cash and all transactions can be tracked. Think its BS, see yahoo story (There is an Electronic currency that can save the US Economy and its not Bitcoin) Tell me that's not 1913 1933 1971 fo the new century, and right on time. Once again more power for the government and banks.
The Gov gets the benefit of getting rid of paper currency thus increased revenue from destroying the underground economy, and the banks get more power because they can charge you for your deposits. No different then the aforementioned dates, just updated for a new century.
The day of a digital currency tied to gold is coming but it will involve REALGOLD. The distributed ledger system behind BTC as a secure and discreet medium has value but BTC's themselves offer little utility as a store of value. Acceptance as sound money (and a store of value) requires trust and so building on a legacy that includes the FBI and orange jumpsuits hardly seems enduring. The company behind the press release is all hat and no cattle. A digital currency completely fungible with physical will be revealed early in 2014 and it sure as hell won't be based in the US http://hongkongbusiness.hk/financial-services/commentary/savvy-hong-kong...
Government Interventions In Gold Market: "The Double Face of Gold"
We have the second part of the interview with Dmitri Speck revealing the ongoing Government interventions in the Gold market. This view from Europe on the Gold Cartel and Government Interventions in Gold market is particularly important now with the announced investigations in the Gold Market manipulation by German and UK financial regulators.http://sufiy.blogspot.co.uk/2013/11/government-interventions-in-gold-mar...
Gold Manipulation - Kissinger: "Why is it against our interest to have gold in the system?" GLD, MUX, TNR.v, GDX
"We continue our research about the Gold price suppression: who is doing this manipulation and why. With Bitcoin crossing $1000 and other crypto-currencies going parabolic we can see the hunger for the FIAT alternatives. We think that despite all very positive developments introduced by Bitcoin it is in a Bubble stage now due to its unbelievable vertical rise. Its bust will bring attention back to Gold and Silver and next step will be the introduction of crypto-currency backed by Gold - it will be the real game changer. So far China is using all these games with Gold price suppression to accumulate Gold and this year we see the record buying. Announcement of its Gold reserves can bring the very sobering reality to the financial markets. China will not accept Bitcoin for its Treasury redemption and it is not going to increase its reserve holding any more. US Dollar is losing its Reserve Currency of choice status and all recent "flyover games" just confirm U.S. financial vulnerability in line with Sirya and Iran developments."
I have been advocating for this for 6 months and here is how you really do it right..
The real relationship between Gold/Silver and Bitcoins needs to be a marriage!
The way to move the whole thing forward is to open an exchange, like mtgox, but only gold and silver weights, not US$, to
be exchanged/traded for btc. You need to use small shops everywhere, like a current cash shop, or pawn broker that fronts all of
the small trading for everyone. So you give them some gold or silver and they give you btc or you give them btc and they
give you gold silver based on current gold/btc exchange rates.. all 3 things cant be touched by megalomaniacs and are outside of
"world money regulation/phantom creation" This also solves the problem of not much liquidity for the easy transfer and
payment using actual pieces of gold and silver over the internet ..... now their value is transferable to btc, which is
easily exchanged anywhere for everything starting with the most important thing wages for employment.
BTC is the same as gold in some ways , it has a finite amount available over time, cannot be "printed" into oblivion,
must be mined and is a store of wealth and no one individual or group owns the system, it belongs to everyone. To marry
the two is perfection, you give liquidity to gold/silver /other commodities via btc so they can be transferred instantly
anywhere for goods and services and you eliminate the governments and richest families from regulating it because oif its
current links to currency which they have always completely controlled for their benefits.
The numbers make sense..if you look at fractional bitcoin system the numbers more then make sense... each btc can be
broken down to units that equal .00000001 so There are really 2,099,999,997,690,000 (just over 2 quadrillion) maximum
possible units in the total maximum bitcoin design. The value of "1 BTC" represents 100,000,000 of these. there is only
around an actual 1 trillion in printed usd $ around and currently 60+ trillion in total debt http://www.usdebtclock.org/
(not including unfunded liabilities ) So there is, or will be by the year 2140 (end of bitcoin mining),
2000 times more exchangeable bitcoin units then us$ in the world and then there are no more BTC,
more gold mined down the road will just change exchange value... just change exchange value..
but both gold and bitcoins have physical limits of the total in existance.
Stop trying to back the cripto with anything other then the people's willingness to accept it, we all know the natural resources are all controlled by the powers and we all know the powers will allways try to dictate and control what we use as money, so simpley make a tradable system that can not be controlled by the powers "cripto' and thats it we have a real peoples money .
Gold needs bitcoins?
NC
Gold or bitcoin. Gold or bitcoin? Gold or bitcoin?
While you fucking idiots are busy arguing, fiat reigns supreme. Just use whatever the fuck you can that isn't fiat.
The governments do not need to stop bitcoin or gold, you guys are doing that all yourselves. Divide and conquer. It always works.
I really don't know which is better at this point. But what I do know, is tehy are BOTH better than fiat. Even Ezra is better than fiat.
I haven't heard Better Than Ezra in years. Wonder if they are still together.
I think being diversified is key. I have silver, gold, stocks, cash, digital dollars, real estate. I think bonds corporate, muni, and treasuries are a horrible value so I'm steering clear.
As far as bitcoin, I missed the boat and its too rich for my blood. All the bitcoin is worth 75% of the worlds silver, feels wrong to me, particularly with gov clampdown risk. I will get in at the right price though, 1ne at 100 bucks, two at 50, 4 at 25, 10 at 10, 100 at one and so on. Purely as a speculation. I would have to tweak this if the dollar value crashed, but I would have a similar scheme getting out. Sell 1 at 500, 2 at 1000 ect.
For those who just got lucky and are bitcoin millionaires, Congrats, but the real skill is turning it into what YOU really value, car, food, home, play station, computer, I phone, boat. Be smart and diversify, if you have 90% of your net worth in bitcoin its time to re-ballance. Even the inventor of bitcoin says its a very risky investment. I’m not saying put them all into dollars, use them directly to buy a new computer or whatever else you want. PS don’t F with the government or give them any ammo, PAY YOUR CAPITAL GAINS. You feel like you have one, but everyone who ends up in jail losses.
Personally, I do not really see bitcoin as an "investment opportunity" at this point. If anything, it helps undermine the legitimacy of fiat through anonymous transactions. (Yeah, I know it's not 100% anonymous. Nothing is). But it is more anonymous than fiat, and there are no bank transaction fees. And believe it or not, "blind signatures" are more secure than the standard credit card/paypal system.
Now, if you ask me, if the fiat system did collapse, what use would there be for bitcoin? I'd have to answer, simply, I do not know. But let's deal with that when we get there. The elimination of the fiat system has to be the first priority, and if that alone were to happen, I would be as happy as a little girl.
https://www.youtube.com/watch?v=aiUVQ-pla24
(Bitcoin) is more anonymous than fiat ...
My LCS disagrees. FRN's (in non-consecutive serial numbers) still preferred.
Investing 90% of your earnings in btc (or any one thing) is not advisable, it is new and it does have risks many of which I do not completely understand. However suppose it goes parabolic and you find your small investment now worth more than 90% of your wealth in btc, What do you do? Hard question, do I sit or do I sell, I really don't know. I guess I would just watch to see how prevalently it is adopted and actually used by the mainstream.
Casn anyone here enlighten me to something? Why are there bitcoin machines/exchanges in Canada but not in the USA? More importantly - what is the difference in the legal structure that allows them in one country but not in the other?
Paperwork. Exchange of bitcoin requires expensive money-transmitter licenses in each of the U.S states. These are little clicks protected by Western Union, check cashing shops and the like. U.S. banks generally will not service your business if it is bitcoin related. Coinbase.com has successfully navigated these waters for the time being (ex-banker honchos on their board).
The fact is Gold and Silver are controlled by the powers so no longer can be trusted as the peoples money . It took me and plenty of others years to come to grips with this as fact and now out human needs for a Healthier and uncontrolled Means of Exchange we have Cripto, coupling this new currency with anything other then the peoples willingness to use as exchange would defeat the hole concept .
The fact is Gold and Silver are controlled by the powers so no longer can be trusted as the peoples money . It took me and plenty of others years to come to grips with this as fact and now out human needs for a Healthier and uncontrolled Means of Exchange we have Cripto, coupling this new currency with anything other then the peoples willingness to use as exchange would defeat the hole concept .
It's a problem I'm not sure can ever be fixed. Tbe US had a gold-backed currency for nearly 200 years that everyone trusted. Will there ever be a nation that could create some sort of currency backed by precius metals that I would trust?
People talk about a nation like Russia or China creating some sort of currency that's backed, but I trust them as far as I can thow them. Putin gets assisinated and some Russian gangster empties their vaults? China's bubble pops and the Communists decide not to reward the bourgeiose with their gold reserves?
Bitcoin still high risk, not yet ready for mainstream - Bitcoin Foundation General Counsel
It is very important video to watch for everybody chasing Bicoin right now. Bitcoin Foundation general counsel warns: "Everybody who buys Bitcoin right now should expect to lose everything". It does not mean that Bitcoin goes to zero tomorrow, but he is very honest with the presentation of Bitcoin, its potential and its risks. The problem is not with Bitcoin - as we have wrote before, we consider it as one of the major developments in the financial industry - the problem is with the speculators driving this Bubble. Will Bitcoin survive its astronomic rise and collapse at some point to become the real alternative Currency? What will happen when 100 top holders will start cashing out? We will monitor the situation further, but already now the chart below will be the chart of the year for us here and shows the potential for the real FIAT alternatives like Gold and Silver. http://sufiy.blogspot.co.uk/2013/11/bitcoin-still-high-risk-not-yet-read...
@Sufiy, good to hear a level head out here. I don't have anything against bitcoin, though I have many concerns I have vented on this site. I do think that people would use gold and silver and in this day in age an electronic currency backed by gold and silver, but it is not allowed by the government, so bitcoin is a synthetic version.
All that said, while I understand there is going to be some bickering, I hope all understand on this site that most of us are "the smart ones" and the leaders that will have to steer our nation which ever that may be in the right direction in, what I think, will be a trying couple of decades.
You read the threads on yahoo stories and then the ones on here, and all in all there are no dummies on here. So gold silver lovers don't bash over sour grapes, and bitcoin lovers don't be sore winners, tables may turn before you know it. I think we're all for the same things on here. Financial freedom, private property rights, and most importantly individual freedom. Keep it civil if things get bad enough you may be asking these guys for help.
In 1980 pc computers weren't ready for mainstream. If btc goes mainstream globally do you doubt the eventual 22 million of them will not blow past the piddly 1200 good gamblers have run it up to now. If you do the math a million dollars of todays usd fiat per coin is easy to grasp. And if it does not happen I lose a few thousand, been in there since it was 8 a coin, but if it does happen you can visit me on my 100 foot yacht. I have gold, silver and property anyway, what I don't have is anything tied to Benny/Janets/Rottenchilds monkey money.
@ Geewhgiz. Hey I hope it does go mainstream like your saying, but this is not new technology like a computer. It is just an electronic form of currency. It isn’t anything new it is just an encrypted way of mimicking gold since the authorities will not let you use gold, silver or a gold or sliver backed electronic currency. I don’t think bitcoin would exist if they allowed a gold or silver backed electronic currency. As I have mentioned bitcoins are 75% of the market cap of all the worlds silver right now. That sounds a bit rich to me for a new unproven form of currency. The value of bitcoin is .15% of the value of all dollars, a huge number in my view. Do you think the gov will not pull out the big guns if it becomes worth 1 or 10% of the total dollars in circulation. The reason they really shut down E Gold and the Liberty Dollar was because it was a real threat to the dollar. I think the government is only tolerating bitcoin because they have already found a way to control it and will use it to their advantage.
I’m happy you made some money, and I hope you continue to do so, but consider rebalancing your portfolio, particularly if more the 50% of your wealth is in bitcoin.
@ Geewhgiz. Hey I hope it does go mainstream like your saying, but this is not new technology like a computer. It is just an electronic form of currency. It isn’t anything new it is just an encrypted way of mimicking gold since the authorities will not let you use gold, silver or a gold or sliver backed electronic currency. I don’t think bitcoin would exist if they allowed a gold or silver backed electronic currency. As I have mentioned bitcoins are 75% of the market cap of all the worlds silver right now. That sounds a bit rich to me for a new unproven form of currency. The value of bitcoin is .15% of the value of all dollars, a huge number in my view. Do you think the gov will not pull out the big guns if it becomes worth 1 or 10% of the total dollars in circulation. The reason they really shut down E Gold and the Liberty Dollar was because it was a real threat to the dollar. I think the government is only tolerating bitcoin because they have already found a way to control it and will use it to their advantage.
I’m happy you made some money, and I hope you continue to do so, but consider rebalancing your portfolio, particularly if more the 50% of your wealth is in bitcoin.
where do you sign up? there's no available link, and i'm not paying for that ft rag to see the site.
Is Bitcoin a Ponzi scheme?
http://www.garynorth.com/public/11828.cfm
Buyer beware.
Utterly junk article from a moron, I read the entire thing. Doesn't understand money as a store of value, and doesn't understand the idea of increasing market share with a finite commodity.
There are very legitimate concerns and risks with BTC - this article did not hit any of them, and further it uses a 'faith based' definition of money, arising not from an observation of reality - but a theory about its historical development.
There are significant risks with holding BTC - and when people wish to critisize it, they would do well to stick to observations and reality - not their pet theories. Reality doesn't give a shit what we think, it doesn't care how we feel - it simply is what it is, and we can only describe and understand it by observing it, instead of looking at the representations of reality we have in our heads and thinking they are real.
Gold backed 'money' will never work. Because the reciepts can be printed to infinity, and historically always have been.
The only legitimate way for gold and silver is to actually USE them, as money. That is physical gold and silver only. You can imbed gold and silver into notes, and you can obviously use coins.
A decentralized system in which individual banks offer digital transfers is the ideal method to implement accounting standards, and ease of use. Each bank would have to manage its digital gold and silver with physical gold and silver, or risk getting wiped out. The market would be a threat to counterfeit - but if a bank failed, and your digital gold and silver got vaporised, then it would be just too bad for you. Individuals would need to demand transparancy from their bank, and if they werent getting it then they had better get out.
Gold backing never works - if you want to use gold and silver as money, then they need to be physically in use. This crypto backing system is bunk, its a scam - because a crypto like BTC IS MONEY ALREADY. If you start making the crypto that can be created at will to adjust to the 'right' amount of gold or silver, it will be abused.
But that's the kicker - if the system can be abused, it will be abused - gold or not.
I disagree. I think if you want to use gold and silver as money you should be free to do so. If someone wants to give you an electronic currency backed by gold the storage facility and the owner of the gold/currency should be free to do so. I do think a storage facility could exist without giving out to many receipts, steeling the gold or sliver aka fraud. There are plenty of institutions that have maintained integrity. Those that do steal would eventually get caught and all of those ill gotten gains are then taken from them along with their freedom. People that do that are shortsighted. A storage facility that charges a reasonable rate for their services, would grow, and could allow income streams for not only the originator but for generations to come. The integrity needs to be started by the originator and supported through law.
The problem with fractional reserve banking is the fraud eventually became supported by the laws.
Gold backed 'money' will never work. Because the reciepts can be printed to infinity, and historically always have been.
It works once you recognize that it isn't money but credit.
Credit implies default risk. Deal with it, or don't.
Credit trades at a discount because of that. Take advantage, if you will (and if you trust the issuer enough), or don't. Your choice.
Bitcoin mimics gold, it is like an electronic gold. It is scarce, which keeps it valuable and inflation-proof. Also its supply grows to a logarithmic scale tapering off at the 21 million limit, whilst fiat currency grows inversely to that (exponentially) to infinity until it loses all purchasing power. The two graphs must meet and intersect whereby the supply of fiat overtakes that of bitcoin and there is an oversupply of fiat which means bitcoin will always maintain a high exchange rate, bar some black swan event such as a loss in faith event or EMP attack (or an alien invasion lol). I dont get why gold bugs and bitcoiners are arguing so much, they are both libertarians and share similar ideas, the difference being that Bitcoin has no intrinsic value unlike gold. But it serves a similar purpose to gold, only that it embraces the new technology of the our times (internet) whilst gold remains old school. Actually, you could argue that Bitcoin creates an infrastructure on the internet which is intrinsic - hardware power. Since the internet is like a brain, or a neural network, Bitcoin is like a flow of information in the brain connecting neurons (nodes). Bitcoin is beautiful because it is the culmination of programming, mathematics, cryptography, economics and physics in one concept and design. Imagine the advent of quantum computing and how that will change things further. The internet is the new battleground bitches!
I see Bitcoin as key in the emerging revolution and battle against the tyranny of the financial and political class, unless of course they embrace and corrupt it. Decetralization is the only way to end the tyranny. I sense alot of angry people fed up with the system, all waiting for the right spark to revolt. The only way out of this mess is to diversify your wealth in a mix of gold, bitcoins, cash, land/property and possibly some portfoilio investment. Hedge ur bets, dont put all ur eggs in one asset. Hell, dont forget to also invest in ur own education, knowledge and critical thinking abilities , because that will be greatly needed when the shit hits the fan.
In every crisis, lies great opportunity.
Someone said "this is the real world, where real people are responsible for real contractual engagements". Unfortunately, what you describe is not the real world of the 21st century. The FACT is, no individual human being is CAPABLE of being responsible for his "contractual engagements". I mean that seriously and literally. Even the most honest and ethical of individuals is subject to arbitrary, unethical, unilateral interference with his agreements (and all those he makes agreements with) by predators-DBA-governments, predators-DBA-corporations (mostly financial related), and predators-DBA-organizations (mostly supposedly international ones like IMF, BIS, UN, etc).
It used to be that phrases like "acts of god" were reliably tiny risks, and not often subject to utterly insane, infinitely arbitrary interference (and full-spectrum dominance and full-spectrum monitoring/spying on everyone and everything). This is no longer true in spades in the modern world of super-aggressive super-high-tech predators-that-be who cooperate with each other in order to run roughshod over every honest, ethical, benevolent, productive individual.
This understanding has huge ramifications for human trade in the future. While I am very much NOT an advocate of bitcoin (because it has zero intrinsic value), the bitcoin technology does indeed have many very valuable characteristics that address many problems in this new high-tech predator-dominated world we live in today. I too have speculated about how technology similar to that in bitcoin can be applied to a "hard money" backed up by gold and/or silver and/or other tangibles with intrinsic value.
Here are some of my observations and suggestions:
#1: Individuals should again become comfortable and habituated to trading and accepting real, physical gold and/or silver for goods. This is the ONLY fundamentally viable, reliable, non-corrupt (and non-corruptible) way to trade. 99% of objections against this are completely bogus, and most simply derive from lack of familiarity in modern times. But the fact is, gold and silver coins are just as practical and even more convenient (all things considered) as checks, debit cards and credit cards.
#2: Some moderately common situations do exist where immediately exchanging physical gold and/or silver is not practical. The most obvious example for individuals is so-called e-commerce, where an individual purchases products from a web-site or by means of a skype/phone conversation. In such cases the parties simply cannot hand each other the real, valuable goods simultaneously (exchange your gold coins for a product from amazon-dot-com). For these situations, and for many B2B situations, inherently virtual mechanisms can be convenient and worthwhile. This is where something like "bitgold" or "goldbit" would be valuable. However, even simpler schemes exist that could be managed by "gold vaults", as long as settlement with physical is never delayed by more than a few days. NOTE: settlement with real, physical gold must always and in every case occur within days, because otherwise the individuals or organizations who operate these systems absolutely, positively WILL create more receipts for gold than they have physical gold, and thereby cheat everyone, and take their theft and bribe "government officials" to enslave society --- just as always happens with fiat.
#3: The experiences everyone has with modern actors, especially predators-DBA-fictions like "government" and "corporation" make clear the need for some mechanism that inherently CANNOT be influenced, much less controlled, by any predators-DBA-fictions (organizations).
#4: Furthermore, the mechanism must absolutely, completely, inherently and reliably PROHIBIT [re-re-re-re-re]- hypothecation of the underlying physical good (gold, silver, etc). While such a characteristic CAN be implemented in the virtual/digital side of "bitgold", doing the same on the real, physical piece of gold or silver is... problematic. I see ways to attempt this, and perhaps do an adequate job of it, but in practice how can the holder of gold/silver coins or bars be made incapable of offering them as collateral of some kind? I mean, this can be done contractually by simple agreement, and the physical bars/coins can even be engraved with a statement that collateralization of that bar/coin is prohibited. But nothing can stop the holder from signing agreements that CLAIM to assign interest in the physical gold/silver, thereby invoking a legal problem, and thereby involving utterly arbitrary predators-DBA-judges and entire legal systems. One lesson we need to at least attempt to retain from bitcoin is... INHERENT complete independence from any so-called "authority". This can be done on the face of it, but we must look for ways to make multiple ownership impossible, and make even the appearance of multiple ownership impossible.
#5: I would like to incorporate a mechanism by which each "bitgold" is one specific gram of gold with a specific, unique identifier (serial number) --- and with a corresponding physical gram of gold somewhere in the world with that same serial-number on it. Furthermore, I would want some mechanism by which any individual could [perhaps interactively on the internet] have a robotic camera move to the location of that gram of gold and actually demonstrate that the corresponding gold exists. I believe 0.001 gram is the appropriate quantity of gold to make equal one "bitgold" unit, while each physical engraved piece of gold needs to be at least 10 grams, and probably 100 grams or 1000 grams, to reduce the overhead of production costs to an insignificant level. So I propose that the physical bars of gold that correspond to each "bitgold" are 100 grams, which makes each "bitgold" correspond to 0.001% of one specific physical gold bar. This retains the 1-for-1 physical backing with the practicality of 1 unit of "bitgold" being worth roughly 5 cents, and lets us require that bitgold transactions are always and forever integer units (which solves a great many annoying practical problems). So when anyone asks to see "their gold", they actually see the bar of gold that contains their gold. And when anyone redeems their "bitgold" for gold, they do not receive the serialized piece of gold their bitgold is backed by... unless for some reason no other gold can be acquired to fulfill the request within 48 hours (or some reasonable time frame).
#6: The biggest problem I see with my approach is making sure 100% backing is inherently and always enforced and also inherently and always verifiable. The problem is (perhaps surprisingly), the physical nature of gold and silver. Any real, physical good with intrinsic value must be stored in some real, physical place. Which means, predators-DBA-government and other predators-DBA-bigshots can attempt to locate one or more of the "bitgold vaults" and send their SWAT teams in to steal the physical gold and/or silver... even if all the vaults were located under the ocean floor in international waters. We must be 100% clear about the nature of the predators-that-be all across the world. They are predators, and they have only one guiding principle (actually, a "modus-operandi"), and that is "get away with whatever we can". So we can be certain that they WILL [attempt-to] steal the gold and/or silver that backs "bitgold", and we must devise a system that makes that inherently non-viable.
And THAT is a challenge!
I do have some ideas that could work, but they need refinement. I'll mention a couple of my ideas.
One is to locate the physical gold in millions of separate "vaults". Each vault would then contain only a few hundred or thousand dollars worth of gold, and make them fairly uninteresting targets for predators-DBA-anything. I'll leave the HOW of this approach to your imagination for now... maybe you have better ideas than I do.
Another idea that has difficult to predict advantages is... tagging all the gold that corresponds to every "bitgold" unit with DNA identifiers. If someone scrapes a few micrograms of skin off one of their fingers (or elsewhere), and that is somehow embedded-into or attached-to the gold bar, the source of any 100 gram bar can be recovered even if the bar is melted down, even if the melted bar is diluted by mixing with other gold bars. This provides some ability to track theft, though hopefully this ability isn't needed in practice, and is only one more reason for predators not to attempt anything nefarious.
Oops, gotta run. I'll leave this message cut short here. I welcome any additional ideas. Anyone who wants to [help] implement such a system can feel free to brainstorm with me privately. Anyone who wants to get rich by implementing such a system can... do without my help. The benefits we would all receive is a better life, more free from manipulation, enslavement and destruction by predators. The more dispersed and more NON-personalized (attached to any individual or fictional-organization), the better.
But as we consider such schemes, I must emphasize my first two points! Even the absolute best possible implementation of "bitgold" is an inherently inferior substitute for trading with physical gold when possible, and when not possible or practical, always settling receipts and claims within days. Even at best, "bitgold" should be very much a minority mechanism. Get real. Which means... get real, physical gold, and leave "virtual" for parts of life it more suits. Just because "virtual" is fantastic for many aspects of life, doesn't mean "virtual" is good for every aspect of life. In the domain of value, to the extent possible, always be real, get real, and stay real.