Why The Royal Mint Jumped Into Digital Currency. My Theory

Today I heard about the Royal Mint creating its own altcoin. Not just any altcoin, this one will be backed by gold. Gold stored at the Royal Mint. My first question is: is that gold backing up anything else at this time? If not, why not? Sounds kind of shady to me. What made Great Britain decide to create a government altcoin and why are they backing it up with gold? I have a theory.

First of all, the British pound hasn’t been backed by gold since 1931. That answers one of our questions. So it is indeed free to back a new currency. Backing money with gold gives money “real” value. It makes it easy for people to trust it. When governments moved off the gold standard, we were given fiat currency. Fiat currency is backed by debt, at least in the U.S. where I live, every time money is borrowed, new money is created. Don’t worry; we’re not getting into all that. I just want you to understand that the currency we use today is as flimsy as a wet noodle. Having said that, why then did fiat money appeal to governments?

I’m no expert on the matter, but to my understanding, fiat money was appealing to governments for the purpose of competing with other governments. Not just competing in markets, but also in war. It was war that fiat money a necessity. Let me explain quickly. If one nation is funding their war with fiat money and another is limited by how much gold is in their vaults, fiat wins. Governments have gone off and back on the gold standard time and time again. This last time however, was the longest period that I know of, it’s been a hundred years give or take, depending on the country you live in. This necessary fiat currency has driven our society right into digital currency. It is an alternative to a failing money system, that government and banks have control of. Now the people of the world have a trading tool that frees us from taxes and government snooping. It seems a new era has begun and the government is in last place.

One thing I'm seeing with all cryptocurrencies is they each have unique properties to them. Each one is being tied or pegged to something, or they offer some unique benefit to the user. For example, Ether is tied to the Ethereum platform, Steem is tied to its own social media, Dash boasts that it has the fastest transfer rate, and Ripple can trade with anything; each one having its own pros and cons. This is what appeals to the people who use it and believe in it, but which one is best? I don’t think this question has an answer yet. There are so many new digital currencies now, that the market will be diluted more and more every time a new one appears. This type of system won’t last and there will be only a handful of survivors when the dust settles.

This is a race to the top. A race to see who can come up with the fastest, most stable, and most all encompassing altcoin on the market. But it’s not just the currencies that are competing; it’s also companies, people, and now governments. I think it’s obvious by now that the people want transferable money that is free of government oversight and interference. And companies want a commodity that will make them the most money, even if the commodity is nothing more than an invisible computer blip that can be contained in cyberspace. Companies are really just attention whores, they want your attention and now they have it. And I’m sure the corporations and the people (consumers in this case) will come to an agreement on what works best for them, while government is left out in the cold.

I think governments are afraid of this new currency; they are not sure what to do about it. If they jump in too fast, accusations would fly as to what their motives were, if they wait to long, they could lose control of their currency completely. It's no surprise that Great Britain made the first move on government altcoin. After all Great Britain is the birth place of our current fractional reserve system; fiat. It’s also no surprise that they would come up with the boldest move to enter the race. “We’ll back it by Gold!” They said. It is quite honestly a winning strategy, but will the people, will the corporations buy it? Not the currency, but the sales pitch. Will we fall for another government currency that is said to be backed by gold? Didn’t we already do that? Either way, this seems to be the next new thing in our lives. Just like the radio, the television, the internet, face book, and the cell phone. Digital currency is happening like it or not. There is no reason for government to get involved, we got this far without them. Let’s all remember what government does with money. They spend it like children and knock down your blocks. –Paul Fitzpatrick

“Politicians can’t give us anything without depriving us of something else. Government is not a god. Every dime they spend must first be taken from someone else.” — Barry Asmus

“The first requisite of a sound monetary system is that it put the least possible power over the quantity of money in the hands of politicians.” — Henry Hazlitt