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Royal Mint - Crypto Gold


C12

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Apologies if already posted but I'm interested to hear people's thoughts on the Royal Mint's potential digital crypto offering that's in the works. 

http://rmg.royalmint.com

There are quite a few other these in the pipeline with launches in 2018. What's interesting is that some are using a % of the transaction fees to purchase more physical gold to increase the bullion backing of the coins. 

Here's a list of other companies offering gold backed crypto currencies. 

http://www.goldscape.net/gold-blog/gold-backed-cryptocurrency/

What do people think on here? Is this something that will take off and bring fresh demand into the market? 

rmg.PNG

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Gold isn’t bulky enough for me to go digital. Unlike of cryptos if it is backed by physical it could succeed when other cryptos get shut down and classed as illegal. Still I would put all my gold eggs in this basket. 

Decus et tutamen (an ornament and a safeguard)

YouTube - https://www.youtube.com/channel/UC5OjxoCIsDbMgx7MM_l4CmA

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This certainly reflects some of the conversations I've had about crypto.

Bitcoin is interesting and a bit of a trailblazer, but has fundamental issues that make it ill suited as both cash and long term investment. Whereas applying the underlying block chain to financial services could well be worthwhile. Importantly, a block chain would guard against a single bar of gold being used multiple times/ways.

That said, the digital tokens can never be intrinsically linked. Like with Bananacoin, there's nothing to protect you if someone steals/eats your bananas.

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I like to hold all my bullion. I have a safety deposit box where I store a fair amount but it's not with a banking institution and I have access Monday - Saturdays. I don't trust banks. I trust the government a little more than banks but still not fully.

The offering from RMG is a much better offering than other cryptos. I'd be willing to accept RMG in trades and it's the sort of crypto that I could see being accepted by most.

 

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9 minutes ago, Nick said:

I like to hold all my bullion. I have a safety deposit box where I store a fair amount but it's not with a banking institution and I have access Monday - Saturdays. I don't trust banks. I trust the government a little more than banks but still not fully.

The offering from RMG is a much better offering than other cryptos. I'd be willing to accept RMG in trades and it's the sort of crypto that I could see being accepted by most.

 

I wonder how this offering will impact places like Goldmoney or Bullionvault since the fees are lower? That would seem to the the market space they'll be competing in. 

With Royal Mint being a UK government owned entity, I'm not sure if this is actually a good or a bad thing. 

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27 minutes ago, C12 said:

I wonder how this offering will impact places like Goldmoney or Bullionvault since the fees are lower? That would seem to the the market space they'll be competing in. 

With Royal Mint being a UK government owned entity, I'm not sure if this is actually a good or a bad thing. 

It seems to me that RMG would become the new and better way of owning vaulted gold. It would be easier to sell and you'd have no storage fees. I assume you could split it into subparts as you can with BTC which gives it the option of being used for everyday transactions. 

Isee it as a mini return to the gold standard which is something I would personally want to see. I hate fiat currencies and I hate fractional reserve banking. I understand the benefits of both to the economy but it all seems so false to me and allows governments to wrack up huge debts against future generations. The amount the government currently owes is mind boggling and I see no way out of it. Interest payments are crippling!

For me it wouldn't substitute owning physical gold however it could well make its way into my portfolio assuming the premiums weren't ridiculous and the premiums held fairly steady.

With regard to it being held by the royal mint. I personally have no issue with that. I'm not a doomsayer who thinks civilization will collapse tomorrow. If it does collapse there will be far more pressing issues than some gold being held in the royal mint vault.

As with all things; don't place all your eggs in one basket. Have a diversified portfolio. Keep some physical gold and silver so if civilization did collapse (or far more likely if the monetary system collapses) then you have some means of trade.

With blockchains you are far more likely to loose your asset from hacking or a complete meltdown of the internet than you are the royal mint stealing it.

If Russia cuts those internet lines then cryptos won't do you much good. Not until the lines are restored anyway. 

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3 hours ago, MancunianStacker said:

Gold isn’t bulky enough for me to go digital. Unlike of cryptos if it is backed by physical it could succeed when other cryptos get shut down and classed as illegal. Still I would put all my gold eggs in this basket. 

Can't really class them as illegal because of no backing. Otherwise you would need to do that with every fiat currency as governments don't back they're currencies either except with the words " trust me "

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39 minutes ago, airmac said:

..........governments don't back they're currencies either except with the words " trust me "

Plus the requirement that all taxes must be paid in said currency.  Here in the UK, one can only pay one's taxes with £Sterling - not Bitcoin, €, $, gold, silver, marshmallows, etc - which gives £Sterling value (to we residents); we have to acquire it or we go to jail ?

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1 hour ago, reidpj said:

Plus the requirement that all taxes must be paid in said currency.  Here in the UK, one can only pay one's taxes with £Sterling - not Bitcoin, €, $, gold, silver, marshmallows, etc - which gives £Sterling value (to we residents); we have to acquire it or we go to jail ?

And still no backing it except " trust me"

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46 minutes ago, airmac said:

And still no backing it except " trust me"

Why does £Sterling need any backing ('trust') here in the UK?   It has 'worth'; UK taxpayers need to acquire it in order to to pay their UK tax obligations. £1 Sterling is, and always has been, 'worth' £1 Sterling - no more, no less.

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2 minutes ago, reidpj said:

Why does £Sterling need any backing ('trust') here in the UK?   It has 'worth'; UK taxpayers need to acquire it in order to to pay their UK tax obligations. £1 Sterling is, and always has been, 'worth' £1 Sterling - no more, no less.

It erodes with time as they print more money. Yes £1 sterling is always worth £1 sterling but what you can buy with £1 sterling becomes less and less as the government prints more and more of it.

It doesn't 'need' backing but if it were backed by something then it would stop the government simply printing more. They'd have to buy more of the underlying commodity before printing more money (be it salt, chocolate beans, coffee, gold or silver etc).

Sterling has far more worth than BTC etc though because as you say it is needed by people to pay tax obligations and bills and so it will always have some value. BTC can drop to nothing as nobody needs it.

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17 minutes ago, Nick said:

It erodes with time as they print more money. Yes £1 sterling is always worth £1 sterling but what you can buy with £1 sterling becomes less and less as the government prints more and more of it.

It doesn't 'need' backing but if it were backed by something then it would stop the government simply printing more. They'd have to buy more of the underlying commodity before printing more money (be it salt, chocolate beans, coffee, gold or silver etc).

Sterling has far more worth than BTC etc though because as you say it is needed by people to pay tax obligations and bills and so it will always have some value. BTC can drop to nothing as nobody needs it.

The UK Government has handy tools (taxation and 'borrowing ') that it uses to destroy the currency created by it's Spending.  If the Government decides (for whatever reason) not to destroy all of the created currency (extra currency is needed to allow the economy to grow, etc.) then inflation may result (not a given as it depends on resource availability).  Fiat currencies (every currency that exists today) does not, by it's very nature, need backing - there are reasons that certain governments, at certain times, decide to back their currency (e.g. China attempting to back the 'Petro Yuan' with gold), but they are the exception rather than the rule - for the time being.......

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RMG looks like a marketing ploy to repackage the RM Signature service.capitalising the popularity of cryptos.  The only difference and advantage I see is there apparently isn't any storage fees.  This maybe because there is no actual gold being held.  After all its in partnership with CME and they note redeeming gold held will incur fees for fabrication and delivery. 

Generally I dont see the point of physical asset backed cryptos, as its contradiction and potentially deceitful.  You must trust the the organisation is really holding the assets claimed to be on the blockchain, when the whole point of cryptocurrencies is to remove trust in other party and onto the maths of cryptography.  I wouldn't accuse the RMG scheme of being dishonest but there is a lot of scope for asset backed crypto to be fraudulent.  If you trust the issuing entity (such as RM or CME) you may hold a regular contract with them. 

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