Bitcoins

The best of all the coming competing currencies to BitCoin is simply called 'SilverGram'. It is exactly what it says it is. A divisible gram of silver. The symbol will be similar to the dollar symbol $ but with two lines going up and down through the 'S' just like the bitcoin '฿' symbol.

The present dollar symbol with one line going through it comes from silver anyway, from the days of the silver certificate, but the US $ dollar no longer is backed by silver. The 'silvergram' currency will also be money by true definition, unlike bitcoin which is not money but just currency. The 'silvergram' competing monetary system will compete with everything else out there and be valued at the historical norm about a tenth of an ounce or about 3 'silvergrams' an average 12hr days wage. So hourly rates would be measured in milligrams depending on the work and how skilled or whatever. The freemarket would find correct values for everything on its own. It could work exactly the same as bitcoin but also be backed by real grams of silver. For smaller transactions even 0.1 milligrams increments could be used digitally (transferring ownership of serial numbers of 0.1 miligrams or 0.001grams of real silver) or real grams of silver could be exchanged in any form just as has been done for thousands of years. But now it could be digital for ease of use. All that matters is its backed by 999 fine silver.
This 'SilverGram' competing currency idea could work exactly the same as BitCoin with the addition it is backed by real money - Silver.
There will be official depositories around the world and expand in numbers as the idea takes off. Each depository would charge a small amount to cover costs for each transaction just like bitcoin and have boxes 1Kg - 10 KG full of silver in any form but each box with serial numbers. The computer would be able to digitally change ownership of a percentage of the grams of silver in each box, right down to 0.0001% in any form coins or bars of any size or shape, all that matters is grams of 999 silver. It would even be possible to pay 0.1 of a digital miligram of silver for small transactions. Or it would be possible to 1KG transact silver digitally. You would have the option of taking possession of your real silvergrams at anytime.
You could have the "future digital" portion of the currency be digitally mined the same way as bitcoin. Then estimate a realistic number of grams of mineable silver. Currently estimated to be 17 years worth left. Then setup the algorithm to end there. People could purchase futures contracts for mined coins so as they were mined there would be someone in line to fill in the real silver. After natural silver deposits have been mostly depleted urban mining from landfill could provide silver to fill the future contracts of digital miners.
Real silver grams could also change hands as well as digital grams. The free market would find values of everything and this 'SilverGram' could compete with everything else out there, it could start off at the present price of silver LOL which would soon end the manipulation and the free market would ensure silver would correct back to fair value. Some have said BitCoin was gold 2.0, but this SilverGram really idea could be.
It would be possible to protect your privacy by instead of digitally transacting withdraw the silvergrams and physically hand them to the individual you are doing the means of exchange with. Monetary PM's are a very private way only you know how and when and how much you are saving or spending, if you want the privacy. At a time when almost every purchase made or asset saved indeed almost every transaction made is then available to corporations and governments, using monetary PMs privately between parties as an alternative to currency becomes increasingly attractive. The idea that Bitcoin and other digital currencies are anonymous is wrong, but one that a lot of people get caught up in. It's like cash that comes with a register of all previous owners. Not names but computer code that tracks every moment forever. That code can then expose individuals and all their associates. Monetary PM's physically not digitally changing hands are the only 100% private way to transact.

So a digital currency that you can also have coins with intrinsic value that can physically change hands, this would compete with and win over bitcoin.

which would you put your trust in a backed currency or an unbacked one?

Same as bitcoin no central authority, if there was doubt about some depository then there would be a run on it and all the silver would be withdrawn. The free market would work things out.

If we use silver backed currency doesnt this mean silver will be greatly in demand, therefore the price will go up, and everything that uses silver in industry will become astronomically expensive?
Clearly precious metals are the original form of currency, and there is no doubt it works. But it results in huge vaults full of very useful sustances sitting idle for 100's of years (like the Bank of Englands gold bullion vault) that seems a waste to me.
We need to use (wisely) our natural resources not store them away.

csm888 wrote: »

If we use silver backed currency doesnt this mean silver will be greatly in demand, therefore the price will go up, and everything that uses silver in industry will become astronomically expensive?
Clearly precious metals are the original form of currency, and there is no doubt it works. But it results in huge vaults full of very useful sustances sitting idle for 100's of years (like the Bank of Englands gold bullion vault) that seems a waste to me.
We need to use (wisely) our natural resources not store them away.

Silver next to oil is the most widely used commodity ever. It is irreplaceable in nearly all of the over 10,000 applications that consume it. But used in tiny quantities per application. This is why silvers price is almost irrelevant to the finished product. Such a tiny amount in each application. But that tiny amount over more numerous applications than the stars. This means the price is inelastic. No matter how much the price of silver goes up it will not affect the price of the finished product very much at all.
This is what makes silver unique. All other commodities have a self correcting price mechanism.

If the price gets too high the demand will drop off as users look for a cheaper alternatives. Most of the 10,000 plus uses of silver have no alternatives.
So a manufacturer will have to absorb the price increase. But that is not so much a problem because each unit uses tiny amounts of silver each. For example the average computer or mobile device has to contain lets say one tenth of an ounce of silver. So about $2 or $3 of silver in each device. Now lets just say the device sells for around $1500 each unit. If silver were to go to $1000oz then the same silver in that computer would be worth $100. Do you think the big manufactures like Apple are going to say we can no longer sell computers because the price of silver is too expensive? No they could raise the price by $100 to $1600 and advertise that our products are the best because ours have the most amount of silver in them.

If we had a silver backed currency my rough calculations say in total this would make 1g of silver be worth $1333 dollars.
This is going to mess up a lot of industrial applications.

(World Currency M2 = $40trillion, 30Ktonnes of Silver in the world)