The worlds of Bitcoin and gold seem to be getting more comfortable with each other than ever. The past weeks have been particularly busy for the two, with the launch of a “digital physical gold”, the discovery of golden bitcoins and Netagio’s progress on its Bitcoin-gold offerings.
The two have attracted similar yet different clientele. But both potentially offer promise to protect their investors from the inflation found with fiat, a phenomenon which many supporters allege has been taken to a new level by governments’ excessive printing of money.
Another story of interest is that of Independence Coin, a.k.a. INNCoin. It was launched by gold storage firm Anthem Vault on Independence Day at FreedomFest 2014 in Las Vegas. They join Netagio as another gold storage firm moving into digital currencies.
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A total of 10 million coins are to be mined within a year. The entire stash is said to be backed by 100 grams of gold stored at Anthem Vault. With gold currently worth $1287 per ounce, this comes out to about $4130. If all coins were in existence, each would be now worth $0.000413. Anthem Hayek Blanchard, Anthem Vault CEO and Founder said:
“This coin stands for currency independence and demonstrates the use of cryptocurrencies as micro-gold weighted instruments in commerce.”
As discussed previously with Realcoin and Ven, the notion of a currency “backed” by another asset of known value needs to be examined more closely: how is it backed, is there a redemption process and does it have any utilitarian value over and above the asset backing it.
As strange as this coin may seem to many, and even if the case is made that it’s not a true digital currency, this one may make the most sense. It is a simple, easy-to-use electronic means of transacting with gold as a currency without having to physically move it. Perhaps the same is true for the aforementioned “digital physical gold” based off of Ripple, although in all cases the exact nature of the “backing” needs to be understood.