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Australian Broadcast Corporation reports
Australia's biggest gold refiner, the Perth Mint, is developing its own cryptocurrency backed by physical precious metals.
The ambitious plan, which is subject to a confidentiality agreement, will make it easier for consumers to buy gold.
[...] For the Perth Mint, the need to bring investors back to precious metals after a boom in alternative investments such as cryptocurrencies posed an opportunity, according to chief executive Richard Hayes.
"I think as the world moves through times of increasing uncertainty, you're seeing people look for alternate offerings," he said.
But Mr Hayes said the volatility of some of the current cryptocurrencies meant they did not suit all investors.And that is where a gold-backed offering may fit.
"With a crypto-gold or a crypto-precious metals offering, what you will see is that gold is actually backing it," Mr Hayes said.
"So it will have all the benefits of something that is on a distributed ledger that settles very, very quickly, that is easy to trade, but is actually backed by precious metals, so there is actually something behind it, something backing it."
What do you see here: some golden cryptocurrency dust sprinkled around or a decentralized ledger of precious metal transactions?
(Score: 2) by Justin Case on Wednesday January 24 2018, @10:22PM (6 children)
I think the ledger of precious metal transactions might be the right idea, if it isn't this, perhaps something else soon.
Instead of a gold-backed cryptocurrency I'm thinking cryptocurrency-backed gold.
As I recall, some of the early experiments in "web money" didn't work out well because there was no proof that a particular real gold coin (or whatever) had been uniquely assigned to only one owner. So maybe stamp each coin with a unique serial number and keep a public blockchain of who owns each numbered coin? Unless the videos were faked, a webcam could continuously show the coins in a vault along with when each was deposited or removed. That might help to build trust.
Still, so long as there are multiple ways to hack your software and/or your credentials, I'm not ready to dump my entire retirement plan into something where the owner is only identified by an opaque string of bits.
(Score: 4, Interesting) by Justin Case on Wednesday January 24 2018, @10:40PM (5 children)
Let me flesh this out a bit so you all can tear it apart:
1. When a coin is deposited or withdrawn, the vault operator takes a close-up photo of the coin showing its serial number along with some visual indicator of whether the coin is being deposited or withdrawn.
2. At essentially the same time, the vault operator's software grabs and retains a snapshot of the current price quotes of 100 well known stocks.
Both 1 and 2 (or their hashes) are written to the blockchain and therefore known to the public as-of a certain date and time.
A crooked vault operator could have taken photo 1 any time in the past, but not in the future, because the photo had to exist at the time its hash was published to the blockchain. The hash of photo #1 proves that the physical coin movement happened on-or-before $TIMESTAMP.
A crooked vault operator could hash the stock quotes of $TIMESTAMP any time in the future, but not in the past, because if they can predict 100 quotes they have no reason to waste time with gold. The hash of stock-quotes #2 proves that the physical coin movement happened on-or-after $TIMESTAMP.
Link the two hashes into the immutable blockchain and you've pinned down a narrow point in time when the photo must have been taken.
Between the physical deposit/withdrawal transactions, the bulk of activity would be simply handing off the ownership of coin $NUMBER from $OWNER_1 to $OWNER_2.
(Score: 3, Interesting) by ben_white on Thursday January 25 2018, @12:08AM
All true. But if I was the crooked vault operator I'd mint coins made with a cheap metal and a thin gold plating and replace real coins with these fakes with identical serial numbers. The coins could change hands (well, digital wallets) many times before anyone would catch on.
(Score: 0) by Anonymous Coward on Thursday January 25 2018, @01:55AM
If this scales to any size at all, there are going to be a *lot* of vault operators...just say'n...
(Score: 2) by mhajicek on Thursday January 25 2018, @03:34AM (2 children)
If you don't have physical possession of it you don't really own it.
The spacelike surfaces of time foliations can have a cusp at the surface of discontinuity. - P. Hajicek
(Score: 2) by Justin Case on Thursday January 25 2018, @01:10PM (1 child)
While I see your point, I don't have physical possession of:
* The balances in any of my bank accounts
* The investments in my retirement plan
* The house I'm renting out
The economy that surrounds us depends heavily on record-keeping instead of physical possession. Is there a risk involved? Probably. Are most people essentially compelled to take that risk? Yeah. Is the risk of a "gold certificate" higher? Depends on whether you're dealing with a thief at the vault. And humans have developed many ways over the years of detecting and dealing with thieves. Not always successful, surely, but not a novel risk just because you add "on a blockchain".
(Score: 2) by mhajicek on Friday January 26 2018, @02:57AM
That's all well and good while society remains civilized, but when Rome falls you will own none of the above.
The spacelike surfaces of time foliations can have a cusp at the surface of discontinuity. - P. Hajicek