anyone interested in starting a gold/silver backer crypto currency

[Breezypointer]

hey anyone interested in starting a gold/silver back decentralized crypto currency incorporating ideas i spoke about on the january 26 show.  i am looking for people with experience in IT forex or currency markets marketing, and gold silver storage

[dsayers]

I'm way behind on the call in shows. Have you addressed why somebody would use a crypto currency that required trust in somebody holding your metal when there are competing currencies without this drawback?

[Breezypointer]

my idea would be to have decentralized vaults monitored in real time by users around the world watching their own money in vaults every dollar would be a gold/silver infused nylon paper parchment with a unique algorithm signature that would be read by a fast moving counting machine, multiple cameras with direct feed would monitor every count and transaction.  they would be placed in various friendly governments in the world, meeting all of the Aristotelian aspects of money

[dsayers]

Pardon my ignorance as I'm not much of an economics guy. Isn't "infused nylon paper parchment" different from crypto currency? Either way, I don't feel this satisfies my inquiry about a crypto currency that has the overhead of creating those dollars and having an elaborate camera system contrasted to one that does not have those overheads. Also, how do you have a "decentralized vault"? Isn't the purpose of a vault for currency backing to centralize it? If you're referring to the control as decentralized, how would this be compatible with placing it in various "friendly governments"?

 

I'm not trying to shit on your idea, but I think these are very real considerations that must be met before a proposal can even be made.

[Kevin Beal]

I just wanted to bring to your attention the concept of colored coins in the bitcoin platform. Bitcoins can actually be backed by gold or silver or any other commodity, however you decide to do it.

 

It's an already established thing with a large support community and you don't have to invest in a crazy amount of infrastructure. What you could do under this model is supply people who want to do colored coin transactions with this gold and silver monitoring service, and even potentially scripts that run to measure the current value of the gold or silver and have all kinds of flags or terms that regulate these transactions based on that (or almost anything else you decide).

 

I think that this is actually pretty damn exciting stuff and provides an enormous number of opportunities to thinkers and entrepreneurs such as yourself.

 

Consider it

[Breezypointer]

overhead naturally declines with the economies of scale, naturally with any new concept early adopters pay a premium for being first this premium is reimbursed by the inevitable rise in the value of this new currency.  With regards to decentralized vaults they would be vaults in relatively safe stable governments with a history of private property and privacy.  Switzerland Hong Kong Singapore Liechtenstein, Bermuda Cayman islands would be places where you could set up these vaults.  Now their is no guarantees in life however it is not to be the perfect currency in the perfect system rather you simply must be the best relative to the alternative.

[Breezypointer]

this is an addition to the cold silver backed cryptocurrency-  the vaults would be filled with the algorithm tagged "dollars".  Individual depositors would be given a personal encrypted algorithm that would contain the amount of currency the depositor owns.  Deposits can be made by exchange with other possessors of the crytptocurrency or using a currency exchange where fiat currencies could be exchanged for the cryptocurrency.  another layer of privacy protection could be established utilizing a encrypted mutual deposit exchange.  This exchange could be established where individuals could exchange their deposits with other depositors.  The data shared initially during the exchange would be a verification of the  participants deposit value.  Normally speaking any two depositors can exchange there deposits with one another would typically be of equal value however their could be instances where depositors could be exchanged with  unequal values so longs as the  two or more parties agree to the transaction. The purpose of these deposit exchanges is too make tracking of individual deposits transactions or withdrawals exceptionally difficult if not impossible.  Another aspect of this exchange would be the process of lending on interest, depositor insurance, setting of interest rates, and investment banking.  Crypto banks that wish to lend can do so but must issue a comparative rate of interest concurrent with the risk of default of that loan and loans outstanding.  Specific vaults can decide on types of loans, investments and asset purchases by direct voting.  The depositors voting would be represented based on the amount of currency they own relative to total bank assets.  the depositors could also vote on whether to obtain deposit insurance, relocating the location of the vaults etc.   Interest rates would be set utilizing fluctuating rates based on the factors of individual vaults relative to other participating vaults within the network. Areas at risk geopolitically would mist likely need to offer higher rates of interest to reflect the higher probability of asset seizure.

[SamuelS]

this sounds like an extremely ambitious project...I'm no expert on crypto-currency but I think I've got a pretty solid understanding of the basics of what it is and why it works (at least with regard to bitcoin specifically). below are some potential problems I see, if you can overcome these, it may well be a viable idea. I hope this critical analysis is helpful to you :)decentralized != distributed. with bitcoin the ledger is distributed, and -- so long as no one entity/group has a majority of processing power -- false entries will not be validated...a primary source of value is this ledger and it's integrity...in your proposal, the value is the physical assets, so what's to stop somebody from absconding with the physical assets?if the "vaults" are anonymously held, the assets will be stolen. if they aren't anonymous, governments may steal them...the potential for anonymity, I think, would tip the scales in favor of "traditional" crypto-currency (bitcoin.)if there is paper being used in transactions, what's to stop people from stealing those "certificates"? and what's to stop, say, the US government, from banning and confiscating them? with bitcoin I can keep an offline paper wallet buried under a rock in the woods, and even if you find it you'll need my password. the physical nature of these certificates adds additional overhead, another point for bitcoin.another source of value in bitcoin is the lack of overhead for storage and transfer of "funds"...I don't know how any physical asset-based currency could compete with that. doesn't mean it couldn't be done, I'm just drawing a blank.I'm also confused as to how economies of scale would apply to decentralized vaults...I would think it's exactly the opposite -- 100 small vaults would cost more to setup/maintain than 1 large vault with the same capacity, and would require a lot of overlap in security measures...an oversimplified example of this -- 1 vault, 1 guard, 100 vaults, 100 guards...assuming you can solve the storage problems -- I would think semi-centralized storage could overcome much of that, relying on the reputation of the storage companies to "keep 'em honest" -- what incentive is there for people to maintain the ledger? with bitcoin, you're paid in bitcoin for that job...if there are transaction fees distributed to the "miners", that could give them the incentive, but would also be another point in favor of bitcoin. surely maintaining the ledger doesn't produce gold."the inevitable rise in the value of this new currency" is also counter intuitive to me, if it's backed by gold I would think it's either a value fixed to gold OR it's value is: value of gold - overhead / units of crypto, in which case the value would be going *down* all the time... 

[Breezypointer]

i understand what your saying about bit coin's distributive capacity, however the point of what if the government confiscates the assets doesn't negate its intrinsic value, however making bitcoins illegal would hinder their value, also bitcoin bugs always talk as if bitcoin is the inevitable triumph of bitcoin over all other cryptocurriencies, this is a bias based on it being the first one, history shows often being the first in technology does not ensure its staying power, geocities predated myspace which predated facebook.  Geocities was one of the first social networks, no one today has ever heard of geocities, yahoo is a shadow of its former self as google chrome is the search engine of choice.  AS I type this there is probably 500 cryptocurrencies floating around in cyber space and there is no barrier of entry, by tying it to a precious metal you are limiting its dilution.  To me the average person in the third world would view a intangible algorithm too intangible, too esoteric,  to be trusted as real wealth. In terms of asset seizure, This system would be as decentralized as it needed to be or as centralized as it needed to be, any vault seized by a countries government would be tragic but not crippling if the network is spread globally, in a world of failing fiat having a tangible crypto precious metal exhange can be seen by a government as a sign of stability, its all relative to the geopolitical circumstances that would predominate globally in the future.  in terms of maintenance this can be offset by conservative lending

in terms of asset seizure vaults located in unstable governments or governments that have a low respect for private property would need a a global depositors insurance and higher interest rate, if the currency were to be shown as a sign of stability over time governments would see more value in maintaining the privacy and private ownership over the short term gains through confiscation.