An Introduction to BitMoney

About BitCard, BitMoney, BitGold and BitSilver

After being strongly influenced by The Future of Money by Bernard Lietaer in about 2004, I’ve had the strong belief that money needs to be something people decide amongst themselves and not the managed fiat currencies we have in place today.

The most obvious way to achieve this is to once again allow gold and, to a lesser extent silver to fulfill this role as they have done for thousands of years in the history of civilisation.  In 2006-07, I made my own first foray into exploring this via the book How to Invest in Gold and Silver.  In that book, I made the quite accurate comment that “contrary to popular opinion, banks often go bust..”, something which became tellingly accurate in 2008, although some drastic and I think it’s fairly easy to argue, incorrect, decisions were made which bailed out a lot banks at the the expense of the taxpayers, their children, their grandchildren and most probably, their great-grandchildren unless this modern day slavery cycle can somehow be broken.  The best prediction I made though was the rise of gold and silver.  Something which although it is stalling in 2013, I expect to once again rise strongly for several years versus fiat national currencies.

Now that the internet has matured, there are now a variety of companies out there offering through the medium of online, opportunities to save at low cost in Gold and Silver and at the same time make those savings outside any jurisdiction of their own government.  So for example, a Cypriot foreseeing the problems that led to the forced confiscation of Euros in their bank could place some of their savings into Gold in Singapore at great benefit to himself.  Two of my favourites are GoldMoney and BullionVault.

The next step to me, seems quite logical, yet right now those companies are too scared to offer it because it will put them right in the firing line of the US Government, who has an alarming track record of bringing down perceived threats to its monetary dominance.  One only needs to see the stories of e-gold and the Liberty Dollar to understand they will not tolerate anyone undermining their right to manufacture dollars out of thin air and use them to pay for real goods from overseas, such as oil.

However, considering some states within the US are now quietly remonetising gold and silver, things are definitely changing.  I think it’s only a matter of time that people place more of their savings outside of their government’s influence, into Gold and Silver.  If you believe that, then it’s fair to say that you also agree they will rise in value while national currencies decline.  The major thing that will reinforce the change however is if people can then use the remote precious metal they hold as promises to pay for goods and services.  If that seems somehow similar to how trade was conducted once upon a time, it is.  What’s different is how the internet provides a truly global, streamlined solution to many age old questions as to how to avoid forgery of money, trust the purity of the coinage and conduct trade internationally without pricing issues.

How might that happen, exactly?  To me, the solution is simple.  One will pay using a credit card, let’s say a BitCard.  On this Bitcard, you will have the option of paying with BitSilver or BitGold.  The BitGold or Silver will then be denominated in individual units, which could be the bits themselves as an agreed amount of metal, or it could be a traditional metric measure such as, say, a SilverGram.

You could even one day then have private banks competing against each other for your savings.  Let’s say I wanted to appeal to the British market.  Then, I could stock my vault with nothing else but gold sovereigns, logically divide those sovereigns into smaller weights and offer a unit of currency called a BitSovereign.  Let’s then remember that up until 1947, shillings also contained silver.  I could then have a second vault full of pre-1947 British silver coinage, logically divided up into units and call that a BitShilling.

With government out of the equation, the money itself will never then be anything but trustworthy.  The unfortunate thing of course is that inflation is going to all but disappear and governments can’t play with an elastic currency to engineer booms to win votes or drive the populace further into the slavery of debt.  What a shame!

Of course, this puts the onus on the individual to ensure the private company they buy gold and silver from actually does have that gold and silver in a vault to back their purchase.  This requires a lot of due diligence on the part of the consumer and is where governments then demand the right to protect their citizens and make the precious metals seller comply with many regulations to confirm they are sound.  The irony is that all of the banks that did or nearly went bust in 2008 were fully government-compliant.  That applies to the US, UK, Cyprus, Iceland or any other country you care to mention.  Furthermore, talking about audits of gold held in vaults should embarass the US Government greatly.  They have not allowed an audit of the gold allegedly held at Fort Knox for years.  Don’t believe me?  Read here.

Now, given that, would you trust your savings to an organisation that has to offer a superior service and complete trust in order to obtain your investment, or, do you trust your own government?  It’s closer than you originally thought, isn’t it?

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