Island territory seeks self-sufficiency with virtual currency

[Minecache]

The FT is reporting that Alderney is formulating plans to become the first international centre for Bitcoin transactions.

Alderney's finance minister has had discussions with the Royal Mint on licensing a physical coin, and the Treasury (which oversees the Royal Mint) has invited the Alderney team for talks on how a licensing scheme would work.

http://www.ft.com/cms/s/0/c61b2ce2-592b-11e3-a7cb-00144feabdc0.html#axzz2m4lANvZX

If this happens what will the recent $1000 barrier breakthrough seem like peanuts?

[benjamindees]

It's too bad, I offered to help the Principality of Sealand do this in April.  But they never responded to me.  Their loss.

Obviously it will be huge for Bitcoin, as long as it's done correctly.

The three-mile long British crown dependency has been working on plans to issue physical Bitcoins in partnership with the UK’s Royal Mint since the summer, according to documents seen by the Financial Times.

[beetcoin]

on bitcoin island, there is no use for cars. only jet skis have value.

[zimmah]

can't read the article without becoming a member....

[malevolent]

can't read the article without becoming a member....

Here you go:
http://webcache.googleusercontent.com/search?q=cache:http://www.ft.com/cms/s/0/c61b2ce2-592b-11e3-a7cb-00144feabdc0.html%23axzz2m4lANvZX&espv=210&es_sm=122&strip=0

[BitcoinByte]

I [ @BitcoinByte | Michael Parsons] get a mention in the FT article here:

"Robert McDowall, Alderney’s finance minister, over the summer was put in touch with Michael Parsons, a banker and adviser on Bitcoin. Over a meal at City restaurant Sweetings, they discussed the potential of Bitcoin and the idea of bringing it to Alderney with a physical coin was born."

(Well, I mentioned the idea/concept of a physical currency, either paper and or gold coin, backed by digitised virtual bitcoin - or 'gold 2.0')

[Elwar]

But a physical coin has not yet been perfected.

Every time it changes hands it needs to be cashed out and discarded.

[scribe]

Trying to work out how it actually works from another article at
http://m.ft.com/cms/s/0/4903fc9a-591f-11e3-a7cb-00144feabdc0.html

How would Alderney’s plan work?

An independent company will provide the Bitcoins. If the price plunged, neither Alderney nor the Royal Mint would lose anything.

The company would put the Bitcoins in an escrow account at an agreed price.

Meanwhile, the Royal Mint would take customers’ orders for its minted Bitcoins and receive money from those coin sales.

The virtual Bitcoins backing the physical coins would be held in digital storage facilities by Alderney.

The Mint would issue the commemorative Bitcoin, paying for the value of the gold content itself. Alderney would receive royalties from sales of the coins.

Coins could be redeemed for sterling at any point in Alderney for the price of a Bitcoin on that day.

Sounds like more of a token that has a value tied to Bitcoin rather than a way to use Bitcoin in Alderney, but it's an important symbolic start.  Remember, the island isn't investing in Bitcoin itself and isn't tying itself into it.

More thoughts at http://bitcoinlife.wordpress.com/2013/11/29/channel-island-wants-to-mint-gold-physical-bitcoins/

[Elwar]

Interesting, either way I would move to any country and start my business if they started using Bitcoin for their currency. (if they were open to people living in their country)

[trout]

so basically they want to start a fractional reserve for bitcoin.

They issue bitcoin tokens and promise to exchange them for [the price
of] bitcoin. Since it's backed by the Royal Mint people would trust them.

Sounds like a good plan to make money.

[benjamindees]

But a physical coin has not yet been perfected.

Every time it changes hands it needs to be cashed out and discarded.

I doubt a physical Bitcoin will ever be *perfect*.  Until it becomes just another mobile Bitcoin wallet with internet access, there will always be some risk or some limitations.

What they are creating is one way.  It's not a great way.  It's really just a medallion "backed" by Bitcoin.  It doesn't have to be discarded.  But at the denominations they seem to be considering, it won't be a very practical currency.

There are much better ways.

[BittBurger]

Interesting, either way I would move to any country and start my business if they started using Bitcoin for their currency. (if they were open to people living in their country)

10,000% agreed on this.