Gold and silver backed digital currency (Lode.One)

[tpuffer]

I know there are some precious metals and bitcoin fans here on the forum. Have any of you guys come across this yet -

https://lode.one

It's a digital coin backed by physical metals using blockchain.

Definitely an interesting concept. Would anyone consider using something like this that has something tangible backing the value of the coin?

(Note that I have no affiliation to this company)

 

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[MJ DeMarco]

Sounds really interesting, definitely is addressing a global market concern.

 

[tpuffer]

Right. And its actually backed by a hard asset and verified via blockchain.

Seems like it could be viable alternative to fiat currencies.

 

[Kak]

I know there are some precious metals and bitcoin fans here on the forum. Have any of you guys come across this yet -

https://lode.one

It's a digital coin backed by physical metals using blockchain.

Definitely an interesting concept. Would anyone consider using something like this that has something tangible backing the value of the coin?

(Note that I have no affiliation to this company)

In theory it is awesome, in practice, there is only one thing wrong with it.

With crypto, the human element of manipulation is completely removed.

With gold, the human element of manipulation is completely removed.

With either of these products, you are only going to mine as fast as the market deems a good idea. Think about it, why isn't there 10x as many gold mines in the world? Because the market for gold mining operations is at an equilibrium. Why also isn't every bitcoin already mined by a data center the size of India? Because the market for bitcoin mining operations is at an equilibrium.

They are both VERY different in how they achieve a relative constant (bitcoin will, in theory, stabilize at some point). I do not however understand EXACTLY how bitcoin and other cryptos do this. I don't have that programmer mind or the desire to add that skillset. I do trust the programmer Austrians though that it is indeed secure from such bs.

The only problem comes when you try to put the two of them together. It just becomes kind of a gold trust at that point. The expense of buying, storing and insuring the gold that represents the crypto money supply will be an inefficiency that costs something over time. This means employees, administrative costs, a ceo, a building for them to all show up at etc... If we want to use this as a means of exchange, we are paying for them. How much? They get to decide, until they have competition.

The problem is the people themselves... Between the crypto token and the physical gold, there will have to be people. Decisions to add more coins and therefore more gold to reserves will have to be on people. While it might start out awesome AF... One day they could decide to "change the deal." That exposure is what will probably doom it as a widespread currency.

Overall, a pretty cool thing though and I expect gold to be electronically trade-able in some form or fashion in the not so distant future. This might be a great tool for many of us that like to own gold. Will any of these systems actually replace state currency? I personally doubt it. Maybe some micronations or seasteads will pick it up.

Basically, people can't be trusted. Gold and fiat cryptos both remove the human element. Putting them together adds humans back in...

Keep in mind, I own gold in ETFs which have people at the helm. Competition has been good for the expense ratios... But I don't view it as a means of exchange, just a convenient way to invest.

How is the LODE Project governed?

The governance of the LODE System will be set up in three phases to ensure the project’s mandate is met with the intention that the LODE Community ultimately governs the entire system.

Phase 1 – The system is managed by Interfix on behalf of the LODE Community. LODE Service Providers are developing the system architecture to ensure enterprise-level readiness for market release. This protocol maximizes efficiency and reduces the time required for upgrades.

Phase 2 – Once the LODE Community and the Service Providers Alliance are running the system, the LODE Project will begin relying on the expertise of Service Providers and Community Ambassadors to make decisions on behalf of the community. Interfix will continue to guide the project but decisions will be increasingly based on input from the LODE Community.

Phase 3 – The third phase of governance will pass control entirely to the LODE Community. With LODE Tokens being the governance token, LODE Token Holders wishing to participate in the governance of the LODE Community will be given voting and decision-making rights. It is expected that almost everything will be done by community vote.

 

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[tpuffer]

Think about it, why isn't there 10x as many gold mines in the world?

It's also expensive and a LONG process to get an actual mine approved.

The problem is the people themselves...

This explains the Matrix...

Basically, people can't be trusted. Gold and fiat cryptos both remove the human element. Putting them together adds humans back in...

Keep in mind, I own gold in ETFs which have people at the helm. Competition has been good for the expense ratios... But I don't view it as a means of exchange, just a convenient way to invest.

Agreed. We could run into the same issue we have now with currency manipulation.

I've thought about investing in a few ETFs. I have some physical currently, but the ETF could be a good diversification add for sure.

 

[Kak]

It's also expensive and a LONG process to get an actual mine approved.



This explains the Matrix...



Agreed. We could run into the same issue we have now with currency manipulation.

I've thought about investing in a few ETFs. I have some physical currently, but the ETF could be a good diversification add for sure.

The gold ETFs are cool, but you get leveraged exposure if you go with GDX or GDXJ. Think about it this way...

Let's say, just for the sake of whole numbers, it costs $1000 per ounce to pull gold out of the ground...

If the wholesale price of gold to the mint is $1500 they are making $500 per ounce profit on their typical operations...

If the wholesale price of gold goes up to $2500, which is something that I personally believe will happen within the next 12 months... Their profitability is now $1500 per ounce. Their earnings on the same operations are 3x more profitable than they were... That, coupled with a likely higher P/E ratio is a recipe for ridiculous stock growth. Of course, the same is true if the price of gold goes down.

For a pure gold ETF, I like OUNZ because you can redeem it in physical gold if you desire and it isn't a taxable event.

 

[socaldude]

It’s not what backs the money it’s who controls the quantity. Although it does sound cool and interesting, I think it’s a bad idea.

The problem with gold is that it’s heavily monopolized and manipulated. A lot of it is controlled by big institutions. It opens up a big can of worms as more crypto needs to be added to the quantity. Kind of like Milton Friedman’s k-percent rule. It really serves as a headwind towards independence from big institutions and central banks.

We’re trying to get rid of visa and MasterCard, and central banks and governments. Not be more aligned with them bro lol. The idea is to make our own fiat money.

 

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[GoodluckChuck]

Anything backed by something real is better than fiat in ways of wealth preservation but the prices of metals are still being manipulated by derivatives so the crypto is too by association.

The value of anything is determined by the willingness of someone else to pay for it. I guess the value of a crypto like this depends on what one intends to use it for.

Are you holding it to hedge against devaluing currencies? Are you using it as a means to trade for goods and services? Are you holding your crypto on a device you hold in your hand or is it in a bank somewhere?

 

[csalvato]

One thing not mentioned here is the danger of fractional reserves.

Most "backed" cryptos are held in a fractional reserve, which means they may represent the value of, say, 1000 lbs of gold, but they aren't actually holding that much gold in reserve.

Most of these backed-cryptos (including USDC, Tether, PAX, etc.) are not truly backed, so it's a bit of smoke and mirrors that can cause a crash.

 

[Beebop27]

I know there are some precious metals and bitcoin fans here on the forum. Have any of you guys come across this yet -

https://lode.one

It's a digital coin backed by physical metals using blockchain.

Definitely an interesting concept. Would anyone consider using something like this that has something tangible backing the value of the coin?

(Note that I have no affiliation to this company)

Dude,

This thing has scam written all over it.

Firstly... who are the developers? Where are their profiles. Any new crypto currency project should have a clear road map and paper for their project, listing all developers (and their experience with LinkedIn profile CV too), and milestones. I see none.

Secondly the concept is an oxymoron.

Gold and silver is backed by centralized banking system, where the core basis of cryptocurrency is that it is decentralized. This is one of its biggest challenges when crossing over to the main stream.

Be very careful about advising new crypto projects. The entire market is like the wild west, and there is so much b.s, fomo and fud out there.

95% of these crypto projects will die, with the small few that succeed, will boom.

 

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[tpuffer]

We’re trying to get rid of visa and MasterCard, and central banks and governments. Not be more aligned with them bro lol.

Haha - I definitely agree with that. We need to dig Andrew Jackson up so he can come kick some central bank a$$ again!

Are you holding it to hedge against devaluing currencies? Are you using it as a means to trade for goods and services? Are you holding your crypto on a device you hold in your hand or is it in a bank somewhere?

Good questions. The thought would be to try and have something for a hedge and to use potentially. It's definitely tough given how many digital coins there are out there.

Dude,

This thing has scam written all over it.

Firstly... who are the developers? Where are their profiles. Any new crypto currency project should have a clear road map and paper for their project, listing all developers (and their experience with LinkedIn profile CV too), and milestones. I see none.

The US dollar is a scam already! Haha. But at least with the USD we know who the scam artists are.

I agree - Being able to see who is behind the project would go a long way toward its legitimacy.

 

[Speculatooor]

Why still go after gold when there is bitcoin?

Someone in this thread said that there is no human manipulation of gold, but there are tons of stories about fake gold.

Wuhan company now at the center of one of the biggest fake gold scandals

According to multiple industry reports published this week, the Wuhan-based and NASDAQ-listed Kingold Jewelry allegedly issued 83 tonnes of fake gold – valued at $4.2 billion and the equivalent to 22 percent of the country's gold – as collateral to attain loans from at least 14 Chinese money...

www.foxnews.com

 

[tpuffer]

Why still go after gold when there is bitcoin?

Someone in this thread said that there is no human manipulation of gold, but there are tons of stories about fake gold.

Wuhan company now at the center of one of the biggest fake gold scandals

According to multiple industry reports published this week, the Wuhan-based and NASDAQ-listed Kingold Jewelry allegedly issued 83 tonnes of fake gold – valued at $4.2 billion and the equivalent to 22 percent of the country's gold – as collateral to attain loans from at least 14 Chinese money...

www.foxnews.com

Not sure there is any one "right" currency right now unfortunately. It seems to me that Bitcoin, and any digital currency apparatus could be subject to manipulation - not only by individuals, but governments as well.

Why not have a bit of both Gold/silver and Bitcoin. Gives someone the thousands of year track record of gold/silver as money and currency as well as something in the form of a digital currency.

There are ways to verify real gold and silver. It definitely has its place even with the manipulation.

 

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[Kid]

Anything crypto is just stupid speculation at the moment.
All people that think they invest actually just gamble.
You might win some. Most of the times you'll lose more.

Most of these backed-cryptos (including USDC, Tether, PAX, etc.) are not truly backed, so it's a bit of smoke and mirrors that can cause a crash.

There was one crypto backed i think by the dollar in not exactly 1:1 ratio.
People panicked,started selling and there happen to be not enough for everyone
so they were selling for 10% of value.

 

[socaldude]

Haha - I definitely agree with that. We need to dig Andrew Jackson up so he can come kick some central bank a$$ again!

Haha Money Masters, 1996?

That’s why Bill Still made that documentary because there is no gold at Fort Knox, they sold it all for like $30/ounce. We all got jacked LOL. That’s why they don’t say anything and there has been no public audit.

You guys didn’t watch James Bond, Goldfinger?

He is the real deal. He was a presidential candidate in 2012.

 

[csalvato]

There was one crypto backed i think by the dollar in not exactly 1:1 ratio.
People panicked,started to selling and there happen to be not enough for everyone
so they were selling for 10% of value.

Exactly

 

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[MJ DeMarco]

This thing has scam written all over it.

Generally speaking, I think lot of crpyto's are scams. Just look at the SEC website for indictments, lots of them are cyrpto based, so of course, your view could be accurate.

Furthermore, anytime an investment is complicated which crypto naturally is, it provides the sketchy groundwork to scam others based on "smoke and mirrors" -- snazzy copy, great story background, etc.

Reminds me of this old thread...

GOLD! - INVESTING - How many of you idiots want to give me money?

DISCLAIMER: Thread title is done for conversion/reading purposes -- I don't mean to offend my forum regulars -- this is for the folks who don't get it, and continually look for the path to "Easy money"... So with that said... ----- MY BIG ANNOUCEMENT!!! I'm happy to announce that I am the...

www.thefastlaneforum.com

 

[socaldude]

Here is another thing to think about: what about the carrying cost and illiquidity of all of this? Who bares the cost of all this?

 

[tpuffer]

Here is another thing to think about: what about the carrying cost and illiquidity of all of this? Who bares the cost of all this?

Good point. My guess is that there would be a certain % taken from each person whom has "coins". Right now this sounds no good. But, we will probably be seeing negative rates for deposit accounts at banks at some point. So this wouldn't be as odd at that point.

 

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[Beebop27]

Generally speaking, I think lot of crpyto's are scams. Just look at the SEC website for indictments, lots of them are cyrpto based, so of course, your view could be accurate.

Furthermore, anytime an investment is complicated which crypto naturally is, it provides the sketchy groundwork to scam others based on "smoke and mirrors" -- snazzy copy, great story background, etc.

Reminds me of this old thread...

GOLD! - INVESTING - How many of you idiots want to give me money?

DISCLAIMER: Thread title is done for conversion/reading purposes -- I don't mean to offend my forum regulars -- this is for the folks who don't get it, and continually look for the path to "Easy money"... So with that said... ----- MY BIG ANNOUCEMENT!!! I'm happy to announce that I am the...

www.thefastlaneforum.com

Hi MJ,

It's an honour for you to reply. Thanks.

The main thing with crypto is that it is completely unregulated. It is the wild west, and anyone can create a nice logo and call it something catchy, create a fake white paper and gain millions of dollars from investors to create the new "coin". Once they get the money, there is no external body to regulate the business's operations and objectives, so you get a bunch of 20 year old kids with millions of dollars of capital, with it just fizzling out and investors are pretty much fkt because the whole thing is unregulated and there is no one they can turn to, to get their money back.

That $10k you just invested into "zee-bee coin", is gone. The project is dead. Who are you going to cry to? No one. Because its the unregulated wild west.

Heres an article

The cryptocurrency sector is overflowing with dead projects

The main problem typical for the entire crypto industry is a focus not on the usefulness of products, but solely on the blockchain technology.

cointelegraph.com

and an entire site dedicated to showing scam / dead coins:

https://deadcoins.com/

I have also lost money in some of these projects, but knew that was the risk.

One of the biggest things holding crypto back is mainstream adoption. How can it be used in the real world? There are very few examples of this, and one of the main things that hold it back is the whole conundrum of decentralisation. How can you have a centralised / decentralised system? The entire thing is an oxymoron.

But going off topic a bit, there are bigger forces at play. Geopolitics 101. Having a currency backed by a centralised system / government does have its benefits. It gives world powers the ability to enforce sanctions and tarifs on other countries and in effect.. make sure countries "behave". It is a means to create global stability.

You guys want to build a nuke and threaten neighboring countries, no problem, we will cripple your economy through sanctions until you behave.

It will be interesting to see what happens. The great Milton Friedman predicts it will happen, and I think he is right. It will be an inevitable destination, but how it plays out will also be interesting.

View: https://www.youtube.com/watch?v=6MnQJFEVY7s

 

[socaldude]

The main thing with crypto is that it is completely unregulated

A big problem is that a lot of crypto goes through an exchange that is basically in some dudes basement. They are basically the exchange, broker and clearing firm. Totally different if I buy a stock.

How can you have a centralised / decentralised system

It’s because people don’t understand monetary history or policy. It’s all about who controls the quantity and how it gets allocated.

 

[Beebop27]

A big problem is that a lot of crypto goes through an exchange that is basically in some dudes basement. They are basically the exchange, broker and clearing firm. Totally different if I buy a stock.



It’s because people don’t understand monetary history or policy. It’s all about who controls the quantity and how it gets allocated.

Hi Socaldude,

I am still trying to figure out the reply system here and quotation thing.

What I mean is that we have a centralised monetary system. And there are arguments for and against it. For example, is it right to have "big brother" control it? Or should we abolish governing bodies, the govt, banks, US treasury and go decentralised cashless? How would this work?

The problem is that the answer is not black or white in my view. There are many other factors at play, especially on a global scale which are not considered. Specifically geopolitics and global security / sttability.

It is a big thing to consider, as in order for these crypto projects to boom, mainstream adoption must occur which is not happening right now. Which poses the question.. why isnt it happening? Is it just pure ignorance? Is it that big brother doesnt want to relinquish control over things? Or are there more larger factors at play?

What is now emerging are banks and other entities attempting to incorporate blockchain into their business model, which is against the core values and meaning of blockchain ... which is decentralisation. The elimination of governing bodies.

It will be interesting to watch it evolve, but it will in my view take at least 5 to 10 years to see any signficant change in mainstream.

 

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[socaldude]

What I mean is that we have a centralised monetary system. And there are arguments for and against it. For example, is it right to have "big brother" control it? Or should we abolish governing bodies, the govt, banks, US treasury and go decentralised cashless? How would this work?

Well, here’s what I think. My two pennies.

Monetary Centralization works.

But, only if certain criteria and assumptions are met.

Money and Money creation is a claim on infrastructure and human utility. This represents almost absolute power and control. The problem is, and as seen all throughout history, certain corrupt, untrustworthy and self-interested people have gotten their hands on it.

This model allows the governments and private institutions to get their hands on as much money as they want with taxpayers footing the bill in inflation and taxes. No due process, no checks and balances, no nothing.

Put the two together and you get a government that almost always lies, always wants more money and institutions that always puts their shareholders first before the greater good. The crappy hyper-stagflation economy we have today is a direct result of over-screwing the system.

So yes, I agree with a lot of economists that say centralization helps and streamlines our economy. But these people forget that in the real world certain assumptions don’t pan out.

Just look at the federal reserve. Sure the fiat money system works. People accept it no problemo. The only problem is, is that it’s a clever scam system set up in a way to hide, deceive and deflect transparency and intentions. The money is created out of nothing and allocated according to the interests of a very small group. Like when banks buy back shares with money from the Fed as Repo collateral.

 

[Beebop27]

Well, here’s what I think. My two pennies.

Monetary Centralization works.

But, only if certain criteria and assumptions are met.

Money and Money creation is a claim on infrastructure and human utility. This represents almost absolute power and control. The problem is, and as seen all throughout history, certain corrupt, untrustworthy and self-interested people have gotten their hands on it.

This model allows the governments and private institutions to get their hands on as much money as they want with taxpayers footing the bill in inflation and taxes. No due process, no checks and balances, no nothing.

Put the two together and you get a government that almost always lies, always wants more money and institutions that always puts their shareholders first before the greater good. The crappy hyper-stagflation economy we have today is a direct result of over-screwing the system.

So yes, I agree with a lot of economists that say centralization helps and streamlines our economy. But these people forget that in the real world certain assumptions don’t pan out.

Just look at the federal reserve. Sure the fiat money system works. People accept it no problemo. The only problem is, is that it’s a clever scam system set up in a way to hide, deceive and deflect transparency and intentions. The money is created out of nothing and allocated according to the interests of a very small group. Like when banks buy back shares with money from the Fed as Repo collateral.

This topic is too complex and long for this initial thread.

With all due respect, I humbly think it is too simplistic to say that govt always lies, the system is a scam, etc.

Yes, there have been assholes in power. Yes, sometimes (and in some countries.. most often) the system F*cks over minorities and disadvantaged, yes, people can hide behind loopholes, etc (ie Enron)., but assertions like "money is created out of nothing an allocated to the interests of a small group", is in my view not looking at the big picture.

As Milton Friedman famously said, Capitalism is a monetary system. It is neither good or bad. Same as a building. Its not good or bad. And out of all the systems, it is the only one that has proven over time to allow people to prosper through a free market.

Those assholes with huge amounts of money, also provide jobs for the market. They need a secretary, or factory worker to manufacture their goods, etc.

Yes, there will always be dickheads and corruption in power, but there has been no system which is immune from this. Just look at Putin and his gangster regime. But the fiat system, while it has its flaws.. also has checks and measures in place too. It is in its interest and benefit to have them.

Money isnt just printed out of thin air. Its said inflation is the cancer of an economy, and is controlled by the Govt very carefully.

Anyway, this is such a complex topic / topics. Probably for another thread.

What interests me is how a decentralised currency will work in the real world. Some suggest a voting system which is written in the code might be the way, so a consensus must be reached.

Projects like Tezos have a model like this. Upgrades are proposed, and voted on, and once a consensus is formed, it is implemented.

What Is Cryptocurrency: 21st-Century Unicorn – Or The Money Of The Future?

Discover what is cryptocurrency and how it works. Dive into the pros and cons of investing in this exciting asset class.

blockgeeks.com

Time for a glass of milk and some UnO...

 

[Mark7071]

In theory it is awesome, in practice, there is only one thing wrong with it.

With crypto, the human element of manipulation is completely removed.

With gold, the human element of manipulation is completely removed.

With either of these products, you are only going to mine as fast as the market deems a good idea. Think about it, why isn't there 10x as many gold mines in the world? Because the market for gold mining operations is at an equilibrium. Why also isn't every bitcoin already mined by a data center the size of India? Because the market for bitcoin mining operations is at an equilibrium.

They are both VERY different in how they achieve a relative constant (bitcoin will, in theory, stabilize at some point). I do not however understand EXACTLY how bitcoin and other cryptos do this. I don't have that programmer mind or the desire to add that skillset. I do trust the programmer Austrians though that it is indeed secure from such bs.

The only problem comes when you try to put the two of them together. It just becomes kind of a gold trust at that point. The expense of buying, storing and insuring the gold that represents the crypto money supply will be an inefficiency that costs something over time. This means employees, administrative costs, a ceo, a building for them to all show up at etc... If we want to use this as a means of exchange, we are paying for them. How much? They get to decide, until they have competition.

The problem is the people themselves... Between the crypto token and the physical gold, there will have to be people. Decisions to add more coins and therefore more gold to reserves will have to be on people. While it might start out awesome AF... One day they could decide to "change the deal." That exposure is what will probably doom it as a widespread currency.

Overall, a pretty cool thing though and I expect gold to be electronically trade-able in some form or fashion in the not so distant future. This might be a great tool for many of us that like to own gold. Will any of these systems actually replace state currency? I personally doubt it. Maybe some micronations or seasteads will pick it up.

Basically, people can't be trusted. Gold and fiat cryptos both remove the human element. Putting them together adds humans back in...

Keep in mind, I own gold in ETFs which have people at the helm. Competition has been good for the expense ratios... But I don't view it as a means of exchange, just a convenient way to invest.

 

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[GoodluckChuck]

Sort of relevant... The other day, I created a selloff in Dogecoin on accident... It was trading up and down one evening a few weeks back and I would put a buy order in low, then when it triggered I would put in a sell order higher... I did this 4 times and was making about $100 each time. A fun way to pass the time while reading in the evening...

Then, I put in a sell order but I hit the wrong button. I sold way below the trading range and instantly dropped the price below all technical support indicators. In the following seconds and minutes there was a mini flash crash. I messed it all up!

I share this story as anecdotal evidence that the prices of anything can be manipulated. I see it every day in the stock market. Institutions are experts at moving prices in a way that will manipulate the retail traders into buying and selling. Big money has to do this because they trade with such volume that their actions move the prices a lot.

This happens in the metals markets all the time. JP Morgan has paid billions in fines for manipulating the silver market. They are the largest short seller in silver ETFs and just so happen to also have almost a billion oz of physical silver in their possession. If they are buying silver, what does that say for the rest of us?

J.P. Morgan settles lawsuit that accused firm of 'spoofing' precious metals markets trades

J.P. Morgan settled a suit accusing the bank of "spoofing" trades in the silver futures market. The suit was filed by hedge fund manager Daniel Shak and two commodity traders.

www.cnbc.com

 

[Glennw125]

I know there are some precious metals and bitcoin fans here on the forum. Have any of you guys come across this yet -

https://lode.one

It's a digital coin backed by physical metals using blockchain.

Definitely an interesting concept. Would anyone consider using something like this that has something tangible backing the value of the coin?

(Note that I have no affiliation to this company)

already been involved for 6 months so yes.