There are a number of Gold Backed Cryptocurrencies out there and my personal belief is that these are likely to become the Future of Money once the current Fiat system finally dies. However, there are now various other commodity backed cryptos and I’ve been wondering if Silver might be a legitimate backing for crypto. Silver is a Monetary Metal and it has more industrial use than Gold, but it’s also more volatile. Both Gold and Silver Crypto would be equally Fungible so is there really a case for using Silver Backed Crypto over Gold?
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I’ve been having a look around to see if I can find anything viable and I did find KAG on CoinMarketCap which is a Silver Backed Crypto launched by a company called Kinesis. It’s Market Capitalization is over $83 million which is not small, but it’s only enough to give it a rank of #4219 on CoinMarketCap so it’s not exactly big either. I did also find SLVT (short for Silver Token) which is an ERC-20 token on Ethereum but they aren’t properly listed on CoinMarketCap and look a little immature / risky.
Is it just early days or is Silver Backed Crypto likely to be a non-starter? We love our Silver here at Silver Gold Stackers but is the prospect of digital silver appealing to physical silver stackers at all? Of course I’d expect to be able to convert any Digital Silver to (or from) Physical Silver but do the extra weights and storage expenses involved make conversions an unattractive and unlikely option? I’m very curious about this so if you have any experience with, or opinions on Silver Backed Crypto I’d be very interested to hear.
Current paper and virtual money also began as gold and silver currency. For a while it was possible to freely exchange banknotes for precious metal coins. After that, the connection between fiat currency and silver and gold began to disappear. Where is the guarantee that digital money will not break away from its silver and gold essence? In laws? Is not it too little?
This is a very good point. Even if we move to gold or silver backed crypto there is no guarantee it won't break away again in the distant future. Human nature is very cyclical and too easily people forget the mistakes of history.
I am a teacher of history...😀
Personally I’m not a fan of any of these. They all need full be fully centralized as there is third party risk (where the metals are held). Many of these projects hold them at government linked mints and it just defeats entire purpose. I suppose for transactions there might be a use case but to me I’m staying far away from this high risk idea.
I don’t know about silver or even gold back crypto. It seems to me like the ETF paper contracts to me. I’d stay away from them.
Worse! Yea it’s all third party centralized. Worst part is many of these projects hold the metals at government mints 😂
This is a total no go for me.
I found a KBC Karatgold Coin a digital version of this note with 0.1g gold.
https://peakd.com/hive-167922/@kerrislravenhill/piratesunday-pirate-captain-harald-seiz-of-karatbars
It's like the slightly better new version of the current paper market as far as I am concerned, I think physical is the only right way to stack
It’s worse actually.
We have one of those right here on Hive. It's called PIMP ya !PIMP :D
PIMP owns some silver, but unless there is enough silver there to cover the market cap of the token then you can't really call it "backed". It's fractional reserve at best?
Yeah you're right, I got excited though. I know they are growing the reserve but yeah, it's only a small fraction at this point. I do like the direction though.
I can't imagine a crypto fully backed by physical metals these days. I guess I would just have a hard time believing it. Sadly I guess I'm that jaded.
Who the heck holds it? 😂
I wouldn’t advertise this as holding anything. Third party risk for physical is anti everything decentralized crypto is meant for. This model is moronic.
It’s a cool idea but just can’t work ever. You need physical storage and that can’t be trusted by a third party without huge risk.
Exactly the reason it'll never happen :D
You must be killin' it out here!
@summertooth just slapped you with 1.000 PIMP, @buggedout.
You earned 1.000 PIMP for the strong hand.
They're getting a workout and slapped 1/3 possible people today.
Read about some PIMP Shit or Look for the PIMP District
Who or what will be holding the Physical Silver...???
Any crypto that is backed will involve a counterparty of some sort.
It's an interesting proposition for sure. There's been some fraud in the metals industry lately, particularly in the physical space. I'm not sure if crypto will be able to solve that problem because unless some draconian measures are put in place, fraudsters will find a way to scam.
Crypto can't solve those problems, no. It can solve the portability and divisibility issues of precious metals though...and those were the biggest excuses used to justify abandoning it as formal money in recent history.
It all comes down to trusting a third party to store it. At least registered mainstream ETF’s there’s insurance to get a tiny bit of value back. With these I’d run away my friend.
There are some gold as well… but like bitcoinman said … it is safer to get the real one even if you store in a bank lol
😉😎👍 that is a great idea! I hope it gets implemented soon..
I gotta respectfully disagree. Its just trusting a third party to hold the physical metal. It’s high risk and sounds bad 2 me.
yes, that's true. It's always better to Hold the real asset. but maybe as one little part of a portfolio of assets? (sorta like owning stocks..)
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I think gradually the physical edition is going out of hand
Having a market cap of 83 million $, itself says a lot about the company. Kinesis is going to do good in the future.
Well, how do you usually get to know the real silver and not the fake one?
You have actually done this, but the way we see it now is that of silver because people are very interested in it and we will see that in the next few years we will Its price will be seen to go higher and it is time to wait for some time to invest in such things.