Thursday, November 28, 2013

E-gold Founder Backs New Bitcoin Rival That Will Have Gold Reserves

 Now this is an interesting e-currency. FT reports:
The founder of one of the earliest virtual currencies has re-emerged with a rival to Bitcoin, more than five years after his first venture, e-gold, was shut down by the US Department of Justice.
Douglas Jackson is consulting for a membership organisation called Coeptis that hopes to launch a new version of his gold-backed currency, which attracted millions of users at its height.
The aim is to lure many of the people who have been attracted to Bitcoin and other virtual currencies this year, including businesses that are looking for a cheap way to process payments outside the traditional banking system.
Coeptis’s “global standard currency” would be fully backed by reserves of gold, held in a trust, effectively turning the precious metal into a medium of exchange.

16 comments:

  1. TOLDJA!!!!..Gold backed Bitcoin should even silence the Robert Wenzels of the world.

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  2. I'll be all over this in a heartbeat if it comes to fruition. I hope they do better then Bitcoin on the anonymity side.

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  3. Thus creating a centralized currency and a single point of failure. That was egold's problem to begin with.

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    1. Yup! Doug Jackson has not learned his lesson. The centralized database can be seized and so can the gold backing (just like last time). Bitcoin was created to fix this problem. This new disaster will lead people to ruin. Bitcoin is the King - everything else is noise.

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    2. Not for a long time. It may be great for exchanges, but not for storage because its value will end up at zero. I don't know how much time it will take though.

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  4. This isn't going compete with Bitcoin. The article says you'll have to get AML registered just to use it .. Pfff. Also, unless you just have a single firm storing all the world's gold (which isn't desirable) you'll need a clostly clearing mechanism. Transaction fees will be much higher than bitcoin and transactions will be slower.

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    1. Take a look at the AML sign Mt Gox hangs outside its signup button. Bitcoin ATMs palm scan.

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  5. There can be no such thing as a gold-backed Bitcoin, in the sense that Bitcoin is a decentralized cryptocurrency implemented as a highly fault-tolerant peer-to-peer transaction processing network. To introduce a gold backing is to introduce centralization, counter-party risk, and ties to the legacy financial/legal regime, all of which is missing the point of Bitcoin.

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    1. The Feds (and other govts.) badly want digital currency, but of course they want control over it. They will try and co-opt one of them and introduce laws that only 'their' e-currency may be used for all debts public, and private, and as legal tender. Other crypto currencies will be portrayed as effective terrorist drug dealers, of which they will round up a handful of techies or large holders of e-currency and send them to Guantanamo(or something similar).
      As for this gold backed e-currency scheme, indeed it is very different from present P2P crypto currency offerings, in that as pointed out they will supposedly stockpile gold to back it. Assuming they must make said locations known to 'the state' authorities, the state can swoop in at any time and confiscate under the guise that taxes are going unpaid, or financing illicit activity. Same as GLD ETF, one must also trust the gold is really there, and that is of the amount stated by the holder.

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    2. I agree. I think the government, given its revealed preference for control, cannot tolerate a crypto-currency that makes money laundering unnecessary for drug lords, sanctions evaders etc.

      Maybe making their own with slightly weaker anonymity features would allow it to compete with a Bitcoin. Anonymous enough except for "really bad guys", whom they'll track and spy on.

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  7. The guy doesn't understand the role of gold in a currency system. The role of gold (either coined, or as part of a specie standard) is to create scarcity: if you can only issue notes against gold (or silver, etc), then a scarcity of gold prevents the rampant inflation which invariably terminates fiat currencies.

    If you have some other way of restricting the issue of currency, then you don't need a specie, and what you have is a "quasi-commodity currency". Bitcoin is harder than gold. There will be no sudden discoveries of Bitcoins.

    Gold is a good currency, and Bitcoins are a good currency, but a gold-backed cryptocurrency just shows that he doesn't actually grasp what gold has historically been there to do.

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  8. Whether any one of these alternatives may be better than the other or not is immaterial to me. What matters is that any initiative to circumvent the regime economy is welcome and should be applauded. Some will fail, one might not. Maybe ALL will fail. But i support any private initiative to get around the state controlled economy. We need as many initiatives as we can get. It's a free market in currencies with the specific purpose of flipping the bird at the state.

    That's why i don't like the cynical bashing of Bitcoin.

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  9. See 12 U.S.C. 95a. See also http://dailyreckoning.com/fdrs-gold-confiscation-80-years-on/

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  10. I understand the risk involved with the accountability of holding/monitoring the physical gold at a central location. I do, however believe it is manageable. I will acknowledge though that it would be of utmost significance where (as in what country) this central location is chosen. I believe the gold would be far safer in an eastern location, Singapore/China, vs. the U.S./Europe. I know Sprott has very large physical trusts, that pass the honesty and integrity test on physical redemption. I suppose this can be done. Regardless, this currency, unlike bitcoin, has got a hold of my attention. I will be following this closely, and hopefully soon, be buying some.

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