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Author Topic: What world currencies are actually backed by gold?  (Read 1887 times)
PHPAdam
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April 25, 2011, 12:56:40 PM
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http://answers.yahoo.com/question/index?qid=20080827115251AAYDgdW
Q: What world currencies are actually backed by gold?
A: None

Im no economist, but what would it take for bitcoins to be "backed by gold"?

Possible, Plausible or Impossible?
I see two possibilities either a wealthy person puts up some gold to back the whole currency, or a bitcoin wallet provider purchases gold and its customers wallets are backed by the gold standard.


P.S. I have no gold. Just thinking out loud.
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FatherMcGruder
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April 25, 2011, 01:02:04 PM
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You can just exchange gold and bitcoins at whatever rate you specify.

Use my Trade Hill referral code: TH-R11519

Check out bitcoinity.org and Ripple.

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PHPAdam
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April 25, 2011, 01:05:51 PM
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I think theirs a difference between "backed by gold" and exchangeable for gold.
FatherMcGruder
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April 25, 2011, 01:12:26 PM
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But that's what governments did. They specified exchange rates and expected people to believe that they held as much gold as the currency in circulation represented.

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hazek
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April 25, 2011, 03:52:31 PM
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Although almost every if not every central bank has some gold reserves but not one fiat currency on the whole planet is backed by gold anymore. The last was the Swiss Franc which was backed 40% by gold up until 2000 where they had a referendum and the people voted to go off of it.

So what we have now is a global monetary system of monopoly money backed up by mostly what countries produce and how powerful of an army they have while all the population is getting robbed left and right through artificial low interest rates.

My personality type: INTJ - please forgive my weaknesses (Not naturally in tune with others feelings; may be insensitive at times, tend to respond to conflict with logic and reason, tend to believe I'm always right)

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April 25, 2011, 04:04:02 PM
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http://answers.yahoo.com/question/index?qid=20080827115251AAYDgdW
Q: What world currencies are actually backed by gold?
A: None

Im no economist, but what would it take for bitcoins to be "backed by gold"?

Possible, Plausible or Impossible?
I see two possibilities either a wealthy person puts up some gold to back the whole currency, or a bitcoin wallet provider purchases gold and its customers wallets are backed by the gold standard.


P.S. I have no gold. Just thinking out loud.

You are asking the wrong question. Gold didn't back money, gold was the money. And when people started to warehouse it in bank vaults they got receipt which they started trading as if it was gold itself. Later governments through laws and enforcement through force established a monopoly on these paper receipts, gave them names and proclaimed how much weight is represented with a certain number. For instance in the beginning of the 19th century $20 was redeemable for 1oz of gold.

So the phrase "backed by gold" was miss-used ever since the governments grabbed the monopoly on money. The last country where this happened was the USA in 1913 when the FED was created. Before the FED dollars were basically although government issued receipts for gold. But with the FED it soon changed to legal tender which it is today.


Basically the important point to take away from post is that gold is money. And that paper money was just suppose to have made it's trade easier. So when you're looking at BitCoins you cannot have it "backed by gold" because they are two different commodities and the most that you can have is open free trade between the two. Eventually I suspect will get to a very stable and constant price of gold in BitCoins and vice versa.

My personality type: INTJ - please forgive my weaknesses (Not naturally in tune with others feelings; may be insensitive at times, tend to respond to conflict with logic and reason, tend to believe I'm always right)

If however you enjoyed my post: 15j781DjuJeVsZgYbDVt2NZsGrWKRWFHpp
tomcollins
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April 25, 2011, 04:09:31 PM
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http://answers.yahoo.com/question/index?qid=20080827115251AAYDgdW
Q: What world currencies are actually backed by gold?
A: None

Im no economist, but what would it take for bitcoins to be "backed by gold"?

Possible, Plausible or Impossible?
I see two possibilities either a wealthy person puts up some gold to back the whole currency, or a bitcoin wallet provider purchases gold and its customers wallets are backed by the gold standard.


P.S. I have no gold. Just thinking out loud.

You need a warehouse with 21 million units of gold.  You pick the units.  You then say you will redeem 1 BTC for each unit.  You need to somehow be bound at this rate.  Now it's backed by gold.

It would be silly of you to do this.  If 1 BTC ever was worth less than the gold, you'd be the proud owner of a ton of bitcoins and be out a lot of gold.  If it became more, people would bring you gold and want bitcoins.

Pegging one currency to the other always results in one hoarding the more valueable one and redeeming it for the less valued one.
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