Since the US government shut down the e-currencies e-gold and similar, cryptocurrencies are now being launched. How can they be used? Will they survive? How are they different from others? Will they get shut down like e-gold? Here is one article, and excerpts from a few others:
http://www.businessinsider.com/hayek-cryptocurrency-backed-by-gold-2015-5
There’s a new cryptocurrency coming, and it’s backed by gold
- May 5, 2015, 9:47 AM
There’s a new cryptocurrency coming to the market.
What makes it unique to existing cryptocurrencies like Bitcoin?
It’s backed by gold.
Anthem Vault, the metals and technology company, will launch the coin on May 25.
The coin will “be valued at 1 gram of gold at the day’s market price, [and] will serve as a more secure store of value than Bitcoin,” according to the press release. It will be called the Hayek, “after the Nobel-winning Austrian economist Friedrich Hayek.”
Anthem Blanchard, the CEO of Anthem Vault, told Business Insider that “gold is arguably the most trusted store of value of all time,” which is why he chose it to back his new cryptocurrency.
When asked about the recent volatility in the price of gold, Blanchard said, “If you look at last year, gold did go down in dollar terms, but it went up in almost any other currency terms.” He also noted that, “Forex has gotten even more volatile, in the last 10-15 years, which is scary to me.”
One use case for the Hayek coin, says Blanchard, is an alternative payment system for people in developing countries with volatile currencies. They could pay each other with the equivalent value of gold, if they each had Hayek coin wallets.
The other use case, he said, is if there is a massive distributed denial of service attack on the modern financial system.
Gold prices haven’t exactly been stable, at least in dollar terms.
“Talking with friends of mine in the intelligence agencies, they say this is a real threat,” he said. An attacker (he used the Russians as an example), “could create a massive DDoS attack, make the [financial] system inoperable. Ultimately this is how we rely on our payments.”
If a big attack hit the computers that clear payments in the banking system, people would be unable to pay for things. Bitcoin and other cryptocurrencies based on the same technology don’t work like that. There’s a decentralized system of confirming that a payment has been made, so systemic failure is (almost) theoretically impossible.
Eventually, Blanchard would like to branch beyond gold.
“We want to ultimately make every metal spendable. You aren’t going to be able to take practical delivery of plutonium or uranium in your house. But there’s no reason why you couldn’t have ownership of that metal,” he said.
Are you ready for plutocoin?
Comment:
The Truth About “Gold Backed” Cryptocurrencies
So are they really the first? They certainly aren’t the first to launch a “Gold backed” cryptocurrency. The first I recall reading about was NoFiatCoin (XNF) which trades on the Ripple Network and was launched earlier this year.
So… Anthem Vault’s new offering may be the first open source currency in this space (although some of those mentioned do trade on Ripple, which is an open source platform), but it’s far from something new and exciting. Let’s hear more about it though…So the whole currency is “backed” by only 100 grams of Gold (spot value currently US$4192)? Based on 10 million coins, that means each coin will be worth 0.00001 gram of Gold. Talk about an anticlimax, this is nothing more than a marketing stunt designed to attract new customers to the brand…..Let’s face it though. Most of these “Gold backed” cryptocurrencies are a complete farce.
The Bitcoin Crowd Reaches Out to the Gold Bugs
On the spectrum of currency ideologues, gold bugs and Bitcoin enthusiasts occupy equal but opposite positions. They’re both suspicious that governments are going to meddle around with normal money so much that it becomes useless—it’s just that one group thinks math is the antidote and the other believes in hoarding metal bars.
This week has seen the emergence of two separate plans to have the best of both worlds. Ripple, a digital payments network that allows people to transact in a range of virtual and traditional currencies, said it had developed a way for people to transact in a digital form of gold. The announcement on Tuesday came on the heels of a company called Anthem Vault saying it had created its own virtual currency backed by gold, known (inevitably) as Independence Coin.
Anthem Hayek Blanchard, who runs Anthem Vault, believes the time has come to convince believers in the gold standard that Bitcoin is more than a Ponzi scheme. Finally the two armies can join forces! “We don’t need to fight. We can coalesce,” he told Bloomberg News on Monday.
Ripple, on the other hand, hasn’t actually created a new currency. Instead, it has reached a deal with GBI, a precious metals provider, to allow people to buy gold that will sit in GBI’s vaults for an annual fee of 0.5 percent of the value of the holdings. That stash can be used as the basis for transactions on Ripple, so that one side of the transaction spends gold and the other side receives Bitcoins or another form of payment…..
Anyone Can Now Trade, Send and Spend Physical Gold Online via GBI’s Ripple Gateway
Leading Institutional Precious Metals Provider Brings Greater Liquidity to Gold With Integration to the Ripple Protocol
NEW YORK, NY–(Marketwired – Jul 29, 2014) – GBI is proud to announce that it has launched a digital, gold-backed currency via the Ripple protocol. The protocol allows clients the ability to spend their physical gold (XAU) balance online, send it electronically to friends and family, or spend it as a currency for payment anywhere Bitcoin is accepted. This new and unique capability comes from GBI’s just-launched Ripple gateway. All XAU trades are backed with physical gold deposited in six secure vaults around the world. Select market makers have already been issued XAU balances and have commenced trading.
Ripple is an open-source, decentralized payments protocol that enables anything of value to be traded through a global value web. Market makers on Ripple seamlessly exchange different units of value for trading and transactions. For example, when GBI clients pay for goods and services with gold, it can be automatically converted into dollars or another preferred unit of value for delivery to a merchant.
“Ripple changes the dynamics of value, allowing for a real-time market that can instantly trade between gold, currency, mobile minutes, and more,” said Steven Feldman, co-founder and CEO of GBI. “We have been leaders in combining technology and precious metals, and our integration into Ripple allows us to continue our push into digital currencies by enabling investors to now buy digital physical gold.”
