Are There Examples of Asset Backed Virtual Currencies?

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Here is a very natural idea: an entity creates a new virtual currency with the following properties:

Only that entity has the capability to issue new quantities of that currency That entity makes some type of legally binding promise to always buy and sell units of that currency at prices fixed to some underlying commodity. For example, it will always sell for 1.00 USD / unit and buy for 0.99 EUR/ unit. Transactions in the virtual currency are transacted in a Bitcoin-style network that is not centralized and not controlled by the issuer.

This is, of course, a very old and often implemented idea. Paper notes were originally issued and thought of as government backed, tradable IOUs. And gold-backed paper currency is pretty much what I've described here. This is the digital, virtualized variant of a very old idea.

This idea is alluded to here on the Contracts page in the BTC wiki. It's called EURcoins on that page.

My question:

Are there any existing or...

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Virtual currency, also known as virtual money, is a type of unregulated, digital money, which is issued and usually controlled by its developers, and used and accepted among the members of a specific virtual community. The Financial Crimes Enforcement Network (FinCEN), a bureau of the US Treasury, defined virtual currency in its guidance published in 2013. In 2014, the European Banking Authority defined virtual currency as "a digital representation of value that is neither issued by a central bank or a public authority, nor necessarily attached to a fiat currency, but is accepted by natural or legal persons as a means of payment and can be transferred, stored or traded electronically".

Definitions[edit]

In 2012, the European Central Bank defined virtual currency as "a type of unregulated, digital money, which is issued and usually controlled by its developers, and used and accepted among the members of a specific virtual community".[1]:13

In 2013, Financial...

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This is an extraordinarily difficult question to answer due to the ambiguous nature of the term "complementary currency," which can include dual currency systems, community currencies, alternative virtual currencies, etc. Also, you have the added problem of whether the currency of a nation-state should be considered a "complementary currency" when it exists in addition to the Euro or other "meta-state currencies" (i.e. the HK dollar).

Generally noted, the most long-standing and "successful" complementary currency in existence is the Swiss WIR, which has existed for 75+ years and currently does $6.7 billion in transaction volume per annum with a total of $3.1 billion in assets. This independent community currency is primarily used among the agricultural sector. A similar but smaller example exists in Bavaria, the Chiemgauer $700,000, which does about $6M annual transaction (source wikipedia, 2011, Chiemgauer). American variants also exist, such as the most prominent example,...

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Uses of Virtual Currencies

Useful for online transactions but does not limit the user to just the online environment. Allows the user to buy real goods and services online. For instant payments anywhere around the world.

Examples of Virtual Currencies

Bitcoin Litecoin Ripple Ethereum

Bitcoin is the trendsetter among the other virtual currencies in existence. It has been used widely as an enterprise solution. The main reason why it became so popular is because of its very low transaction fee – at less than a cent. Some companies and entrepreneurs, especially those who have employees working remotely, prefer to use this over Paypal or other online paying channels because it is low-cost, fast, and efficient.

Advantages

The Blockchain technology, pioneered by Bitcoin, is a system that allows for an efficient international financial integration. Virtual Currencies are the first global currencies that allow for instant processing of payments worldwide. No need...
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Carl Freer: digital currency – what you need to know

As things get disrupted within the financial world with new tech, it’s no surprise that the way we use currency is being affected as well. In February this year, Numerai – a new kind of hedge fund built by a network of data scientists – started issuing a new digital currency. Its aim? To turn Wall Street into a place where everyone’s on the same team.

From Bitcoins to even newer (and lesser known, but rising) forms of currency, will this level the playing field for people in the future, or is this all just a sham that will die down? As things get digitised, what do we need to know about digital currencies, and does this mark the demise of traditional forms of currencies?

What you need to know

To help you navigate in the world of digital and cryptocurrencies, here is a quick list of important points you need to know:

Not all currencies were created equal

Beyond the obvious in regards to value,...

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DEFINITION of 'Closed Virtual Currency'

An unregulated digital currency that is used as payment only within certain virtual communities. A Closed Virtual Currency has no connection to the real economy and cannot be converted to legal tender. Think of closed virtual currency as closed loop payment cards like the Nordstrom store credit card that can only be used in Nordstrom.

Also called Non-Convertible Virtual Currency, Closed Loop Currency, Closed-Flow Virtual Currency and In-World Money.

BREAKING DOWN 'Closed Virtual Currency'

Technology advancements all over the globe are driving disrupting changes in the traditional way of doing things including the way goods and services are acquired and paid for. The rise of e-commerce and virtual community platforms has led to a demand for alternative means of conducting transactions. One rapidly evolving payments technology that is making waves in the digital world is virtual currency. Virtual currency is a type...

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Dearest Earth family, I feel your call to me to give you more information and reassurance about the process of change that is unfolding now. Some of you are feeling upset because the blessings you have been promised seem to have stalled or disappeared. Some are angry and feeling betrayed that you cannot see or touch the evidence that what we have told you is true.

I promise you, Beloved Ones, that the great evolution we have described to you is genuinely underway. The first domino, as we have called it, has fallen, and others are tumbling into place, but the image would appear to you as if in slow-motion. Nevertheless, all the world is tumbling into the Light. The first Prosperity Packages have been distributed. This alone will create massive change in short order. It has not been announced to the world for two reasons: 1) the mass media is trying to keep it quiet to maintain their false pretense of power, and 2) we are actively protecting the brave boots on the ground who...

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Tokens used as

money

in a

country

. In

addition

to the

metal

coins and

paperbank

notes, modern currency also includes checks drawn on bank

accounts

, money orders, travelers checks, and will soon include

electronic money

or

digital cash

.


Types of Currency

What gives currency its value? Depending on the

type

of money, there are many different ways that

value

is assigned and handled. These are the types of currency.

Fiat Currency

Fiat currency is, at its core, money that is worth what the government and free market determine it is worth.

It gets its value through

fiat

. Every

developednation

uses

fiat currency

, because the value can be controlled through monetary policies. Some

examples

of fiat currency include the American

dollar

, British pound, and Euro.

Asset Backed Currency

Sometimes, assets like gold and silver are used to...

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Immense hype surrounds virtual currencies and distributed ledgers these days. Maybe this is inevitable if you combine an inscrutable, cutting-edge technology, its enigmatic origins, and a flow of $1 billion in venture funding thus far. But will these technologies create pathways for people in emerging economies to access and use financial services that meet their needs?

Definitions vary, but for our purposes, a “virtual currency” is a non-government-backed digital representation of value. Many virtual currencies rely on cryptography and distributed computing to facilitate transactions.

These transactions are documented on a “distributed ledger,” a database shared among network participants who collectively validate transactions accordingly to an established protocol. Bitcoin and Stellar are two examples of virtual currency systems, and the blockchain that underpins Bitcoin is one type of distributed ledger.

We often hear how these technologies boast...

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Peggy68: IMO, WE ARE ALL DIGITAL GLOBALLY AND READY TO GO SOME FINE TUNING AND ADJUSTMENTS IS ALL WE ARE LOOKING AT. WHEN YOU LOOK THROUGH HISTORY AT MANY RELEVANT DATES YOU REALIZE THIS WAS ALL PLANNED OUT LONG AGO. WHATS YOUR THOUGHTS? XOXO PEGGY68

BACKDOC: YES PEGGY, WE ARE OF COURSE READY GLOBALLY NOW WITH ASSET-BACKED CURRENCIES FOR EACH COUNTRY.

TRANSACTIONS COUNTRY TO COUNTRY HAVE BEEN HAPPENING ABOUT THREE YEARS WHILE ALL COUNTRIES JOINED IN.

AS YOU KNOW THERE ARE LOTS OF DIGITAL CURRENCIES OPERATING ON THE GLOBAL STAGE. SOME OF THE ONES THAT ARE ASSET BACKED ARE CALLED VIRTUAL CURRENCIES AND THE ONES THAT ARE NOT ASSET BACKED ARE CALLED CYRPTOCURRENCIES.

FROM OUR STUDIES THERE WILL BE GREAT PRESSURE ON THE CRYPTOCURRENCIES TO CONTRACT WITH AN ASSET BACKED CURRENCY TO BE USED TO THE PUBLIC.

THIS WILL HAPPEN FROM REGULATIONS GOVERNMENTALLY.

RIGHT NOW ITS THE WILD WEST. SOON THERE WILL BE SOMETHING BIG THAT WILL CHANGE ALL...

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Apparently, not everything revolves around bitcoin in the world of cryptocurrencies. The latest edition of Freedom Fest, a libertarian gathering in Las Vegas, saw Newnote, a financial services company, and Anthem Vault, a distributor of silver and gold bullion, introduce Independence Coin (inncoin), the first digital currency backed by gold. The creators explain that it’s an alternative to bitcoin’s volatility, while critics assert that the new currency lacks decentralization.

Inncoin, with “micro golden coin” (MGC) units, was launched in secret on July 4 — US Independence Day — and is, according to its founders, an example of how technology makes it possible to possess, store, and transfer precious metals.

Anthem Hayek Blanchard, founder of Anthem Vault, previously worked with GoldMoney, an online platform to buy and sell gold. While GoldMoney provides safe, audited transfers of precious metals like gold, silver, and platinum, the process has proved more complicated...

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The continued use of a currency depends on the stability of its value and the existence of alternatives for achieving final settlement.

Virtual currencies, such as Bitcoin, represent an attempt to accomplish what only government-issued currencies and some commodities have historically been able to do—reduce transactions costs by becoming a generally accepted method of guaranteeing final settlement for the purchase of goods and services. This essay discusses the role that government-issued currencies and commodity monies have played in achieving final settlement. I then consider whether virtual currencies are likely to succeed.

The process of exchange is central to economic activity. For example, you might exchange something that you have but don’t want for something you want but don’t have; more commonly, persons exchange their labor for the goods and services they wish to consume. One method of exchange is barter—finding someone who has what you want and wants what you...

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China has banned Bitcoin from being used as a currency; Germany has permitted its transactional use; Singapore is keeping hands-off. India, meanwhile, has yet to make a ruling, but it’s keen to make the public aware of the dangers.

Today, the Reserve Bank of India (RBI), which is the country’s top bank and financial regulator, has come out with a cautionary note on the risks involved with Bitcoin and other virtual currencies. The RBI details five key risks in acquiring the currencies, whether for trading, investing, or making transactions; the idea is to educate Indians and prevent the kind of financial losses seen in today’s dogecoins heist.

Many bitcoin. So risk. Such confuse. Wow

The RBI’s five points are worth reading in full:


Virtual currencies being in digital form are stored in digital/electronic media that are called electronic wallets. Therefore, they are prone to losses arising out of hacking, loss of password, compromise of access...
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What is 'Fiat Money'

Fiat money is currency that a government has declared to be legal tender, but it is not backed by a physical commodity. The value of fiat money is derived from the relationship between supply and demand rather than the value of the material that the money is made of. Historically, most currencies were based on physical commodities such as gold or silver, but fiat money is based solely on the faith and credit of the economy.

BREAKING DOWN 'Fiat Money'

Fiat is the Latin word for "it shall be."

Because fiat money is not linked to physical reserves, it risks becoming worthless due to hyperinflation. If people lose faith in a nation's paper currency, like the U.S. dollar bill, the money will no longer hold any value. This differs from gold, which, historically, has been used in jewelry and decoration and has many modern economic uses including its use in the manufacture of electronic devices, computers and aerospace...

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Last updated: 19th October 2015

Bitcoin wallets store the private keys that you need to access a bitcoin address and spend your funds. They come in different forms, designed for different types of device. You can even use paper storage to avoid having them on a computer at all. Of course, it is very important to secure and back up your bitcoin wallet.

Bitcoins are a modern equivalent of cash and, every day, another merchant starts accepting them as payment. We know how they are generated and how a bitcoin transaction works, but how are they stored? We store fiat cash in a physical wallet, and bitcoin works in a similar way, except it's normally digital.

Well, to be absolutely accurate, you don't technically store bitcoins anywhere. What you store are the secure digital keys used to access your public bitcoin addresses and sign transactions. This information is stored in a bitcoin wallet.

Bitcoin wallets come in a variety of forms. There are five main...

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By Reynold F. Nesiba
Professor of Economics
Augustana College – Sioux Falls, South Dakota

This past May, marked the one hundredth anniversary of A. Mitchell Innes’s (1913) publication of a paper titled, “What is Money?” in The Banking Law Journal. In it, this British diplomat, then living in the US, reviewed the history and usage of money and its forms in credit and coinage. On both historical and logical grounds, he asserts that the “modern science of political economy” rests on a series of assumptions regarding money and credit that are “false.” One of the most important of these assumptions is the belief that “under primitive conditions men lived and live by barter.” Who should we blame for this false assumption? According to Innes, it is Adam Smith (1776), the father of economics, who in turn rests his arguments on the words of Homer, Aristotle, and those writing about their travels to the New World.

Perhaps one reason Innes’s work has been so widely...

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