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posted by Snow on Tuesday November 29 2016, @11:21PM   Printer-friendly
from the that's-as-good-as-money-sir-those-are-IOUs dept.

The Royal Mint (the body permitted to strike British coins) have a venture with the US based CME to allow electronic trading of gold.

From the Reuters article:

The Royal Mint will put gold bars into its on-site secure vault, which will then be digitised to create RMGs [Royal Mint Gold] whose ownership will be recorded on the blockchain. Traders will then be able to trade in and out of RMGs between themselves.

Blockchain - or distributed ledger - technology keeps track of and authenticates a continuously growing list of transaction data, which is secured by a global network of computers and is virtually impossible to be tampered with or revised.

The gold would still physically reside with the Mint but could be converted to a physical delivery later. This is fairly standard practice. The Bank Of England used to just wheel a pallet from one side of a vault to another when it changed ownership. The idea seems to be to lower the cost of trading gold which has traditional involved a lot of middle layers who add margins and push up the price.


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  • (Score: 1) by YeaWhatevs on Wednesday November 30 2016, @12:27AM

    by YeaWhatevs (5623) on Wednesday November 30 2016, @12:27AM (#434747)

    Bunch of gold for a hack. Yea. Someone will figure it out.

  • (Score: 3, Interesting) by Snow on Wednesday November 30 2016, @01:05AM

    by Snow (1601) on Wednesday November 30 2016, @01:05AM (#434760) Journal

    It seems that they are using a private blockchain, not the bitcoin blockchain. I'm guessing that on their blockchain, blocks are secured by having trusted parties sign blocks at regular intervals. (I couldn't find information on the method they use to secure their blockchain.) On a private blockchain such as this, you would be able to gather up all these trusted parties and everyone would agree that a hack had taken place. Then all the parties would just rebuild their blockchain as though the hack never happened.

    Another possibility (a probability, actually) is that there is a way to do chargeback-like transactions built into their chain. The good thing would be that if someone screwed up and sent their gold to the wrong person, or in the case of a hack, then they could get their money back. The bad thing is you wouldn't really 'own' anything -- the keys or the gold.

    • (Score: 4, Insightful) by Some call me Tim on Wednesday November 30 2016, @03:12AM

      by Some call me Tim (5819) on Wednesday November 30 2016, @03:12AM (#434786)

      I agree. If I'm going to buy gold or silver, I'll take the physical stuff where I have sole possession. Less risk to me. If things get so bad that I need to use the stuff for currency, good luck finding a working network to recover your bit gold.

      --
      Questioning science is how you do science!
      • (Score: 3, Insightful) by theluggage on Wednesday November 30 2016, @12:08PM

        by theluggage (1797) on Wednesday November 30 2016, @12:08PM (#434868)

        I agree. If I'm going to buy gold or silver, I'll take the physical stuff where I have sole possession. Less risk to me. If things get so bad that I need to use the stuff for currency, good luck finding a working network to recover your bit gold.

        Fine, but when you build your private vault, be sure to leave plenty of space for bottled water, canned food, soft toilet paper, gasoline, pharmaceuticals, etc. which might end up being worth a lot more than gold if the global economy goes down the toil... er, the pit in the yard. Oh and, sorry to say, you'll probably need some guns and ammo, too if you want to keep your stuff. Otherwise, you're aiming for a very, very specific style of financial meltdown in which Walmart is still open & well-stocked, but now accepts krugerrand. Oh, and the state police will be around shortly to take your valuables into safe custody for the duration of this crisis - make sure you get a receipt (and they'll already have the guns they confiscated from the last survivalist refuge).

        Remember, folks, gold has some uses in jewellery and industry, but most of its its value comes from its use as a token, and rests on the same sort of house of cards as your dollar bill. Just like that dollar, just like your stocks, shares and pork-belly futures, that value won't survive any significant number of people trying to collect on it. You can eat gold, as many high-end patisseries have shown, but it doesn't have much nutritional value and won't make that baked rat taste any better.