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Offline johncitizen

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Back the BTSX with physical gold
« on: September 28, 2014, 05:24:20 AM »

Looks like everything is coming together perfectly but 1 common thought is that our BTSX are not backed by anything (not entirely true).

What if it was possible to set up a centralised bank and create a process, maybe a DAC or asset that by each purchase of a unit results in the equal purchase in physical gold held in vault to back the asset. That would not simply work as when the BTSX increase in value the cheaper BTSX would not be matched by XAU. There are many possibilities to do this creating a scalable and sustainable economy. I think this is a good idea. Am I crazy ?

Having the security of physical backing would give big money the confidence in our system. You know that your 1 BTSX is safely redeemable for 1g XAU.

As the market cap of BTSX increases, how would gold reserves match the peg? Perhaps delegate burn be better directed to increasing XAU reserves.

When bitshares themselves are collateralised then the whole economy becomes collateralised. If I knew my crypto was secure like this I would move all funds save my HSBC hot wallet.

A decentralised bank with central stability.
« Last Edit: September 28, 2014, 05:45:47 AM by johncitizen »

Offline cube

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Re: Back the BTSX with physical gold
« Reply #1 on: September 28, 2014, 05:32:48 AM »
I think this goes against the idea of bitshare - decentralised banking & market, and to do so without a need to be backed by any physical asset.
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Offline Helikopterben

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Re: Back the BTSX with physical gold
« Reply #2 on: September 28, 2014, 07:49:02 AM »
You know that your 1 BTSX is safely redeemable for 1g XAU.

This is impossible because of centralization.  The United states attempted to back the USD by gold but that system failed because of a central bank making unilateral decisions about that very backing of the currency.  Also, there is nothing backing the value of gold.    Btsx has been proven to have value because people have placed value on it.  This is good enough and provides a collateralized basis in which to value other assets.

Offline vegolino

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Re: Back the BTSX with physical gold
« Reply #3 on: September 28, 2014, 07:59:28 AM »
Quote
Posted by: johncitizen
What if it was possible to set up a centralised bank and create a process, maybe a DAC or asset that by each purchase of a unit results in the equal purchase in physical gold held in vault to back the asset.
Problem in your proposal is in bold letters.
It is very easy to shut down something that is central, but very hard if not impossible something that its not.

Offline James212

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Re: Back the BTSX with physical gold
« Reply #4 on: September 28, 2014, 11:01:45 AM »
Looks like everything is coming together perfectly but 1 common thought is that our BTSX are not backed by anything (not entirely true).

What if it was possible to set up a centralised bank and create a process, maybe a DAC or asset that by each purchase of a unit results in the equal purchase in physical gold held in vault to back the asset. That would not simply work as when the BTSX increase in value the cheaper BTSX would not be matched by XAU. There are many possibilities to do this creating a scalable and sustainable economy. I think this is a good idea. Am I crazy ?

Having the security of physical backing would give big money the confidence in our system. You know that your 1 BTSX is safely redeemable for 1g XAU.

As the market cap of BTSX increases, how would gold reserves match the peg? Perhaps delegate burn be better directed to increasing XAU reserves.

When bitshares themselves are collateralised then the whole economy becomes collateralised. If I knew my crypto was secure like this I would move all funds save my HSBC hot wallet.

A decentralised bank with central stability.


What is the gold your are backing BTSX with backed buy?   Answer: it's utility and it's scarcity. (About 10-15% use in jewlary and electronics and the rest it's utility as a store of value).   

 As it stands BTSX's value is backed by the exact same thing......it's (future) utility and it's scarcity. It dose not need external backing.   The only things that need backing are things like paper receipts which represent a value higher than itself.   Think of a ticket at a movie theater, backed by the value of the experiance of watching a movie.....a coat check receipt which is backed by the coat, etc.  The USD May be the ultimate receipt that should be backed, but sadly is not.

Lastly, the backing needing to be physical is of absolutely no consequence.  An asset it as asset,period.  I'm writing this post with software that has no physical component, however I don't think anyone would argue that it is not an asset and that it does not have utility/value.
« Last Edit: September 28, 2014, 11:12:06 AM by James212 »
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Offline BldSwtTrs

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Re: Back the BTSX with physical gold
« Reply #5 on: September 28, 2014, 11:21:39 AM »
It's weird how some people think gold is the unique source of value.

Maybe Apple should back it's share with some gold ? Maybe you should put some gold in your basement to be sure your house has value ? Maybe you should mix some gold in your food to be sure that the food you eat is valuable ?

Value comes from the human mind, if some folks deemed a good valuable, then it's valuable, period. If you love gold, go buy some, but please stop thinking it's the only source of value, it's an economic nonsense.


Besides that, it's against the whole point of cryptos. We are here because Satoshi invented a decentralized way to exchange and store value, it's a reactonary idea to add centralization to the system.

Have you heard about e-gold ? It's so 2003, but you can still try it. Oh wait... actually you cannot, because it's was not viable.
« Last Edit: September 28, 2014, 11:24:01 AM by BldSwtTrs »

Offline James212

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Re: Back the BTSX with physical gold
« Reply #6 on: September 28, 2014, 11:24:37 AM »
It's weird how some people think gold is the unique source of value.

Maybe Apple should back it's share with some gold ? Maybe you should put some gold in your basement to be sure your house has value ? Maybe you should mix some gold in your food to be sure that the food you eat is valuable ?

Value comes from the human mind, if some folks deemed a good valuable, then it's valuable, period. If you love gold, go buy some, but please stop thinking it's the only source of value, it's an economic nonsense.

Besides that, it's against the whole point of cryptos. We are here because Satoshi invented a decentralized way to exchange and store value, it's a reactonary idea to add centralization to the system.

Have you heard about e-gold ? It's so 2003, but you can still try it. Oh wait... actually you cannot, because it's was not viable.

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Offline johncitizen

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Re: Back the BTSX with physical gold
« Reply #7 on: September 28, 2014, 12:38:28 PM »
The way that I see the crypto economy is that every liquid asset is backed by a number of things. Encryption, scarcity, electricity, people, networks and utility.

Gold certainly is secured. It is secured by nations, banks, governments, people and the vast utility. It has been the standard for centuries and we are not about to abandon it. Gold is well known to traditional investors and holds stability and trust.

It's weird how some people think gold is the unique source of value.

Maybe Apple should back it's share with some gold ? Maybe you should put some gold in your basement to be sure your house has value ? Maybe you should mix some gold in your food to be sure that the food you eat is valuable ?

Value comes from the human mind, if some folks deemed a good valuable, then it's valuable, period. If you love gold, go buy some, but please stop thinking it's the only source of value, it's an economic nonsense.


Besides that, it's against the whole point of cryptos. We are here because Satoshi invented a decentralized way to exchange and store value, it's a reactonary idea to add centralization to the system.

Have you heard about e-gold ? It's so 2003, but you can still try it. Oh wait... actually you cannot, because it's was not viable.

It certainly is weird that people think gold is a unique source of value. Even weirder are those who think its the "only" source of value. I do love gold and yes, I have some but I think it would be silly for apple to back its shares with gold as they are already secured by the products and fat dividend they pay. Plus we people love their products so I guess its in demand.

I really got alot out of that. I hope that it is clear I believe gold is the only thing of value. Tomorrow I should buy some more for my conflakes.

Tell me more about that decentralised way to exchange and store value. Sorry but bitcoin isn't the answer!

No, its not reactionary, its investor logic to want security.



Centralisation is not to be feared. In some instances it is the only way to do business. A bank of Switzerland owned by Invictus that acts as the central vault to secure bullion is out of the possibilities? If proper legal course is taken, how does one simply "shut down" a bank? I can safely say that the first decentralised crypto to secure the network with XAU (or organic tomatoes) in a legitimate nature will certainly see big money.

The future looks bright for bitshares but Im certain this is a great idea. Highly doubt it will ever go anywhere within invictus as we seem to jump at the word "centralised". A silly coin did try the XAU thing though. Was more of a backyard job than a serious venture. You need a bank for legal security, protection and trust. "Here john, can you store these ingots in the basement?"

I certainly agree that BTSX does have backing. But... am I guaranteed security with my bitshares? No. I cannot buy $1 of them and be guaranteed I will be able to exit at $1. I'll probably exit with $6 but I dont want that. I want my $1.

Before you tell me to buy BitUSD and earn interest, yield, dividend or whatever it is today, can you assure investors that $100,000 BitUSD will be 100k equivalent or more due to interest? No. If shit hits the fan you are stuck with 100k digital units worth X. If it was gold backed then yes, I can comfortably exit at any time.

Look at mastercoin/maidsafe. What are you going to do with your $100k mastercoin IPO? Write it off on tax? I expect that the IRS will want to know all about your little crypto eggs. You might however be the first early adopter to come out of the closet. Kudos.

The federal reserve failed, nearly every economy has. But I know Invictus is smarter and can adapt rapidly to any situation.

Offline Method-X

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Re: Back the BTSX with physical gold
« Reply #8 on: September 28, 2014, 01:23:59 PM »
You might be interested in CoinoUSD. This is essentially what they're doing only with USD not gold. It was also tried with e-gold before bitcoin and the physical gold was ceased with guns.

Offline Empirical1.1

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Re: Back the BTSX with physical gold
« Reply #9 on: September 28, 2014, 01:48:25 PM »
@ JohnC You do get $1 out with BitUSD. It's essentially a trade where if BTSX falls vs. a $, the people who are short BitUSD take a hit and if BTSX improves vs. a dollar they're in the green but the benefit to you is that your BitUSD is redeemable for close to a dollars worth of value all the time.

As for having the gold backed by a centralised entity that's a step backwards because then you just have to target the centralised entity to destroy the system.

You can already buy gold that's backed, registered in your name and stored in jurisdictions like Switzerland, Singapore, Hong Kong etc. There is a value in that. But Switzerland has been increasingly forced to give up on info on US citizens in particular, it's own currency is weaker as it's backed by less gold than it used to be, to avoid it being a safe haven. Right now in the centre of Hong Kong tear gas is being fired on protestors so who knows all might not be stable there.

BitGold is about storing the value of gold in a decentralised private way and getting the different set of advantages that decentralisation brings. Like the BitUSD trade above, holders of BitGold get to maintain the value of gold while shorts get increased exposure to the price of BtSX.

Once BitGold is stable, I imagine some third party vaults may interact with it at some stage and let you exchange BitGold for real gold and vice versa, which will be nice but you certainly don't want it backed by them.

Offline bluebit

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Re: Back the BTSX with physical gold
« Reply #10 on: September 28, 2014, 03:38:35 PM »
Exchange BitGold for real Gold at any Gold Dealer, done.

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Offline matt608

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Re: Back the BTSX with physical gold
« Reply #11 on: September 28, 2014, 03:48:34 PM »
« Last Edit: September 28, 2014, 04:05:52 PM by matt608 »

Offline Ander

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Re: Back the BTSX with physical gold
« Reply #12 on: September 28, 2014, 06:23:18 PM »
Um, no.

Did you not hear about what happened to e-gold?
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Offline cube

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Re: Back the BTSX with physical gold
« Reply #13 on: September 28, 2014, 07:49:46 PM »
The way that I see the crypto economy is that every liquid asset is backed by a number of things. Encryption, scarcity, electricity, people, networks and utility.

Gold certainly is secured. It is secured by nations, banks, governments, people and the vast utility. It has been the standard for centuries and we are not about to abandon it. Gold is well known to traditional investors and holds stability and trust.

[deleted for conciseness]

Tell me more about that decentralised way to exchange and store value. Sorry but bitcoin isn't the answer!

No, its not reactionary, its investor logic to want security.



Security. Yes.  Your concern is very valid.
 
You may like to check this thread out - https://bitsharestalk.org/index.php?topic=13.15 
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Offline bytemaster

Re: Back the BTSX with physical gold
« Reply #14 on: September 28, 2014, 08:44:00 PM »
Backing BTSX with physical gold turns it into a security.
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