• "Spreading the ideas of freedom loving people on matters regarding high finance, politics, constructionist Constitution, and mental masturbation of all types"

How about gold-backed Stablecoins?

Peter52

New Member
Joined
Nov 1, 2018
Messages
53
Likes
33
#1
What would be the Digital Currencies Sub-Forum of goldismoney2.com, without a thread about gold-backed Stablecoins?
So, there you go.

http://www.goldscape.net/gold-blog/gold-backed-cryptocurrency/

This list is old and not really updated, nevertheless I find it interesting, a lot of substantial infos in there.

There are many projects of gold-backed stablecoins, I believe DigixDao (Singapore), Novem (Lichtenstein), Xaurum (Slovenia), OneGram (Dubai/UAE), HelloGold (Malaysia) and Kinesis (Cayman Islands, my favourite), just to name a few, are serious projects.

So, how about gold-backed Stablecoins?
 

Peter52

New Member
Joined
Nov 1, 2018
Messages
53
Likes
33
#3
It is impossible to use physical gold and silver as a currency.
Try to buy a washing machine on Amazon and pay with a krugerrand.
Try to pay that coffee with American Eagles.
Do you really want to walk around with pieces of precious metals in your pockets when you go shopping?
 
Joined
Nov 15, 2016
Messages
490
Likes
260
#4
I agree. If you don't hold it you don't own it. Yet, what about the JPM "stable" coin that we can't touch. Also others like we can, like USDT(tethered to USD?)? What's JPM coin backed with?
 

FunnyMoney

Silver Member
Silver Miner
Joined
Apr 1, 2010
Messages
2,832
Likes
2,548
#5
It is impossible to use physical gold and silver as a currency.
...
Do you really want to walk around with pieces of precious metals in your pockets when you go shopping?
Yes, I do. That is what stupid humans need to do to be reminded about how honesty must be protected at the individual layer.

Just like we don't accept the WORD from some ordinary human or banker, we shouldn't trust those either. The weight of real gold and the pinging sound of real silver coins is required to avoid a slippery slope into dishonesty and theft.

Large purchases? Those can be handled by brinks guards and armored trucks. I would easily trade some well paid workers for the current crop of banksters stealing millions per minute from us.
 

Peter52

New Member
Joined
Nov 1, 2018
Messages
53
Likes
33
#7
@FM, is there any company, in general, that you trust?
Maybe one managed by some relative or friend of yours?
 

#48Fan

Silver Member
Silver Miner
Joined
Mar 14, 2014
Messages
560
Likes
475
#8
I can see a day where there could be a government mandated gold backed crypto in our future. TPTB are probably frothing at the mouth to enact one.
 

Someone_else

Gold Member
Gold Chaser
Sr Site Supporter
Joined
Mar 31, 2010
Messages
2,649
Likes
3,574
#9
How about a crypto currency backed by beef jerky? Enough people value jerky enough to make it desirable for trade or consumption. When you want to cash out, Amazon will fulfill the delivery.
 

FunnyMoney

Silver Member
Silver Miner
Joined
Apr 1, 2010
Messages
2,832
Likes
2,548
#10
@FM, is there any company, in general, that you trust?
Maybe one managed by some relative or friend of yours?
Escrow services work. Have you ever bought a home or a business?

Escrow services and money transfer / delivery services do work. They are trusted because they are insured and established business themselves.

We don't need the FED to tell us the money is a good as the nation itself - that is a slippery slope. While they may be trusted today, what about in the future when somebody else comes to take charge of their ship?

The founders understood these simple economic situations very well, the studied history instead of watching MTV. They wrote into the constitution the basics of honest money and thus the base for honest business - this way the trust factor is no longer something of a concern. No need to even ask that "trust" question you asked because it's no longer relevant. "Trust" can then be used for your family, friends, community and your Creator as you see fit but not forced upon you in the entire system at large by any, whoever, whatever people or things involved.
 

Mujahideen

Black Member
Midas Member
Site Supporter
Joined
Mar 31, 2010
Messages
11,221
Likes
20,555
Location
Wakanda
#11
Digital gold? Hahaha. Some people are just asking to be scammed.

Gold only exists in the physical.

Try to redeem a $20 gold certificate for a double eagle and you can see why this is a bad idea.

Maybe it could work, but I wouldn’t trust it more than the paper certificates that have already failed.
 

Joe King

Gold Member
Gold Chaser
Site Supporter
Joined
Mar 31, 2010
Messages
9,288
Likes
10,347
Location
Instant Gratification Land
#12
The only problem I see with a gold backed crypto, is if it ever starts becoming popular, what keeps a gov from seizing the gold? It's gotta be stored somewhere and everywhere it could be stored is within the jurisdiction of a nation.

So how is it proposed to keep the gold safe?

With regular crypto, there is no pile of something that can be seized in order to shut it down.
 

Mujahideen

Black Member
Midas Member
Site Supporter
Joined
Mar 31, 2010
Messages
11,221
Likes
20,555
Location
Wakanda
#13
The only problem I see with a gold backed crypto, is if it ever starts becoming popular, what keeps a gov from seizing the gold? It's gotta be stored somewhere and everywhere it could be stored is within the jurisdiction of a nation.

So how is it proposed to keep the gold safe?

With regular crypto, there is no pile of something that can be seized in order to shut it down.
What about it going bankrupt from embezzlement and leaving everyone with a bunch of worthless 1 and 0s?
 

Joe King

Gold Member
Gold Chaser
Site Supporter
Joined
Mar 31, 2010
Messages
9,288
Likes
10,347
Location
Instant Gratification Land
#14
What about it going bankrupt from embezzlement and leaving everyone with a bunch of worthless 1 and 0s?
Which crypto have gone bannkkrupt due to embezzlement?

Some have gone pretty low, is that what you me by bankrupt?
 

Mujahideen

Black Member
Midas Member
Site Supporter
Joined
Mar 31, 2010
Messages
11,221
Likes
20,555
Location
Wakanda
#15
Which crypto have gone bannkkrupt due to embezzlement?

Some have gone pretty low, is that what you me by bankrupt?
When someone steals the gold, what’s gonna happen? Or when someone writes down that they have more gold than they really do.
 

Someone_else

Gold Member
Gold Chaser
Sr Site Supporter
Joined
Mar 31, 2010
Messages
2,649
Likes
3,574
#16
I would like to amend my previous proposal. Instead of waiting for Amazon to deliver from a warehouse, a large retail chain could accept the "J COIN" and redeem them instantly with jerky from the shelf. Anyone could easily verify that, yes, there is jerky on the shelf backing "J COIN".

I'm getting hungry...
 

Joe King

Gold Member
Gold Chaser
Site Supporter
Joined
Mar 31, 2010
Messages
9,288
Likes
10,347
Location
Instant Gratification Land
#17
When someone steals the gold, what’s gonna happen? Or when someone writes down that they have more gold than they really do.
ok, so you're meaning is, how do we trust that there's any gold at all?

If you're worried about that, stick to regular cryptos.
 

FunnyMoney

Silver Member
Silver Miner
Joined
Apr 1, 2010
Messages
2,832
Likes
2,548
#18
With the weight of gold in your pocket you know you have real wealth that doesn't rely on some external factor.

If the electricity goes out or the Internet goes down. Or if the crypto exchange rate jumps up or down or the exchange you're linked up with goes offline. Or if the fiat of the realm begins to lose all it's value....

The local merchant down the street, in all the above, is still able to take your gold as payment.

Intrinsic value means politicians or bankers, in a land thousands of miles away, will be unable to steal from or delay the holder of that wealth in the commerce related activities. With intrinsic value money, to steal the money in use, they would actually need their military to come and take gold from from each individual holding real wealth.

Distributed ledger blockchain technology makes an attempt at protecting you from some of these issues, but not all of them. In addition to that, the tech is unrelated to the digital value placed upon the tokens which causes volatility we see today with the cryptos and there's absolutely nothing stopping them from moving to a near zero value, except for the "greater fool" theory. I predict all of them that are not backed by something of significant tangible value (not just the currently touted business models and fees) will eventually go to a value of near zero.

The bitcoin blockchain technology and wealth transfer mechanisms work regardless if the token coin is priced at $9000 or 9 cents.
 
Last edited:

#48Fan

Silver Member
Silver Miner
Joined
Mar 14, 2014
Messages
560
Likes
475
#19
If I were starving in the middle of the desert, the only thing I would place intrinsic value on would be food and water. PM's can and have been confiscated in the past. One of the things that give Bitcoin value is that it cannot be confiscated. It can also not be duplicated. It does not need to be "backed up" by anything.
 

FunnyMoney

Silver Member
Silver Miner
Joined
Apr 1, 2010
Messages
2,832
Likes
2,548
#21
... It does not need to be "backed up" by anything.
Yes, we know it doesn't need to be. Tulips also didn't need to be backed up by anything ...
Other than their beauty - which at one point in time, that beauty was very highly valued.

Perception of value is different than intrinsic value. A little time went by and they didn't become less beautiful, yet the perception of and desire for them did change.

The backed cryptos work as proxies or in a way like options which expire when you choose instead of on a fixed date.

But for the un-backed cyrptos: these work inside the system regardless if the token coin is trading at $9000 , $900, or at 9 cents. That is a clear indication of perceived value only, not intrinsic value and not a proxy for something else. In this situation, near zero value can be arrived at and always is.
 
Last edited:

nickndfl

Midas Member
Midas Member
Midas Supporter
Joined
Jan 7, 2011
Messages
13,580
Likes
12,703
Location
Florida
#22
It is impossible to use physical gold and silver as a currency.
Try to buy a washing machine on Amazon and pay with a krugerrand.
Try to pay that coffee with American Eagles.
Do you really want to walk around with pieces of precious metals in your pockets when you go shopping?
Well, what about buying on C.O.D.?
 

#48Fan

Silver Member
Silver Miner
Joined
Mar 14, 2014
Messages
560
Likes
475
#23
Yes, we know it doesn't need to be. Tulips also didn't need to be backed up by anything ...
Other than their beauty - which at one point in time, that beauty was very highly valued.

Perception of value is different than intrinsic value. A little time went by and they didn't become less beautiful, yet the perception of and desire for them did change.

The backed cryptos work as proxies or in a way like options which expire when you choose instead of on a fixed date.

But for the un-backed cyrptos: these work inside the system regardless if the token coin is trading at $9000 , $900, or at 9 cents. That is a clear indication of perceived value only, not intrinsic value and not a proxy for something else. In this situation, near zero value can be arrived at and always is.
Back to tulips? Is that all you've got? They do work regardless of price. So, let me see. What is the value of a permissionless, decentralized, incorruptible, non-duplicable currency that tranfers at the speed of the internet. That's right, 1 tulip.

Do everyone a favor and come back to this thread when you have an idea of what you're typing about.
 

FunnyMoney

Silver Member
Silver Miner
Joined
Apr 1, 2010
Messages
2,832
Likes
2,548
#24
Back to tulips? Is that all you've got? They do work regardless of price. So, let me see. What is the value of a permissionless, decentralized, incorruptible, non-duplicable currency that tranfers at the speed of the internet. That's right, 1 tulip.

Do everyone a favor and come back to this thread when you have an idea of what you're typing about.
I could same the same. What is this non-duplicable thing you mention? A competitor to bitcoin not possible you say?

A currency that transfers at the speed of the internet you say? What about pay pal issuing some high speed transfers?

Tulips was simply one example. History is full of examples. Are you going to use the "tell us we don't know our economics or what we type" tactic? Is that all you've got? You're vested in a scheme, I actually sincerely hope you're able to sell the highs and buy the lows. I have nothing against you and since you're a member here I'm actually rooting for you. However, I won't do that at the cost of the truth. The economics and framework of the cryptos is an open book and we read it. Or well, at least some of the members here have.
 
Last edited:

#48Fan

Silver Member
Silver Miner
Joined
Mar 14, 2014
Messages
560
Likes
475
#25
Non-duplicable = no counterfeiting. There will be competitors to Bitcoin, there already are. Pay-pal could, but they would have to start from scratch. Last I heard they were joining with FB to launch that company's stablecoin. One word: centralized. Which means they are not a competitor to Bitcoin.

Please give me one example throughout all of history that compares to Bitcoin.
 

FunnyMoney

Silver Member
Silver Miner
Joined
Apr 1, 2010
Messages
2,832
Likes
2,548
#26
Non-duplicable = no counterfeiting. There will be competitors to Bitcoin, there already are. Pay-pal could, but they would have to start from scratch. Last I heard they were joining with FB to launch that company's stablecoin. One word: centralized. Which means they are not a competitor to Bitcoin.

Please give me one example throughout all of history that compares to Bitcoin.
They don't need to keep it centralized, they may do that, but there's nothing stopping a competitor just as you said. All those can do this at the same speed as bitcoin.

My visa card works in India, it was really fast too. I got a stack of bills so fast it was amazing. Visa could establish accounts and let people transfer into those and make those decentralized using blockchain technology. When or if they decide to do that, who knows?

Just because it's unique in the electronic scope of things and with so many others in a decentralized way participating does not mean there aren't similarities with other money storage and money transfer adventures in the past.

You don't have to agree with me and I'm not going to write up a thesis on it here in this thread and try to prove it to you. And it's just a prediction... But my prediction is bitcoin will work the same as it does today, when the coin values arrives back to ten dollars - and even lower.

When that happens, I don't know, but my prediction is most here will be around to see it happen.
 

#48Fan

Silver Member
Silver Miner
Joined
Mar 14, 2014
Messages
560
Likes
475
#27
They don't need to keep it centralized, they may do that, but there's nothing stopping a competitor just as you said. All those can do this at the same speed as bitcoin.

My visa card works in India, it was really fast too. I got a stack of bills so fast it was amazing. Visa could establish accounts and let people transfer into those and make those decentralized using blockchain technology. When or if they decide to do that, who knows?

Just because it's unique in the electronic scope of things and with so many others in a decentralized way participating does not mean there aren't similarities with other money storage and money transfer adventures in the past.

You don't have to agree with me and I'm not going to write up a thesis on it here in this thread and try to prove it to you. And it's just a prediction... But my prediction is bitcoin will work the same as it does today, when the coin values arrives back to ten dollars - and even lower.

When that happens, I don't know, but my prediction is most here will be around to see it happen.
So, are you saying the likes of FB and paypal will voluntarily decide to give up their power over their new crypto? Sure thing, buddy. Something may become better than Bitcoin, but if it isn't decentralized, it is no threat to Bitcoin.

Sure, Visa and the rest work great, but they all transact in fiat. No comparison. Visa et al will never relinquish control.

There is nothing like Bitcoin that has ever existed in the past.

Bitcoin will work the same, you are correct. But, it will never see $10 again.

BTW, I'm still patiently waiting for all those historical examples.....
 

Zed

Intergalactic Chart Arse
Midas Member
Site Supporter
Joined
Mar 30, 2010
Messages
14,930
Likes
13,617
Location
Just behind you.
#28
Anything that competes with gov crypto, which I believe will be gold backed in the initial instance, will be outlawed. That probably includes gold in the long run.
 

SilverBuyer

Silver Member
Silver Miner
Joined
Jan 21, 2015
Messages
831
Likes
693
#29
They don't need to keep it centralized, they may do that, but there's nothing stopping a competitor just as you said. All those can do this at the same speed as bitcoin.

My visa card works in India, it was really fast too. I got a stack of bills so fast it was amazing. Visa could establish accounts and let people transfer into those and make those decentralized using blockchain technology. When or if they decide to do that, who knows?

Just because it's unique in the electronic scope of things and with so many others in a decentralized way participating does not mean there aren't similarities with other money storage and money transfer adventures in the past.

You don't have to agree with me and I'm not going to write up a thesis on it here in this thread and try to prove it to you. And it's just a prediction... But my prediction is bitcoin will work the same as it does today, when the coin values arrives back to ten dollars - and even lower.

When that happens, I don't know, but my prediction is most here will be around to see it happen.
Would love to see you put your money where your mouth is and short bitcoin. You can cash out those profits and be swimming in a pool of gold if it hits $10
 

Peter52

New Member
Joined
Nov 1, 2018
Messages
53
Likes
33
#30
Escrow services work. Have you ever bought a home or a business?

Escrow services and money transfer / delivery services do work. They are trusted because they are insured and established business themselves
Ok.
I just wanted to know if you have a problem with gold-backed Stablecoins per se, or just with the company that possibly manages it.
So, you trust some companies, because they are insured and established businesses.

How about a gold-backed stablecoin managed by an insured and established business?
 

Strawboss

Home Improvement Sales Trainee...
Gold Chaser
Site Supporter
Joined
Mar 31, 2010
Messages
5,938
Likes
10,521
#31
I can see it is time to introduce some reality into the discussion...

The ONLY way ANY "gold backed" financial instrument (cryptocurrency or otherwise) is a workable solution is if it is convertible to physical gold ON DEMAND...

Lacking that...they are all as trustworthy as what we are currently using...which means they are not trustworthy at all...
 

#48Fan

Silver Member
Silver Miner
Joined
Mar 14, 2014
Messages
560
Likes
475
#32
I can see it is time to introduce some reality into the discussion...

The ONLY way ANY "gold backed" financial instrument (cryptocurrency or otherwise) is a workable solution is if it is convertible to physical gold ON DEMAND...

Lacking that...they are all as trustworthy as what we are currently using...which means they are not trustworthy at all...
That's the catch. As soon as you add "backing" to a crypto, it instantly becomes centralized which makes it inferior to Bitcoin.
 

FunnyMoney

Silver Member
Silver Miner
Joined
Apr 1, 2010
Messages
2,832
Likes
2,548
#33
Would love to see you put your money where your mouth is and short bitcoin. You can cash out those profits and be swimming in a pool of gold if it hits $10
Do you know how to short it?

The ETFs are not directly tied to it, they track supplier equipment companies.
 

FunnyMoney

Silver Member
Silver Miner
Joined
Apr 1, 2010
Messages
2,832
Likes
2,548
#34
Ok.
I just wanted to know if you have a problem with gold-backed Stablecoins per se, or just with the company that possibly manages it.
So, you trust some companies, because they are insured and established businesses.

How about a gold-backed stablecoin managed by an insured and established business?
You have an excellent question - thank you for posting it.

With an escrow or a single transaction escrow service, the risk that this escrow or insurance company goes out of business is limited to the transaction time itself. With buying a house, the escrow co. may be holding the buyer's money for a month or so. With the purchase of an expensive fancy car, it might take 15 or 30 minutes.

Also, on any given day, one or two or many hundred escrow services have only a limited amount of funds placed under their control, spread among them.

If you establish a global or national trading / money system where the tokens are continually and constantly being managed for everyone in real time, always, then there's almost no limit to the amount of money at risk and the there's no limit to the time the money remains at risk.

For very large transactions where a few gold coins won't do it, with competing escrow and brinks money services, the risk is spread thin on any given day the economy is operating, and greatly limited in the macro sense by both time and amount.
 

Peter52

New Member
Joined
Nov 1, 2018
Messages
53
Likes
33
#35
@FunnyMoney,
that's not the answer I was hoping for :D, but fair enough

A gold-backed crypto-currency sounds nice, but wont be safe.
Without some reliable means of auditing, the issuers of the coin will issue coins without having the metal in vaults to back them.
@skychief,
how about a gold-backed Stablecoin with regular third party audits, through an international established auditing company like, e.g., Bureau Veritas?
Enough reliable?
If not, what would constitute "reliable means of auditing" for you?
 

southfork

Mother Lode Found
Mother Lode
Site Supporter ++
Joined
Mar 31, 2010
Messages
16,172
Likes
15,307
#36
Least we forget the paper frauds
Funds News
June 12, 2007 / 2:23 PM / 12 years ago
Morgan Stanley to settle class-action lawsuit


2 Min Read

(Recasts, adds response from Morgan Stanley)
NEW YORK, June 12 (Reuters) - Morgan Stanley (MS.N) will pay $4.4 million to settle a class-action lawsuit with brokerage clients who bought precious metals and paid storage fees, according to a court filing.
The proposed settlement, which must be approved by the federal court in Manhattan, includes a cash component of $1.5 million and economic and remedial benefits valued at about $2.9 million, according to a court filing on Monday.
The suit, filed in August 2005, alleged that Morgan Stanley told clients it was selling them precious metals that they would own in full and that the company would store.
But Morgan Stanley either made no investment specifically on behalf of those clients, or it made entirely different investments of lesser value and security, according to the complaint.
Advertisement

“While we deny the allegations, we settled the case to avoid the cost and distraction of continued litigation,” Morgan Stanley said in a statement.
According to the filing, Morgan Stanley argued there were no violations of law and no default or failure to perform or deliver precious metals.
The suit was filed by Selwyn Silberblatt, on behalf of himself and others who bought precious metals — gold, silver, platinum and palladium in bullion bar or coins — from Morgan Stanley DW Inc. and its predecessors and paid fees for their storage, according to the filing. The suit covered investors who did so between Feb. 19, 1986, and Jan. 10, 2007.
Silberblatt, a resident of Maine when the suit was filed, bought silver bars from Morgan Stanley during that period.
Advertisement
 

Peter52

New Member
Joined
Nov 1, 2018
Messages
53
Likes
33
#37
8 Reasons A Huge Gold-Mania Is About To Begin

No. 8: Gold-Backed Cryptos – A Monetary Revolution

The last catalyst for gold is cryptocurrencies backed by gold.

There are dozens of gold-backed cryptos sprouting up.

Peter Grosskopf, the CEO of Sprott, recently called gold-backed cryptocurrencies “the most important thing to happen to the gold market in the last several decades.”

Soon after, Sprott launched a gold-backed crypto it developed with its partners.

When Sprott – a leader in the natural resources industry – makes a big move into the gold-backed crypto space, it’s a definitive sign of where things are headed.

Gold-backed cryptos combine the best attributes of gold and cryptos. I can’t think of two other asset classes that have as many synergies. In other words, the whole is worth much more than the sum of the parts.

With cryptos redeemable for gold, we can now instantly send anyone anywhere in the world small or large amounts of gold – reliably and without interference. It’s nothing short of a monetary revolution.

Gold-backed cryptos are going to make using gold as money even more convenient for the average person and business. Anyone with a cell phone now can use gold in a way that was not possible before.

This is another big reason why I think gold is coming back as money.


No. 1: Basel III Moves Gold Closer to Officially Being Money Again

No. 2: Central Banks Are Buying Record Amounts of Gold

No. 3: Oil for Gold – China’s Golden Alternative

No. 4: The Fed’s Dramatic Capitulation

No. 5: Takeover Frenzy in the Gold Mining Industry

No. 6: President Trump Is Pro-Gold

No. 7: Socialism Is on the Rise


https://www.zerohedge.com/news/2019-06-19/8-reasons-huge-gold-mania-about-begin
 

skychief

enthusiastic stacker
Silver Miner
Joined
Sep 25, 2014
Messages
933
Likes
1,312
Location
California Coast
#38
@skychief,
how about a gold-backed Stablecoin with regular third party audits, through an international established auditing company like, e.g., Bureau Veritas?
Enough reliable?
If not, what would constitute "reliable means of auditing" for you?
That would do.

But who will pay the auditor(s) for their service?
 

Peter52

New Member
Joined
Nov 1, 2018
Messages
53
Likes
33
#39
How the auditors' bill get paid.
How about this: transactions are subject to fees.
Fees generate income.
With that income the company pays the auditors.
 
Joined
Nov 15, 2016
Messages
490
Likes
260
#40
I was actually quoting Saint Ponce.
You are saying that companies, pension funds, institutions etc. cannot own gold, as they cannot hold it in the basement of their headquarters
Can we actually own anything anyway?

Well here comes Libra anyway talking about big companies.