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Comment by nosuchthing | Hacker News Reader

Who's keeping the actual gold and who's to say it's all actually there?

also, why would I want gold/diamonds/seashells/feathers/arbitrary-relatively-useless-material backing a currency?

Your list reminded me of http://en.wikipedia.org/wiki/Rai_stones

"While the monetary system of Yap appears to use these giant stones as tokens, in fact it relies on an oral history of ownership. Being too large to move, buying an item with these stones is as easy as saying it no longer belongs to you. As long as the transaction is recorded in the oral history, it will now be owned by the person you passed it on to—no physical movement of the stone is required."

That quote reminded me of Bitcoin's block chain.

You trust the holder of the Bullion or I guess https://www.anthemvault.com/ in this case, so the difference between a piece of paper that gives you ownership of the gold would really be that you can purchase/exchange it via. a Blockchain transaction.

I'm not sure you get any advantage from the Blockchain in this case though, you still have to trust a single-party, and their local government may still require all kinds of identifying information for regulations sake from this single-party.

Further the article doesn't specify which Blockchain they are using (neither does their website)? All of the extant Blockchains aside from Bitcoin are prone to various security problems.

The Hayek is using the Counterparty token system.

>also, why would I want gold/diamonds/seashells/feathers/arbitrary-relatively-useless-material backing a currency?

To limit volatility. Bitcoin has been 5X more expensive and 1/10X the value in the past 3 years.

It is a stupid idea, but less stupid than bitcoin.

Right, you can't actually build a trustless system for gold ownership where someone else is holding the gold.

You can do things that create confidence like audits but you don't gain anything using cryptocurrency. In fact I don't see any mention of cryptocurrency or even payments/transfers/currency on the site.

It could be they're trying to solve the cryptocurrency criticism that cryptocurrencies have no intrinsic value.

The criticism is along the lines that if confidence were to drop in some currency like USD, you still have a huge military organization backing it up and claiming it as legal tender for taxes, which cryptocurrencies do not have.

On the spectrum of cryptocurrency critcisms, it's not really that valid because it involves valuation hypotheticals that quickly derive into slippery slope fallacies (e.g. WW3, etc.). With all the other cryptocurrency based scams out there, this is probably a new scam targeting a very specific demographic that has a gold-fetish.

I don't understand what this is supposed to do. There doesn't seem to be an advantage over gold ETFs and you can't do payments, which was what made e-gold useful.

Anthem Vault is a full-reserve storage system, backed by yearly full audits as well as an open door for clients to come visit their metal anytime. The name Blanchard runs deep into the history of sound money. The CEO's father, James U Blanchard III, was the leading activist in gold legalization in the 1970's. His son Anthem carries on his passion for sound money today in his company, Anthem Vault.

More questions? Contact us 1-855-4-AVAULT

Because you can't counterfeit gold.

The US Dollar, on the other hand, has been counterfeited by the federal government to the point where it has lost %99.99999999 of its value. Making it a depreciating asset. Historically, gold and silver have maintained their value.

Read what an economist has to say about it: http://mises.org/money.asp

But you can counterfeit paper gold, which is what this is.

Or perhaps more accurately, you can default on a promise to redeem a paper debt for a given amount of gold.

The US Dollar is at least upfront about it. It cannot be redeemed for gold or anything else anymore.

Also, your 10 nines seem inaccurate. Apparently $1 from 1665 would have the buying power of almost $26 today. That's certainly depreciating, but nowhere near the extent you're portraying.

The alternative is to have the government say-so (fiat) to back your currency. The U.S. dollar has value because the government can levy taxes and they say it has value. When there are physical assets backing the currency, it is less amenable to governments manipulating the value of money.

But isn't it the case that gold has an arbitrary value as well ("they say it has value")? It has no intrinsic value. It just sits there.

Gold is durable, and it is shiny and pretty - trinkets and baubles made out of it look good. Humans throughout history have regarded it as desirable and have prized it. This sort of cross-cultural widespread agreement is what gives it its value.

Sure, but it's still an agreement. There's a cross-cultural agreement that the US dollar is worth something too. I don't really see the difference, but I'm not an economist.

That said, I wouldn't make baubles out of dollars.

There's a big difference between the two.

Gold's price (in a free market, which unfortunately we don't have anymore) is an agreement of market forces-- supply and demand.

The Dollar's price comes from government use of force to make people use it. (this includes internationally.)

If you'd like to get an opinion from a good economist check out: http://mises.org/money.asp

Could not the same question be asked about the gold held by the US government?

US Dollar is not backed by gold nor emitted by the Federal Government, though.

That question can and has been asked.

http://www.bloomberg.com/news/features/2015-02-05/germany-s-...

And answered.... the answer is that there was no gold, that we had sold germany's gold, and repayment schedule was designed to allow us to print the dollars and buy the gold to send it "back" to germany.

Since the gold standard, governments are largely held together by reputation alone. If a government's reputation collapses (as has happened) then their monetary instruments (cash, bonds, etc) become effectively worthless.

In the US case in particular, the US dollar is more stable because it is so popular. So even if the US government's reputation goes down, as long as third parties continue to attribute value to it (e.g. you can buy oil with gold) then the value remains relatively static.

The same can be said in other stable currencies: Swiss Franc, Australian/NZ dollar, Canadian Dollar, British pound, and a couple of others.

Gold, diamonds, and feathers are not 'relatively useless'. Not sure about seashells.

Relatively useless in that when most individuals go about their daily life, there is no demand for any of those materials.

Take 100 random people from your mall on a saturday-- so just regular people-- how many of them do you think are using gold and silver on a daily basis?

IF you answered anything less than 100 you're wrong.

First off, how many of them have jewelry? A great deal of them do. Not just necklaces and earrings, but wedding rings. Almost all of them have both gold and silver. How about college students? Their high school ring has both gold and silver too.

How many have cellphones? Both metals are intrinsic in electronics manufacture.

How many use cars? There you get too more monetary metals of even less familiarity-- platinum and palladium are essential for catalytic converters (they use whichever is cheapest at the time.)

Finally the fact of the matter is, the use of gold and silver as currency is a perfectly legitimate, economic use. It is demand in itself. You don't need some other industrial use to justify its use as money.

Because in all of history, no superior money has been found.

People use paper currency because of Gresham's law, so long as they can, they will spend it. But people who collect wealth who have a longer view will have some of it in precious metals.

No one I know would be interesting in accepting someone else's jewelry/gold/diamonds/platinum/silver in exchange for their food at the super market or a day's worth of work.

The goal of a currency backed by a standard is to give it a predictable and concrete exchange value. Things susceptible to speculative price fluctuations would be less then ideal.

There is a self fulfilling prophecy for people who "believe" in gold and diamonds that attribute a higher value to it than the practical value or worth in industrial applications.

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