Asset backed cryptocoins?

[Wysi]

We have seen some of the assets backed crypto coins in the market on the way and do you guys think this will be the future as this is directly based on national assets like gold and other products like charcoal and energy based products.  This will help in growth of country's economy if not taken over by greedy corporatesand and and will it have government's support or soft corner in the regulator's eye as it will bring in some money from outside.

[tinyteapot]

All the Asset backed cryptocoins in existence already have the backing of the government in the country of their operations, they must be dully registered and comply with certain economic laws of such country before the license of operations can be issue to them.

Asset backed cryptocoins might not be the future because most of these national assets were in place before the advent of blockchain, i think blockchain will make them better but the future is very unpredictable.

[alyssa85]

We have seen some of the assets backed crypto coins in the market on the way and do you guys think this will be the future as this is directly based on national assets like gold and other products like charcoal and energy based products.  This will help in growth of country's economy if not taken over by greedy corporatesand and and will it have government's support or soft corner in the regulator's eye as it will bring in some money from outside.

The problem with claiming that you have an asset to back your coin is that the regulators demand proof that the asset exists. Tether for example has got into trouble for not being able to prove it is backed by a reserve of dollars.

The other asset backed coin - Venezuela's Petro - claims to be backed by oil. But no-one trusts the Venezuelan govt to make that oil available to give the coin value.

People would be better off sticking with regular kinds of cryptocurrency. If you want assets like gold or oil, buy the gold or oil company shares directly.

[Wexnident]

Probably not. There's a lot of difficulties in backing a crypto with asset and there's also the fact that it's pretty difficult that crypto is backed woth the said asset just because you said so. Plus, crypto is living quite pleasantly already. I doubt that greedy corporates would even try to hoard the coins of the market since that would just lead to the coin depreciating. Constant changing of ownership is one of the things that makes BTC avoid stagnating its price.

[NathanJB]

We have seen some of the assets backed crypto coins in the market on the way and do you guys think this will be the future as this is directly based on national assets like gold and other products like charcoal and energy based products.  This will help in growth of country's economy if not taken over by greedy corporatesand and and will it have government's support or soft corner in the regulator's eye as it will bring in some money from outside.

There were already altcoin projects in the past that are using gold as the back up assets. For some reasons, many of those ended up as failures. I guess something about the economy of their tokens were wrong. Or perhaps they were not able to come up with institutional partners. Or it could be possible also that their product does not have anything interesting.

[alyssa85]

There were already altcoin projects in the past that are using gold as the back up assets. For some reasons, many of those ended up as failures. I guess something about the economy of their tokens were wrong. Or perhaps they were not able to come up with institutional partners. Or it could be possible also that their product does not have anything interesting.

It's because they didn't have the gold to back the coins.

Holding gold is expensive (you need a secure vault). Just simply pretending that your coin is backed by gold is a scam and these types of projects fail.

[beerlover]

I have talked about this before and I seriously think that the reality is there are not that many ways to cash out and that is why it is definitely looking like just a regular crypto coin if there is no cashing out method.

Let's say there is a stablecoin that is backed by gold right? Whatever the marketcap of that coin is the amount of gold that coins operators hold, there is a team (which makes it centralized which is the issue) that is literally all they do is get golds or storage the golds and what not and even if there is 1 to 1 ratio that every single ounce is covered with that coin, how are you going to give that coin back and get the gold instead?

You can't hence that is why asset backed ones are not popular or easily doable, there are many issues with it and can't be done easily.

[The Sceptical Chymist]

The problem with claiming that you have an asset to back your coin is that the regulators demand proof that the asset exists. Tether for example has got into trouble for not being able to prove it is backed by a reserve of dollars.

I wasn't aware of Tether's problems, but I'm not surprised.  I don't really follow or care about stablecoins much, because I don't think they're interesting and they really aren't necessary.  They generate a lot of discussion around here, but for the life of me I can't understand what all the hype is about.

We don't need any cryptocurrency backed by anything.  There just isn't a need for it IMO, and it kind of goes against the spirit of cryptocurrency, not to mention that concepts like the gold standard are almost archaic these days.  We've been using fiat backed by nothing more than a government's reputation for many years now and usually it works fine.

If you want gold, buy physical gold--not a cryptocurrency presumably backed by gold, which could be a scam.  Failing that, you could always buy "paper gold" or invest in mining stocks or something similar.  This concept of crypto backed by a physical asset just leaves a bad taste in my mouth.

[silversurfer1958]

We have seen some of the assets backed crypto coins in the market on the way and do you guys think this will be the future as this is directly based on national assets like gold and other products like charcoal and energy based products.  This will help in growth of country's economy if not taken over by greedy corporatesand and and will it have government's support or soft corner in the regulator's eye as it will bring in some money from outside.

This is just a short-term trend and it cannot be applied to the whole world. because coins are still heavily manipulated and the SEC is not involved to solve this problem.
These are just risky decisions of some financial experts in enterprises that are in surplus of capital. so I don't appreciate this strategy, it's too risky.

[hugeblack]

I think there is a mistake in the word "Asset-backed crypto coins" because crypto means the possibility of transactions without the control of any third party "decentralized" while the backed currencies mean the existence of a central authority that supports the stability of the currency.

What is the purpose of the backed? Stability can be decentralized and therefore the concept of backed coins may not affect if values ​​are stable.
The basis of support is to ensure that money has a value that can be relied upon and not simply promises. in other words that it is a representation of valuable assets such as gold in any form.

[alyssa85]

I wasn't aware of Tether's problems, but I'm not surprised.  I don't really follow or care about stablecoins much, because I don't think they're interesting and they really aren't necessary.  They generate a lot of discussion around here, but for the life of me I can't understand what all the hype is about.

The US justice department is investigating Tether and it's place in bitcoin rallies:

https://www.bloomberg.com/news/articles/2018-11-20/bitcoin-rigging-criminal-probe-is-said-to-focus-on-tie-to-tether

If it's not backed by dollars, then a rally based on Tether pretending that it is dollars is a scam. I wouldn't hold tether for anything in the world.

If people want dollars, hold real dollars not a fake coin like Tether.

[Yatsan]

The problem with claiming that you have an asset to back your coin is that the regulators demand proof that the asset exists. Tether for example has got into trouble for not being able to prove it is backed by a reserve of dollars.

I wasn't aware of Tether's problems, but I'm not surprised.  I don't really follow or care about stablecoins much, because I don't think they're interesting and they really aren't necessary.  They generate a lot of discussion around here, but for the life of me I can't understand what all the hype is about.

We don't need any cryptocurrency backed by anything.  There just isn't a need for it IMO, and it kind of goes against the spirit of cryptocurrency, not to mention that concepts like the gold standard are almost archaic these days.  We've been using fiat backed by nothing more than a government's reputation for many years now and usually it works fine.

If you want gold, buy physical gold--not a cryptocurrency presumably backed by gold, which could be a scam.  Failing that, you could always buy "paper gold" or invest in mining stocks or something similar.  This concept of crypto backed by a physical asset just leaves a bad taste in my mouth.

So what do you think about this project?

https://bitcointalk.org/index.php?topic=5161544

This project is backed by gold.

I am not really sure how things worked if the cryptocurrency will be backed by anything, so if the price goes up, their *gold* will be stacked up also?
I know that crypto will depend on supply and demand, but how about their physical equivalent?
Someone, please give me knowledge about this kind of project. Thank you.

[BitHodler]

Let's say there is a stablecoin that is backed by gold right? Whatever the marketcap of that coin is the amount of gold that coins operators hold, there is a team (which makes it centralized which is the issue) that is literally all they do is get golds or storage the golds and what not and even if there is 1 to 1 ratio that every single ounce is covered with that coin, how are you going to give that coin back and get the gold instead?

Generally speaking, there is always an entity you can sell your stable or whatever backed coin to, and they will then give you the underlying asset back, in case of your example, they will ship the gold to you.

The problem however is that gold needs to be insured before shipping and there may be VAT that you are subject to, so there is an additional cost that you have to take into consideration before you cash out your gold backed coin.

I rather buy real gold than some crappy crypto currency that's backed by gold.... it makes no sense for me at all and I'm glad to see that more people have a similar thinking.

[Wysi]

We have seen some of the assets backed crypto coins in the market on the way and do you guys think this will be the future as this is directly based on national assets like gold and other products like charcoal and energy based products.  This will help in growth of country's economy if not taken over by greedy corporatesand and and will it have government's support or soft corner in the regulator's eye as it will bring in some money from outside.

The problem with claiming that you have an asset to back your coin is that the regulators demand proof that the asset exists. Tether for example has got into trouble for not being able to prove it is backed by a reserve of dollars.

The other asset backed coin - Venezuela's Petro - claims to be backed by oil. But no-one trusts the Venezuelan govt to make that oil available to give the coin value.

People would be better off sticking with regular kinds of cryptocurrency. If you want assets like gold or oil, buy the gold or oil company shares directly.

Thanks for highlighting the other side of asset backed crypto as well,  yes you are right when we initialy heard about Petro we thought it will break all the barriers but we don't see any further development, Tether running into trouble with authorities as they demand proof of asset which is fair from their point of view but not feasible to show accounts to regulator's everything make it too centralize and we will lose out on decentralized nature of it.

[Mometaskers]

I'm skeptical with these so called asset backed crypto. How would I be completely sure they have enough asset to back up their coins? I'd probably rather just buy gold than buy a coin that is supposed to be backed by gold.

So basically physical assets and then crypto. Or stocks in a company that produces the good if you really want to be in commodities.

[Wysi]

I'm skeptical with these so called asset backed crypto. How would I be completely sure they have enough asset to back up their coins? I'd probably rather just buy gold than buy a coin that is supposed to be backed by gold.

So basically physical assets and then crypto. Or stocks in a company that produces the good if you really want to be in commodities.

Yes I have just realized it with some expert reviews on my post and now I got a clear picture of the other side of asset based crypto and there demerits, but there are some projects which is backed by their government but it will not take longer for them to develop conflicts just like how it happened with Tether. I think crypto will be better without any government backed projects.

[Kyraishi]

We have seen some of the assets backed crypto coins in the market on the way and do you guys think this will be the future as this is directly based on national assets like gold and other products like charcoal and energy based products.  This will help in growth of country's economy if not taken over by greedy corporatesand and and will it have government's support or soft corner in the regulator's eye as it will bring in some money from outside.

The problem with claiming that you have an asset to back your coin is that the regulators demand proof that the asset exists. Tether for example has got into trouble for not being able to prove it is backed by a reserve of dollars.

Agreed, that's basically the biggest issue with USD based stablecoins, and other coins that claim to be holding reserves of gold in order to protect user's funds. Often times, stablecoins don't have large amounts of capital that they claim.

I'm skeptical with these so called asset backed crypto. How would I be completely sure they have enough asset to back up their coins? I'd probably rather just buy gold than buy a coin that is supposed to be backed by gold.

So basically physical assets and then crypto. Or stocks in a company that produces the good if you really want to be in commodities.

Yes I have just realized it with some expert reviews on my post and now I got a clear picture of the other side of asset based crypto and there demerits, but there are some projects which is backed by their government but it will not take longer for them to develop conflicts just like how it happened with Tether. I think crypto will be better without any government backed projects.

It depends. If you are in crypto from the beginning, you'll probably dislike government intervention from projects, I mean, who wouldn't.

But even though, we still need to admin that government intervention would be great for mainstream adoption of cryptocurrencies.

[mersal]

Anything called stable coins will not really attract the crypto users because people trusting the speculative nature of cryptos to make profits which is absolutely null in the backed cryptos so we are not going to use this in near future so any stable coins which will be launched will go unrecognized by most crypto players.

And more over backed up value is nothing but a lie told to us,if there is something real present which back up the value of that currency then their economy will not be in risker situation.

[btc_angela]

We have seen some of the assets backed crypto coins in the market on the way and do you guys think this will be the future as this is directly based on national assets like gold and other products like charcoal and energy based products.  This will help in growth of country's economy if not taken over by greedy corporatesand and and will it have government's support or soft corner in the regulator's eye as it will bring in some money from outside.

You get it wrong, we already have some project out there with assets backed up crypto, like Maduro's Petro, but what really to Venezuela right now? It's not the solution and it won't bring the needed money to help the countries economic woes. And remember that those projects are heavily tax by the government, so if you are a crypto enthusiast, are you going to invest on them or would rather stick to bitcoin?

[enhu]

Its been explained that its going to be hard to put value to the coin when the real asset lies somewhere else and the answer to the question of whether the real asset is real or not is uncertain. And when its proven real, how do you determine whether the team/developer are not making this project centralized?

The blockhain of this asset backed coin may not be centralize but the real asset like the gold reserves are. People somehow trusted this ZRCoin recently, its not going to end well. If the project ain't going to succeed in the production and sales, they are going to go back to the basics as to whether its truly decentralized.