Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins aren’t printed, like pounds or euros – they’re produced by people, and increasingly businesses, running computers all around the world, using software that solves mathematical problems. It’s the first example of a growing category of money known as cryptocurrency. However, there’s a new cryptocurrency coming to the market, but what makes it unique? It’s backed by gold.
Anthem Vault, the metals and technology company, will launch the coin on May 25. The coin will “be valued at 1 gram of gold at the day’s market price, [and] will serve as a more secure store of value than Bitcoin,”. It will be called the Hayek, (after the Nobel-winning Austrian economist Friedrich Hayek). As the price is determined with a resilient consensus process that does not rely on central third party authorities, it is far more stable.
CEO of Anthem Vault, Anthem Blanchard said “gold is arguably the most trusted store of value of all time,” which is why he chose it to back his new cryptocurrency. When asked about the recent volatility in the price of gold, Blanchard said, “If you look at last year, gold did go down in dollar terms, but it went up in almost any other currency terms.” He also noted that, “Forex has gotten even more volatile, in the last 10-15 years, which is scary to me.”
One use case for the Hayek coin, is if there is a massive distributed denial of service attack on the modern financial system. FREDGold prices haven’t exactly been stable, at least in dollar terms. “Talking with friends of mine in the intelligence agencies, they say this is a real threat,” he said. An attacker (he used the Russians as an example), “could create a massive DDoS attack, make the [financial] system inoperable. Ultimately this is how we rely on our payments.”
If a big attack hit the computers that clear payments in the banking system, people would be unable to pay for things. Bitcoin and other cryptocurrencies based on the same technology don’t work like that. There’s a decentralized system of confirming that a payment has been made, so systemic failure is (almost) theoretically impossible.
Eventually, Blanchard would like to branch beyond gold.
“We want to ultimately make every metal spendable. You aren’t going to be able to take practical delivery of plutonium or uranium in your house. But there’s no reason why you couldn’t have ownership of that metal,” he said.
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