The Daily Sheeple
The most legitimate argument against Bitcoin, is the fact that it isn’t backed by anything tangible. While it does use math and cryptography to create scarcity, at the end of the day bitcoins are still just digits on a screen. In that regard, they aren’t that different from fiat currencies. Their value is dictated by confidence and belief, rather than real world value.
But that may be about to change. Not for bitcoin, but for digital currencies in general. The gold storage company known as Anthem Vault has decided to release a new cryptocurrency that is backed by precious metals. Each “coin” will be valued at 1 gram of gold, and will be called the “Hayek,” after Austrian Economist Friedrich Hayek. It’s slated to be released on May 25th.
In an interview with Business Insider, the CEO of Anthem Vault explained his reasoning behind creating the currency.
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.
“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.
Basically, this will be an alternative to the volatility and vulnerability of central bank issued currencies. It has the added advantage of making precious metals more versatile on the global marketplace, since physical delivery is not required.
But that brings up a troubling issue. It’s nice not having to take a delivery for every transaction, but it would also be comforting to know that you could take a delivery for physical gold if you wanted to. After all, is a currency truly backed by gold if you can’t have the gold?
So far, Anthem Vault has yet to say whether or not you’ll be able to cash in your digital coins for gold. If they did, it would create a system of checks and balances between themselves and the customer. They would have to keep a large amount of gold on hand, or else their currency will be worthless if too many people withdraw.
But if you can’t exchange your coins for a real-world product, then their currency is no better than paper gold. It’s just too tempting to say that you have the gold in a warehouse somewhere while issuing as many digital coins as you want. And that brings up another question.
We don’t know if their cryptocurrency will allow them to add new coins. It would make sense if they could. What if people bought so many coins that they were worth more than the gold they have stored? You would have to issue more coins to make sure the currency has an accurate value. But if people can’t exchange the coins for real gold, then they have the option to rake in the cash while issuing as many worthless digits as they like.
So if you’re a gold or cryptocurrency enthusiast, I’d hold off on this for now. It might turn out to be a great idea, but until all the facts are in, it’s a little too risky for my taste.
Joshua Krause is a reporter, writer and researcher at The Daily Sheeple, where this article first appeared. He was born and raised in the Bay Area and is a freelance writer and author. You can follow Joshua’s reports at Facebook or on his personal Twitter. Joshua’s website is Strange Danger.
NOTICE OF DATA BREACH Dear User, We are writing to inform you about a data security issue that may involve your Yahoo account information. What Happened? A copy of certain user account information was stolen from our systems in late 2014 by what we believe is a state-sponsored actor. We are closely coordinating with law...
12:15am EDT Breaking News The hashtag #GasShortage is trending on twitter for Tennessee. It will soon be trending elsewhere. My brother reported to me a few minutes ago that Gas stations in Greensboro NC are out of gas and those truck stops have only about 7000 Gallons as of 1155pm EST. The immediate...
World Peace: The Final Chapter By Brooks Agnew Notes from 04 September 2016 World peace has been cited by pageant misses as their life’s work for more than a century. It is the stuff of happily ever fairy tales and Mendala shifting Disney movies. Guard dropping press releases misled Neville Chamberlain and countless other kings to...
Forgiveness by Luckee1 as heard on 30 August 2016 http://tfrlive.com/luckee-with-truth-frequency-news-66847/ I know when I was a girl, I was told that we had to forgive others. The adults, especially those associated with church, always talked about forgiving others. They also talked about how Jesus died for our forgiveness. They would talk about things like forgive your...
Original post is: Watch as amazing GcMAF treatment kills cancer cells in real time… holistic doctors ‘suicided’ over this stunning breakthrough A breakthrough cancer treatment appears to be the reason why a handful of holistic doctors were recently found “suicided” is now gaining worldwide attention as a potential universal cure for cancer. And new microscopic...