Can Cryptocurrency be backed by Gold?

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Can it? and How?

[Stratego]

Yes. Cryptocurrency is basically just a digital ledge of transactions. You don't have to do the mining like Bitcoin did. You can just have a powerful entity that's willing to create a certain amount of cryptocurrency and back it with gold or some kind of assets.

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I found couple articles about it.

There's a new cryptocurrency coming, and it's backed by gold

"There's a new cryptocurrency coming to the market.

What makes it unique to existing cryptocurrencies like Bitcoin?

It's backed by gold.

Anthem Vault, the metals and technology company, will launch the coin on May 25.

The coin will "be valued at 1 gram of gold at the day's market price, [and] will serve as a more secure store of value than Bitcoin," according to the press release. It will be called the Hayek, "after the Nobel-winning Austrian economist Friedrich Hayek."

Anthem Blanchard, the CEO of Anthem Vault, told Business Insider that "gold is arguably the most trusted store of value of all time," which is why he chose it to back his new cryptocurrency.

When asked about the recent volatility in the price of gold, Blanchard said, "If you look at last year, gold did go down in dollar terms, but it went up in almost any other currency terms." He also noted that, "Forex has gotten even more volatile, in the last 10-15 years, which is scary to me."

One use case for the Hayek coin, says Blanchard, is an alternative payment system for people in developing countries with volatile currencies. They could pay each other with the equivalent value of gold, if they each had Hayek coin wallets.

The other use case, he said, is if there is a massive distributed denial of service attack on the modern financial system.

Talking with friends of mine in the intelligence agencies, they say this is a real threat," he said. An attacker (he used the Russians as an example), "could create a massive DDoS attack, make the [financial] system inoperable. Ultimately this is how we rely on our payments."

If a big attack hit the computers that clear payments in the banking system, people would be unable to pay for things. Bitcoin and other cryptocurrencies based on the same technology don't work like that. There's a decentralized system of confirming that a payment has been made, so systemic failure is (almost) theoretically impossible.

Eventually, Blanchard would like to branch beyond gold.

“We want to ultimately make every metal spendable. You aren’t going to be able to take practical delivery of plutonium or uranium in your house. But there’s no reason why you couldn’t have ownership of that metal," he said.

Are you ready for plutocoin?

Read more: http://www.businessinsider.com/hayek-cr ... z3cfyJlEji


http://www.forbes.com/sites/edmundingha ... echnology/

[spacemonkey]

Electric money is just like any money. The only thing that keeps its value going is our faith in it. Could be the day will come when an oz of water is more valuable then an oz of gold.

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[spacemonkey]

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[Stratego]

How does backing the currency with gold alleviate the danger caused by hackers?
Let's say my account gets wiped out. I don't trade gold each time I make a transaction (otherwise gold would be the currency). How can I recover from the hack?

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