Still use cash?
Can we also use cash in addition to 1CoinH?
The goal of 1CoinH is to eventually go to a society without money. But even then there will be precious metal and gems. Let’s replace the fiction of cash with gold pieces for the sake of convenience. We cannot prevent a goldsmith from selling gold pieces of 1 CPH (say $1.87).
What will happen is that the weight of a gold piece that sells for 1 CPH will not match the weight of gold that is now sold for $1.87 in fiat times with an inflation rate of say 15% (plus heavy manipulation). If, for the sake of convenience, we pretend that there is no manipulation of gold prices. This will happen:
Suppose there is 0% inflation and 0% interest on savings. For simplicity’s sake, let’s say gold is $40 per gram in that situation. It would be normal for the gold price to rise to say $50 per gram (25% more) due to rapidly rising inflation (for example, when inflation is moving towards 15%). One should be prepared to pay more than 15% because you will earn back that 25% investment within 2 years of inflation. Because you have uncertainty about inflation and want to trade cheaply, you don’t just pay for the increase in the value of gold over 100 years, because with 15% inflation, gold would become worth 1.15^100 in 100 years, which is 1.170.000 times more, so from $40 (dollars) rise to $50 million (dollars)!
Where is the fallacy? Why don’t you also pay millions for a gram of gold with a coin with a 40% devaluation? The fallacy lies in what inflation is. In fiat money it is clear: It is an important piece of risk assessment about the increasing money supply. And the money supply is constantly increasing. Now up to 25% per year. This is not the case with 1CoinH. The money supply (number of CPH coins) always remains constant because coins are added every hour. So inflation in 1CoinH is always 0%. Once the gold price per gram has been determined, it will therefore be basically constant and in reality it will constantly drop a bit, because some gold is constantly being mined and gold is not lost in principle. There are currently 200,000 tons of gold exposed and another 50,000 tons of identified gold lying underground. Together that is 250,000 tons (if we can believe the numbers). There is currently $250 trillion in debt. That’s $1,000 in debt per gram of gold. Either 535 CPH per gram or a small 0.002 gram per CPH.
However, this is not a market price. You can’t eat gold. You can therefore never invest all available money in gold.
Suppose people invest 10% of their money in gold. How exactly does that work in the 1CoinH society?
First, all the gold from the central banks and in the mines goes to a fund. This is because the Central Banks are dismantled as criminal organizations. The gold that ends up in the fund is approximately 150,000 tons because approximately 100,000 tons has already been processed and divided into jewellery. People can therefore buy gold from that fund and that fund uses the proceeds to (co-)finance food, housing and infrastructure projects or healthcare. That fund will ultimately determine the price of gold together with the market. It is expected that price will be somewhere around 200 CPH per gram but will start at around 50 CPH if we look at the current manipulated gold price. However, one should remember, there is no way to calculate these prices accurate right now.
So if you were to make gold-backed securities in the 1CoinH world (for example by the gold fund), then you have the answer above about what that would look like.
Still Have Questions?
The 1CoinH / Ethical Money system is nothing like we have ever seen before. We can imagine you have plenty of questions left.
Please don’t hesitate to ask us. It also helps us to understand what we haven’t explained well enough.
