Digital gold currencies (and friends)

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Eduard - Gabriel Munteanu Posted: Sun, Sep 28 2008 4:25 PM

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Hi.

I searched the forums for topics related to this stuff, but found none.

I've been recently turning my attention towards digital gold currencies, like e-gold, Pecunix etc.. I feel like they're really the only Rothbardian alternative to fiat money viable for the usual customer. 1 unit of <insert such a currency> is backed by 1 gram of gold.

I'm thinking about investing in gold, since the financial crisis' end is nowhere to be seen in the near future. Buying physical gold directly presents both legal and financial difficulties. And I see the forex market involving such digital gold currencies has very low entry barriers. Moreover, I took a look at Wikipedia and saw that gold has doubled its value with respect to the US dollar, which shows a very big inflation of fiat money.

My hopes are that one day these currencies will become strong competitors for fiat money. And they really look like they're on a free market.

As for the trustworthiness of these businesses, I'm not sure. On one hand, their websites usually look horrible and don't look transparent enough, but on the other hand, they've been harassed by governments. And many of them are offshores, because they're safer from government intervention. US-established bussinesses which offered such services often had their vaults broken into and their gold confiscated, on stupid charges of "money laundry" and "illegal currency emission" (check Liberty Dollars for example). However, the side-effect of these abuses was that the US governments had to admit their records were clean and the customers had not been cheated.

I'd like to see some opinions on this matter. Anything... support, disapproval, hopes, ideas etc..

Cheers.

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mmartillo replied on Sun, Sep 28 2008 5:01 PM

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I am a strong advocate of digital currencies. I would like to see the evolution of money move forward. I would like to see a global currency.
I think that a global currency could be backed by more than one metal, even though in the past it has proven problematic. I am not talking minted coins. I'm currently reading Rothbard's History of Money, and learning about a lot more than money.

For a good source of investment in precious metals check out Amercan Elements Bullion. I hold Platimun, and Titanium because they are important in alternative energy technologies. They are very save financial investments, and they are an investment in the future welfare of everyone.

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Eduard - Gabriel Munteanu replied on Sun, Sep 28 2008 5:27 PM

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mmartillo:

I am a strong advocate of digital currencies. I would like to see the evolution of money move forward. I would like to see a global currency.
I think that a global currency could be backed by more than one metal, even though in the past it has proven problematic. I am not talking minted coins. I'm currently reading Rothbard's History of Money, and learning about a lot more than money.

It has been problematic only because either the people or the state debased them, by reducing the actual quantity of precious metal in one of them. And by Gresham's Law, the good coins went out. But this is not an issue here, because digital currency is not prone to such problems. So basically there is no problem if you say 1 unit of digital currency = 1 gram of gold + 1 gram of silver.

mmartillo:

For a good source of investment in precious metals check out Amercan Elements Bullion. I hold Platimun, and Titanium because they are important in alternative energy technologies. They are very save financial investments, and they are an investment in the future welfare of everyone.

Hmm, few merchants and exchange services will accept physical precious metals. Even when they do, I think you're better off with their digital counterparts, since you can easily buy & sell small amounts. Plus the legal problems and complications that arise.

However, I'm well aware that physical precious metals have less or no costs to deposit them. But they're not usable as money as good as their digital counterparts.

Anyway, having such money secured in tax havens looks better than keeping them hidden under the rug.

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mmartillo replied on Sun, Sep 28 2008 7:58 PM

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I checked out Pecunix. This is an excellent thing! It seems to me this system and others like it have the power to break the Fed's back. Many people and businesses need to start using these systems. It is as close a thing as I can think of to a global monetary system. I was unaware of it. Thanks for posting this.

American Elements is just about investment. I didn't mean to suggest it is a currency, although they will mint coins of just about any exotic elements you like. Why someone would want that I don't know. But they offer some very unusal investments.

thanks Marco Martillo

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Paul replied on Sun, Sep 28 2008 9:18 PM

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I like Pecunix and GoldMoney; be a bit wary of egold - they are based in the US, and have already been raided once (the US govt stole a bunch of gold).  Check out c-gold, too.