Cryptocurrencies

Focus on the Gold projects that inspired the Cryptocurrency of the Century – Cryptocurrencies

From the Douglas Jackson e-gold project in 1996 to Elrond’s E-gold or VerOne’s VRO, there is almost one step! If gold has been the favorite asset of civilizations since the dawn of time, from Egypt, 2000 years before our era when gold appeared in the form of gold bars until the years of Gold Exchange Standard which mark the end of the gold standard, the yellow metal has always captured the attention of companies and investors standing as the safe haven of modern times, perhaps soon to be dethroned by a well-known cryptocurrency. A look back at the avant-garde projects of the purists of the last century, and in particular E-gold, a sort of “gold crypto currency” which has inspired famous crypto currencies, like bitgold, up to the promise of value offered by Elrond and VRO which combine the best of both worlds in different ways.

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Warning : This article is brought to you by Vera One. Crypto investments are risky by nature, do your own research and invest only within the limits of your financial capacity. This article does not constitute an investment invitation.

E-gold, the first attempt at a gold cryptocurrency

The first digital gold currency created by Dr. Douglas Jackson in 1996, e-gold is rapidly establishing itself as a currency and a computer movement of its own. Totally indexed to gold, the currency was guaranteed by gold reserves and exchangeable on the internet. It was already in 1994, when he was an oncologist in Florida, that he became interested in economics and computer science. From his reading by economists of the time such as Friedrich Hayeck sure “The road to bondage”Where he understands the central role of money in order to maintain the link and balance between man and the Nation, until functioning of central banks which he will study closely, he builds his convictions and begins to preview the possibility of digital gold just as the internet and web boom is in full swing.

Completely self-taught, our dear Douglas begins to program in his corner the e-gold project, which he describes as Better Money ™, as a call for a better monetary system, this is the title of his personal blog of the time on which we could read:

“I started e-gold as the result of my own study and interpretation of historical events. It occurred to me that many of the worst real-world disasters, wars in particular, could have their roots in economic upheavals (cycles of prosperity and recession), upheavals which in turn resulted from currency manipulation. The system I envisioned was inspired by analysis of historical and contemporary models, all of which had the same flaw: the inability to bind a leader to binding obligations. “

Douglas jackson

Only two years before the creation of Paypal, Douglas Jackson therefore founded e-gold with his friend Barry Downey: a private currency, exchangeable internationally, impervious to market fluctuations and functioning independently of government control.

e-gold project logo
E-gold logo

This new generation electronic gold system has everything to please, and it reminds us overall of a project that will arrive a few years later in an even more original form. E-gold thus naturally becomes a representative currency : thanks to its currency based exclusively on stored gold, each amount of e-gold therefore becomes exchangeable for gold, and given the store of value it constitutes, no need to draw pictures. The society Gold and Silver Reserve (inc) created for the occasion will even go so far as to guarantee e-silver, e-platinum and e-palladium on the same model as e-gold.

The currency already uses a real-time gross settlement system, a revolutionary process for the time already applied by the big banks.

E-gold can be bought and resold on exchange platforms like Omnipay and allows a small revolution in the industry : By guaranteeing instant, irreversible interactions at a low price, and allowing value to be transferred from one end of the world to the other, all thanks to internet networks, does that remind you of nothing?

eg transaction with e-gold
Example of transaction with e-gold

In short, e-gold is arguably the first digital currency to experience such success, which will inspire more than one: first, The Gold Casino which accepts only the e-gold currency, then peripheral projects such as Gold Money and e-Bullion which saw the light of day in 2001 before disappearing in 2008… coincidence?

In 2005, e-gold closely followed Paypal and became the second online payment system in the world, with to his credit at that time over $ 80 million secured by 3.6 tons of gold. Despite problems of scaling up as we know them or of technical maintenance, the project signs and persists until the intervention of the State which will put an end to this beautiful and promising project.

Indeed, as its success attracted US government agencies, its centralized nature did not appeal, and the shutdown of e-gold marked a bitter secret service against a promising digital currency. However, Bitcoin looked at this closely, and in particular a certain Satoshi Nakamoto in order to avoid the wrath of state services on the assault on the dark web and the outlaws who were the main users of e-gold.

Is Bitcoin ultimately just old fashioned and fashionable?

As we see, the Bitcoin project did not come out of nowhere. Certainly innovative, revolutionary, resolutely transparent and daring, several initiatives having been taken before the creation of his famous white paper by the mysterious Satoshi Nakamoto. Initiatives that it is worth recalling to better understand the fundamentals of today’s most popular cryptocurrency.

the timeline of bitcoin
the Bitcoin timeline from prehistoric times to its creation

Among the pillars essential to the creation of Bitcoin are of course its essential characteristics and the essence of its functioning and purpose allowed thanks to:

  • The emergence of the personal computer
  • The arrival of the internet
  • The breakthrough of modern cryptography
  • The embodiment of political ideas of resistance and of an ideology aimed at building a new world
  • The idea of ​​digital scarcity almost impossible to fake

The prehistory of Bitcoin therefore deserves to be looked at carefully to better understand the mechanisms at work in the mind of our famous Satoshi when creating the currency that undoubtedly revolutionized his century.

On this last point, it must be said that many projects have failed despite clearly stated wishes to build a monetary model in deep revolution compared to the financial system establishes: e-cash, b-money, digicash … so many projects tested and soon aborted due to multiple issues but in particular centralization or technical failures …

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One of them, Bitgold, is clearly an ancestor of Bitcoin, in any case this is what Satoshi Nakamoto recognized in 2010:

“Bitcoin is an implementation of the b-money proposed by Wei Dai on the Cypherpunks mailing list in 1998 and the Bitgold proposed by Nick Szabo.”

Satoshi Nakamoto

Bitgold, from the cyberpunk movement to digital gold, the ancestor of Bitcoin unmasked

During the 1990s, the movement cyberpunk, defined as a dystopian and ultra technological current of science fiction had the will to revolutionize the world. Among the fervent defenders of this movement from another world, Nick Szabo contextualized in 1998 a somewhat crazy project: to create a decentralized gold system called bitgold, just after Wei dai’s b-money project.

In two words, Bitgold was supposed to represent the act of creating and managing a digital resource called by the same name, backed by no other property (unlike e-gold) but presenting an unfalsifiable rarity and therefore constituting a real digital gold. Even before the advent of Bitcoin, our dear Nick had therefore put on the table the principle of an electronic unit having a value without being backed by a commodity. From his experience to Digicash then to bitgold, we will retain from Nick Szabo his conviction that trusted third parties in the monetary process are harmful. It is also this character who contextualizes the smart contracts, and although the bitgold project will not be tested in real conditions, it deserves to be seen as a precursor of the Bitcoin phenomenon.

“The problem, in short, is that the value of our currency currently relies on trust in a third party. As many episodes of inflation and hyperinflation of the 20th century have shown, this is not an ideal situation. “

Nick szabo

Of his ultraliberal vision of money, Nick Szabo will have succeeded in theorizing the very principle of minimizing trust in cyberspace thanks to the proof of work, public register and time stamp mechanism :

chain of evidence work bitgold
Bitgold Proof of Work Chain

The resemblance to Bitcoin is such that the rumors will even weigh on Nick’s shoulders hiding his true image and not admitting to being behind the pseudonym Satoshi Nakamoto. Fact that he will deny in 2015.

Nick Szabo poster comparing Satoshi Nakamoto
Rumors were rife in the crypto sphere at the time

While he admits that his bitgold project was not directly involved in the emergence of the Bitcoin phenomenon, he must admit that he did to open minds to the evolution of Bitcoin, which now seems to be tending to become a digital gold-like reserve currency system.

Towards infinity and “or beyond”!

Now aware of all these initiatives that appear from the last century and yet have foreshadowed the emergence of a decentralized currency that we all know very well, now let’s look at future projects that allow us to combine gold and cryptocurrency.

We will recall the recent launch of the next generation E-Gold (EGLD) by Elrond.

Elrond launches EGLD
Elrond launches EGLD

If the name normally reminds you of something, the concept isn’t that far off: true digital gold 2.0, the appearance of this new cryptocurrency marks an essential turning point in Elrond’s strategy to establish itself permanently in the fertile ground of DeFi. As we explained to you in an article published this summer, Elrond is making a big splash behind the scenes in the crypto and blockchain world and could be in the spotlight in the months to come.

The E-Gold token in brief is:

  • 20 million units at its inception for 8 billion people, of a rarity … rare!
  • A “theoretical” maximum supply limit of 31.4 million over 10 years
  • Each transaction fee paid “reduces the theoretical limit”
  • Adoption reduces inflation and increases scarcity, so 31.4 million will never be reached
founding principle of EGLD
founding principle of EGLD

“Owning a few thousand eGold now is like owning a few thousand bitcoins in 2010”

Elrond

The other project is that of VeraOne that we presented to you in our previous articles : the gold stablecoin made in France which allows you to tokenize gold and thus invest securely in physical gold using your cryptocurrencies.

By offering a robust stablecoin based on classic currencies, this is the guarantee of having physical gold in your crypto heritage! Combining the best of both worlds, VeraOne is undoubtedly THE project to follow for lovers of crypto and precious metal, especially since it has never ceased to amaze us.

VeraOne, the French stablecoin backed by physical gold
VeraOne, the French stablecoin worth gold

VeraOne is finally a project that started in 2009 with the creation of Aucoffre.com, a key player in the precious metals market, continues its rise with the creation of VeraValor in 2011, building on its success, the company launches its own line of gold and silver coins. Then, from 2015, with the ambition to democratize precious metals, we saw the arrival of VeraCash the first card that revolutionizes gold payments. And it is from 2019 that VeraOne (VRO) is born, France’s first fully gold-backed stablecoin, cocorico!

Concretely, VeraOne is:

  • a gold crypto: an anti-volatility asset
  • the possibility to buy physical gold directly with your cryptocurrencies
  • a secure and guaranteed storage on multiple platforms
  • a transferable, traceable, exchangeable and stable token
  • maybe the opportunity to experience a new gold Rush ?

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And if you want to learn more about the history of the world’s oldest safe haven and its modern crypto-backed applications, find us every week in the Alternative Investing Forum!

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