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UK Royal Mint Working On Plans To Issue Gold-Backed Physical Bitcoins
The implicit, and ever more explicit, institutional acceptance of the dominant cryptocurrency Bitcoin (we say dominant because as we pointed out last week, there has been an unprecedented spike of digital currencies one can pick and choose from) continues when following the surge in vendors willing to transact in BTC over Thanksgiving, the latest news comes from the birthplace of the modern central bank, the UK, where we learn that none other than the UK Royal Mint has been working on plans since this summer to issue physical Bitcoins in collaboration with the Channel Island of Alderney.
But where the story gets downright surreal is that as the FT reports, the same symbolic Bitcoin token issued by the Royal Mint "would have a gold content – a figure of £500-worth has been proposed – so that holders could conceivably melt and sell the metal if the exchange value of the currency were to collapse." In brief: a perfect, and utterly incomprehensible, fusion of (opposing) hard, soft and digital currencies all rolled into one...
From the FT:
The tiny Channel Island of Alderney is launching an audacious bid to become the first jurisdiction to mint physical Bitcoins, amid a global race to capitalise on the booming virtual currency.
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.
It wants to launch itself as the first international centre for Bitcoin transactions by setting up a cluster of services that are compliant with anti-money laundering rules, including exchanges, payment services and a Bitcoin storage vault.
So, convert a digital currency into fiat, issue plastic (or some other material) tokens (appropriately covered in some goldish color) representing "value" because suddenly the currency (supposedly) has the blessing of central banks, and then store them in some basement? Brilliant.
Just how is the UK Royal Mint involved?
The special Bitcoin would be part of the Royal Mint’s commemorative collection, which includes limited edition coins and stamps that are normally bought by collectors. It would have a gold content – a figure of £500-worth has been proposed – so that holders could conceivably melt and sell the metal if the exchange value of the currency were to collapse.
Wait, what: gold-backed Bitcoins? If so, that would be truly revolutionary because for the first time a Treasury (and by implication, a central bank) is effectively hinting that not only are they willing to fiat-ize Bitcoin, but also have the symbolic BTC token (after all Bitcoin is a digital currency by definition) serve as a commodity trap. Because once enough gold-backed physical Bitcoins are locked up in some basement in the UK, who has the master key? That's a rhetorical question by the way.
Naturally, the UK Mint is not quite eager to disclose full details while the plan is still being finalized:
David Janczewski, head of new business at the Royal Mint confirmed it had been approached by the finance minister of Alderney to “explore the possibility of manufacturing a physical commemorative coin with a Bitcoin theme”.
“Discussions have not progressed further and at this stage it remains nothing more than a concept,” he added.
But the controversy around Bitcoin has made the Alderney plan a sensitive subject. The Treasury, which owns the Royal Mint, declined to comment on the plans. George Osborne, the British chancellor, also holds the title of Master of the Mint.
Since there is understandably much confusion over what the minting process of a physical gold-backed token representing a digital currency, with the backing of an entity that does the bidding of an issuer that only believes in fiat currencies, here is the FT with the blow by blow.
An independent company will provide the Bitcoins. If the price plunged, neither Alderney nor the Royal Mint would lose anything.
The company would put the Bitcoins in an escrow account at an agreed price.
Meanwhile, the Royal Mint would take customers’ orders for its minted Bitcoins and receive money from those coin sales.
The virtual Bitcoins backing the physical coins would be held in digital storage facilities by Alderney.
The Mint would issue the commemorative Bitcoin, paying for the value of the gold content itself. Alderney would receive royalties from sales of the coins.
Coins could be redeemed for sterling at any point in Alderney for the price of a Bitcoin on that day.
All we can do at this point is sit back in wonder and amusement as we hit the pinnacle of monetary confusion, whereby the UK Royal Mint, willing to take full advantage of retail confusion, will mix hard, soft and digital currency, and produce a product... that is locked away on an island that belongs to the UK.
And all we can say is "brilliant", because if there is a better plan to meld the sentiment of both hard and digital-currency (and hence, anti-fiat) advocates, and to redirect it in a "fiat" pathway, we have yet to hear it.
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I see no difference with this idea compared to any other commemorative coin issued by any other central bank and given any other name. Alderney have simply chosen to call it Bitcoin to cash-in on the name's popularity by fooling people into thinking that it's actually a physical Bitcoin and fully interchangeable.
The value of all physical commemorative coins rises/falls according to market conditions and a physical Bitcoin will be no different.
Will it be subject and welded to the same rule as digital Bitcoins regarding the max number issued? If not, then it will dilute digital Bitcoin value thru confusion.
How does the Royal Mint or The Channel Island of Alderney have the authority to issue physical BTC?? This has bad written all over it.
ironycoin?
Could start by limiting the currency from the start, disallowing hash mining, and instead associating every existing ironycoin with a minining implement, such as a spade. Then the instruments are used to mine real gold which is then credited to the appropriate ironycoin holder.
Should Bitcoin be backed and linked to a paper trading price of an pm... no its a bad idea.
Bitcoin's advantage is its unshackled and decentralized from the current systems of control, its important that bitcoin remains a free to rise and fall on it own merits as a freely traded currency.
It's an interesting idea with a coin that has both a bitcoin value and a gold value.
Alderney ? ... I've been there a few times.
1 Pub
1 Harbour
1 Tiny Air Strip
a few houses
.... and probably less than 10 men living´there
... & "finance minister of Alderney" probably doesn't even have a computer
;-)
Of course none of this will stop the immoral, unethical and systemically corrupt activity of the LBMA BIS and Fed in corrupting the Gold market. Who will do the corruption in plain site because there is no authority that can drag them onto the streets for public execution for treason in their countries.
Bitcoin up to $ 1100 again
strong rebound in China
http://btcpost.net/
Bankster Sez:
Here slave...here is a piece of gold worth so and so today. We will sell it to you for a really high price.
Tomorrow...this piece of gold is now only worth this much. Quick, sell it at this really low price before you lose all you have invested. Fear fear fear...Oooooo.
If you do not give it up at our ever lowering price, we will come and take it from you.
We know about every digit and keystroke you use on the internet.
Channel check.
Ellen Brown on Bail-ins (the Big Disaster Coming), GMO Foods, Trans Pacific Partnership (TPP):
http://www.youtube.com/watch?v=Vtv6RBo3Pzo
Alderney Wiki "As of April 2013, the island has a population of 1,903 people and they are traditionally nicknamed vaques[2] after the cows, or else lapins[3]"
So, not really a serious attempt is it?
ps ... you do know that it's one of the few places legally still in pre-mediaeval times??
The Channel Islands are smarting at the moment, trying to replace lost income.
They recently had their pants pulled down by Her Majesty's Revenue and Customs;
http://en.wikipedia.org/wiki/VAT-free_imports_from_the_Channel_Islands
No more Moonpig for them, sadly. At least bitcoin won't give them paper cuts.
Alderney is like the land that time forgot, they are stuck in a bit of rot.
Mainly because of the ageing population and lack of investment so far.
But it's not to be totally under estimated, there is a buoyant e-gambling presence operating out of the Island.
And some talk of a large electronic waste recycling plant being built there.
Is it true that the people responsible for deciding how we live are no smarter than anyone else? (Ashton Kuschner) The system seems, how do you say ... flawed (majority sacrificing for the collective). This mess we are in, do you believe nonfeasance has allowed this to occur? The money trail has a tale to tell. Time for a new economic blue print and I don't mean one designed as pyramid with a watching eye on the top (Ponzi scheme).
OK altogether now...Lets watch the daily gold corruptioin by the LBMA and BIS as we head into the London fix......regular as clock work....but CFTC can see no corruption there...their incomes depend on it.
"Counterparty risk"====you mean you don't trust the British Empire.? how silly; I'm sure they always play cricket, you know.
If bitcoin does become legal tender then its all irrelevant.
If you can buy one loaf of bread for $1 or 1 bitcoin then the conversion would be $1=1b=1 loaf
if BTC fluctuates and the conversion is say $2=1b then why would anyone convert to bitcoins? You would end up paying $2 for a loaf of bread instead of $1
Overall, this just leads to a new tool for Wall street to make millions every year arbitraging the BTC market
I dunno, I just sleep better with a boatload of PM's at the bottom of the lake.
Your computer has about 9 dollars worth of gold in its circuitry. Your bitcoin needs physical gold to make it bitcoin. Must be the gold they are using to back bitcoin.
Must Have Oil
Without oil, it all goes to hell in a handbasket.
Bitcoin=NWO currency...
If I never heard about BitCoin again, it would be too soon.
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Welcome to the adult world of the alternatives to FIAT currencies and "End The FED" fighters. Please never mix again the religion and Investment Valuation. In a thin Sunday trade - before the Chinese market opens - Bitcoin has collapsed from $1120 to $820 at the BitStamp today. You still can buy with Bitcoin a few copies of the very important book for all Bitcoin "investors": "Extraordinary Popular Delusions and the Madness of Crowds." We congratulate all traders, who has sold it higher than their purchase price. You are welcome to follow us with other 100 Crypto-Currencies now, but better watch Gold and Silver in the next few days. http://sufiy.blogspot.co.uk/2013/12/fed-operation-twist-bitcoin-crashed-... Bubbles Chronicles: Bill Still Is Pumping Quark vs Bitcoin - Collapse Is Near
All world has gone mad: Bill Still is pumping Quark! Just watch this video and remember how the Bubble stage looks like and what are the arguments presented to buy something "which definitely will go up." We must be very close to the Bitcoin final parabolic rise before the Crash. If Bill Still can not withstand the plot to get fast rich scheme, what can we tell about the other people?
Wtf Tylers? They are thinking of making a commemorative gold coin, it's got absolutely fuck all to do with Bitcoin. I'm losing a lot of respect I had for Zerohedge.
David Janczewski, head of new business at the Royal Mint confirmed it had been approached by the finance minister of Alderney to “explore the possibility of manufacturing a physical commemorative coin with a Bitcoin theme. Discussions have not progressed further and at this stage it remains nothing more than a concept,” he added.
How is this even news? Ridiculous idea, acknowleded as a concept gets reported on?
Apparently the Kraft Foods Group now sells chocolate flavoured Philadelphia cheese spread.
How on earth do they get the chocolate flavour and the cheese flavour into the same tub of industrial plasma?
I asked an astrophysicist, and he said it was the strongest evidence he had seen so far that we live in a universe of infinite possibility.
bRitcoin