We say, "If you can't hold it, you don't own it."
Thursday, July 17, 2014
The Truth About "Gold Backed" Cryptocurrencies
Newnote Financial Corp. is pleased to announce the successful development and launch of the first open-source gold-backed alternative crypto-currency, commissioned by Anthem Vault Inc. Business Wire
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NoFiatCoin says that only a 1/3rd of XNFs are backed by bullion and that the market will determine the price for an XNF. To me, this doesn't make much sense. This means an XNF does not represent a fixed weight of gold. Further, NoFiatCoin says redemption of XNFs for bullion requires a minimum of $3000 worth of XNFs at current market prices.If XNFs were actually a "gold backed" currency, each XNF would have to represent a fixed unit of weight. For example, they could set an XNF to be worth .001 ounces of gold, and if you saved up 1000 XNFs, then you could always exchange them with NoFiatCoin for an ounce of bullion. Of course, under this system, it would be impossible to have a fixed limit of currency creation, and there would have to be a way to take XNFs out of circulation once they were redeemed for physical specie.