Backed By Gold

[DirtyExpert]

What happens when you have a crypto backed by gold? OK not gold in your pocket but a 20 year plan to produce 750,000 to 1,200,000oz of gold without parting with any. With the reserves owned outright, including full mineral rights. What are the implications of this as far as other coins are concerned? Is it a good thing? Does it change the environment positively or negatively? Any insight is valued here ty

 

[Ezio Rojas]

If a cryptocurrency is backed by something (may be gold, aluminum or bananas as bananacoin) has a big problem and is the fact that its price will remain anchored and not marked by the market.
That element causes that it is not something very attractive in the market.

 

[DirtyExpert]

Unless you wanted an anchor... Right?

 

[yocko]

How is it trustless and provable on the block chain to be backed by gold?

 

[demo]

When money is backed by a usefull commodity, it follows the fate of this commodity. When the commodity is substituted by a new one, the money dies. And this is not what we want.

That is why, since the ancient times, they decided to bake money with things that are useless commodities (but they can last forever), like gold or silver. A useless commodity (that lasts forever) cannot be substituted, because the useless always remains useless. This uselessness used to be the essential property of gold and silver that transformed them into money. But nowdays technology discovered uses for gold and silver, so they stopped being useless commodities, so they are not suitable for money objects anymore.