“Crypto-Gold” or is it “Crapto-Gold”?

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The crypto-currency landscape is full of ups and downs, pitfalls and bumps that lead us all into head-spinning confusion — what’s going on? help!

Here is a good one: Bitcoin has more value than actual gold. I don’t mean that the price of Bitcoin is worth more than the price of gold, I mean that a 2 ounce coin cast with a Bitcoin logo on its face is greater than the gold value contained in the coin itself. And, the coin itself, well it’s the physical version of the digital coin. Ironically, Bitcoin is backed by fresh air, highly volatile, and mined by unsustainable energy resources with fluctuating costs. Of course, Bitcoin Gold coin promoters will have you believe that bitcoin is gold. Of course, the coin was made with gold for multiple reasons: it makes the buyers think Bitcoin has gold value, or it might make a buyer believe that it is backed by gold, or even better than physical gold. What’s your take?

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There are other coins similarly advertised: “gold-standard, gold-backed, weight in gold”. A cool one is Ethereum Gold. The site is littered with spelling errors. Minor details, right? We all know the important part is the decentralized system, no central bank connections, etc. Well, Ethereum Gold offer a Visa card against your digital wallet and call it “the future of payments”. My question is why not just use the visa? With their bright idea the owner of the crypto has to deal with fluctuating crypto values, unknown “fuel” costs on the “roller-coaster” Ethereum platform. Why do the creators of this coin think we consumers can’t see through their obviously flawed business offer? What must they think of us?

Another oddity is “Bitcoin Gold”. A non-gold related crypto-currency coin using gold as some recognition to their implied value. But, Bitcoin Gold was designed to allow more people to mine the coin and thus, open up the user base to “free” the bitcoin. Yes, you guessed it, the Gold part is to make us crypto-currency enthusiasts “double-take” and get some. But, it has no relation to Gold.

Have you seen Goldcoin? It’s another crypto-currency with no apparent relationship to Gold except that the company has actually implied that Goldcoin has performed better than Gold — or at least with less volatility that Real Gold over the same period. Their blog says Gold is volatile as it has fluctuated between 1200 and 1300 USD over the same period where their coin rose from 0 to 0.55 “before falling slightly back to 0.40”. The significant error in their statement is that there is a greater percentage variation with their coin than real physical gold. Seems they are hoping you don’t see that blatant misinterpretation of facts.

How about GoldBlocks? I read their vision statement. I am sure it is better in their own language because in English it does not translate at all. In fact, I have no idea what they are talking about, actually, its worse than that; I think I can say they are talking about nothing at all.

GoldReserves, another crypto-currency coin is masterful. The coin was created according to the founder “because there is not one altcoin which gives people the feeling that it will give a steady growth and if things goes sideways, and coins can easily liquidated at anytime without a huge loss” (grammar is all on them). The founder says all funds collected are used to buy gold so when the coin fails you can cash in your coin for gold. It’s a great idea! Here’s a better one: put you money in a piggybank and when you need it because you lost your money with Ether or Bitcoin you can get it from your piggybank. And, no middle-man!

Ever seen Goldcrypto? Have a look at the Mission statement. Seems that an investor will earn by investing in their Russian Gold mine. And, the profits will be secured in an escrow. Then there is this other gold producing company that somehow is involved with Goldcrypto — not clear. They generate revenues and share with members. Money is spent on overpriced new equipment (compare online pricing yourself). All of this is floated on the Ethereum platform as an ICO. Apparently, the escrow is in the UK. If any of this makes any sense, great. I am confused, and I am not sure about security. And, lets face it, an escrow is only as good as the document. Read the fine print.

And then there is a company called Puregold, I guess to differentiate between other companies that might be called gold plated. They promote an idea of Gold ATM’s, and Payment systems. But, in truth the Gold ATM is nothing more than a Gold Vending machine that you can use with a credit card — not so decentralized as they claim. As to the payment system, well you have to use a bank card. This is just another crypto-currency company advancing their business ideas using Visa or Mastercards. Same old banking system here, the only difference is that they are selling you real gold. Boring really.

A new product is the Realescoin. It is a “basket” of values: silver, gold, bitcoin, and altcoin. Looking at the white paper you can see things just don’t add up: They call Bitcoin Gold 2.0. Their reason is that not many people have heard of Bitcoin and therefore Bitcoin has a great upside for more sales. As they plan to carry the Bitcoin in their basket, backing their coin, holders of the Realescoin will benefit. Laughable economics! But, as prominent figures such as John McAfee and Wences Carsares say so then it must be so! Do these people do their own research? Here’s another gem: “Silver historically had [an] average ratio of 10:1 in relation to gold, meaning a one ounce of gold has historically been equal in value to 10 ounces of silver”. Well, that is NOT true, not even close! The average ratio of gold and silver over the 20th Century was 47:1. Realescoin’s basket carries 35% silver! Seems they have all their numbers wrong. I won’t waste your time or mine talking about the other issues.

Darico, a crypto-ecosystem. On a computer it is nice and shiny and Gold like, but has nothing to do with Gold. Apparently, the Darico coin “is your ticket into the Darico ecosystem. It gives you exclusive access to the tools you need to profitably invest in cryptocurrencies”. Seems like circular reasoning to me: buy crypto so you can invest in crypto. What? What I love about it is that they say it is exclusive, so exclusive that they have made available 240 Million coins. Does this make sense to you?

Here’s something special: you know how ICO’s offer some solution to a problem, or even tell you in their white paper what they bring to the world and how they can help you. Well, goldbitscoin does none of that. It explains bitcoin, and how to prevent fraud — nothing interesting or new about that. But, the white paper says nothing about their coin. Nothing! So, feel free to waste your own time finding out.

All right, Flashmoni claims to be the first all-in-on card bridging digital & real worlds. But, its really a bank card that connects crypto to users. The idea being to serve those who don’t have bank accounts. These people can bank their cash into Flashmoni atm stations. The credits go to their crypto accounts. The underlying question is why not just let them use the cards? what has crypto got to do with it? Users could just as easily make use of the card — which must be a bank card. It seems they are using the funds generated through the ICO to purchase bullion to back the crypto-currency, with the balance for the ecosystem (a word thoroughly overused these days for everything), actually, that is not quite accurate: only 8% is the development 22% is for investors, bounties and founders. Everything then is their ecosystem. Outside of their nice colourful site, and their inclusive video, I just don’t see the point. My guess is that Flashmoni is ONLY using the crypto-side of this to run an ICO. Really, they could run this thing with NO crypto except that they would have no excuse to run an ICO and get cash. Oh, they are using the Ethereum platform too. I guess they will be passing on the outrageous platform mining / transactional costs to the clients who have never seen a bank account before. Sure, they likely won’t even notice the first time. After that, well Flashmoni might change their name to Hemorrhagemoni! Read it for yourself, i’m not joking!

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Here’s a great one: Sudangm. It’s a Sudan Gold Coin. The idea here is that they sell crypto with the proceeds going towards mining activities in the Sudan. You know, I am sure they are wonderful people, but this type of thing — in Sudan — is a local selective thing. I am not buying crypto for a Sudan project because it is in the Sudan. I love the people, but politically, I don’t think I will see anything back from it. Sorry, just my take on the politics.

Aurumcoin, according to them the first virtual coin (crypto?) backed up in solid gold. Never heard that before! — oh, well only a few times before, read this article over again. Anyway, they scare me a bit with the delusional language: “it was born from a profound understanding that we live in one global village”. Are they kidding? The world has never been so chaotic: Brexit, Trump, European Union fracturing, Russia and China expanding their global aspirations, poverty, middle-eastern disputes, Syria. Lets all hug and sing “Kum ba yah”. OK, these people are stretching reality. And, if they are doing this at the beginning of their crypto-party where will they be in a year. I’m going to use cheese as my currency, surely everyone likes Cheddar?

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Digix global is another giant of it’s time. Wedded to the Ethereum platform, for sure. Digix say “Ethereum needs a unit of exchange that allows it’s users to store value over time”. Why, another one? That’s Ether’s roll on the Ethereum platform. Of course, my favourite line is “the digixdao governance model is currently undergoing a careful planning, development and auditing process.” It’s comforting to know that they are doing this AFTER raising the 5.5 Million Dollars in 12 hours from their crypto! (spelling error? you tell me) Tell me, why don’t these people read their own stuff before they ladle out more contradicting nonsense? Sorry, tired of this one!

I just read about Goldmint. For this one, there is a lot of reading to do. Nicely done guys. So, I went right to the meat of the issue: how much does the gold cost: 5% above the LBMA
price! Are they kidding? 5%! You know what, I am done with this one. We know where they are making their money, by overcharging for gold. I can get that from any “pawn shop” or gold seller online. Who the hell needs Goldmint. If you want to give your money away, go with Goldmint! Not me, no thanks.

Zengold is next on my list for a look. Forget this one, does not work, and has no info outside of Chinese. I suspect they are not ready yet due to the Chinese Governments’s views of the crypto-markets.

Hey, Hellogold. Look at that, free to register, never heard of that before, NOT! It seems you buy or sell, though you have to buy gold first before you sell by topping up your “free” account. You have to pay fees on the buy and the sell, and if you buy gold you have to pay for them to store it. Sure, it’s only 2% for each of these services but that can add up; Once again, they are selling gold at premiums. I’m moving on. nothing special about this one. I say goodbye gold!

I have to say, I got the inspiration for writing these comments on Gold-related crypto from “crypto-classification need to know before investing” at XGold site. I was surprised to find that there are so many coins pretending or acting like they are gold backed that it is difficult to tell who really is real.

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Gold images of these coins proves nothing and there are plenty of examples of coins showing gold imagery but in truth they have no links to gold, and often, no real connection to crypto-currently. Trying to link a coin with a credit card or even debit card is not really conducive to the ideals of crypto. Certainly not at all “decentralized”. But does any of this matter? Do we really care? Aren’t we all looking to make a billion dollars on Bitcoin? Or, find the next “investment” vehicle for a penny and ride it up to $20,000.

For me, I just want a stable, gold-backed crypto-currency that will allow me to buy and sell good and services, with low transnational costs and no inflationary issues. But, I don’t think I will find that with the crypto-coins described above. But, I am confident that what I am looking for is out there.

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Gold backed, Stable, redeemable Crypto-Curency

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