Backed by Physical gold example:
As Crypto-currencies continue to morph, a few new crypto-currency developments on the horizon are set to link physical mining value to logical mining value. There are also developments in the crypto-currency market which are fully backed by renewable energy projects powering the computing platforms used to run the software which generate the crypto-coins, and thus power their logical mining efforts.
For those of you who really understand, crypto-currency mining efficiency and cost reduction is linked to Moore’s law in the logical mining sense, as well crypto-currency is also dependent on the cost of power to run the computing creating the secure software keys which protect the value of the crypt-coins and the wallets they are held in and the open public ledgers which record the users transactions using crypto-coins as currency .
NEXT Step: Link Crypto-Currency directly to Main St. Physical Assets, Service Revenue
The next logical step for crypto-currencies in our opinion, is to link crypto-currencies to physical assets directly, physical assets which are known and accepted by today’s main st. economy for their ability to retain their intrinsic monetary value over time. Gold, silver, platinum come to mind as ideal physical assets which themselves are de facto world currencies as the right type of pure physical assets to backup new crypto-currencies.
The Current Fiat Currency Fiasco soon a Figment of Our Past Imagination? Soon..
One thing is certain, Fiat currencies are not a choice to back up crypto-currency, as Fiat are promissory notes to pay backed up by public debt holders , like the US Federal Reserve, who are counting on others private and public to pay their debts with interest charged for Treasury Notes issued. What is really scary is that same debt issued by the Fed is used as collateral for more debt issued at an 8X+ debt multiple, really a derivative type financial vehicle, (a gamble) lent out to others as term loans, with the private banks creating Fiat money out of thin air (not based on any Main St. Market Growth) backed by nothing more than a promise to pay in many instances and usually used to cover other debts due (a Ponzi scheme), which if associated to any physical asset as collateral, is usually well beyond or greater than the perceived market value of that asset (think house mortgage in a down market and you have the sub prime disaster which is upon us for a second time in 7 years..it’s just 10X bigger)
Higher Power Prices: A Service Revenue Stream to add value to Crypto-Currency?
So what does crypto-currency have to do with renewable power generation and energy storage? It’s simple, price of green power will start to fall with improvements to Solar, Wind, Geo thermal based generation and new forms of zinc air and lithium Polymer energy storage, all making it possible to mine green crypto-currencies using green/clean energy sources, which themselves can be linked to green/clean powered metal reclamation and refining efforts for metals. More interesting would be to also back partially or wholly, the value of green crypto-currency with guaranteed revenues generated from renewable PPAs “Power Purchase Agreements”, thereby creating a direct link between green crypto-currency values and market performances driven by the returns from green energy generation and storage PPAs. The good news is the first steps is already under way, and others in the green power generation and energy storage PPA market will soon make the connection to take the next steps.
Crypto-Coin Mining backed by Green Power: Is it Ready for Main St. economy use?
http://www.genercoin.org/ for an example of green power generation backed crypto-currency, a first step forward.
RENEWABLE ENERGY POWERED NEW MAIN ST. ECONOMY: EARLY DAYS
It’s early days for the new renewable energy powered main st. economy, still lots of dots to be connected, and much more competition needed, and more widespread acceptance and use of crypto-currencies needed, which we think up until now, as crypto-currencies have not had the right links into the “old” main st. economies, where all the physical assets live, to be backed up properly by physical assets and a way to easily move back and forth between the new and the old currency forms without risk.
Crypto-currencies as they stand, yes, deliver value in terms of fast zero charge money transfers with cross border conveniences and fast conversion into fiat currencies as needed in most cases, and have a base line value based on the investment in the form of cap-ex purchase of equipment which is then used to create/mine crypto-coins , where such efforts incur operating expense charges when the mining operation is working to create the crypto-coins to their set currency count limit (ie-money supply) given the current price being paid for the currency. Great, all good. And yes Blockchain gives crypto-currencies the distributed transparency of business transactions everyone wants to increase trust levels and reduce use risk. However for must of us with low risk profiles, and government regulation and meddling aside, this type of alternative currency conveience, while attractive in some transaction situations, is not enough value for us to consider crypto-currencies for daily use in the Main St. local economy.
Crypto-currencies: How to get Wide Spread Use in a Main St. Economy.
Moving forward though, we at Starwind5 think in order to get wide spread use and acceptance, the current crypto-currencies need to morph and be backed up with real tangible physical assets, as convenience of use value is not enough. We would invest in crypto-currencies provided value of the assets deployed and the work completed (powered computer equipment creating/mining crytpo-coins). Frankly nobody on Main St. really cares how much equipment and power was used to create a strongly encrypted security key protecting your crypto-coins and wallet, even though blockchain open public distributed ledgers keep the tax man and the account happy.
We as regular Main St. consumers need currencies we can trust with very low risk of use inorder to complete transactions, so that means we need to be able to convert those crypto-currencies into any type of old currency (physical being gold or silver for example, or today’s debt backed legacy fiat currencies, which some would say are worthless in economies running a national debt larger than their GNP, like the USA) or to be able to convert these crypto-currencies into physical goods, or physical durable assets or revenue generating services (like power generation and energy storage) at any time, easily and conveniently , across borders, with zero transaction fees and without restriction and without interest. It’s a tall order, with many concentrated wealth interests putting up the hurdles to slow down what is inevitable.
Then and only then, when new main st. crypto-currencies are bridged to old main st. worth-full currencies and assets and revenue paying services, will crypto-currencies, delivered by green powered mining or otherwise be truly accepted by the masses.
Crypto-Currency Investment in Renewable Energy Projects: A Safe Bet?
We at Starwind5 can’t wait as this also means physical asset crypto-currencies will also start to fund partially green energy projects in volume and be accepted as a main stream by crowdfunding groups leveraging and promoting physical asset backed crypto-currencies as the way forward in the renewable energy sector, leaving partly the concentrated wealth model behind in favour of growing the distributed wealth model created at the local community and local small business levels of the old main st. economy.
Crypto-Currency as a hedge against Fiat Currency imminent devaluation?: maybe
If the crypto-currencies themselves invested in revenue generating services, like renewable hybrid power generation and energy storage, which earn a contracted rate of return over several years, increasing the value of the crypto-currency over time, where some of the value is received as a dividend driven revenue from the power project is then added to the value of the currency, to expand the supply ofthe currency and alter the price somewhat modestly upward, where such dividend payout is received by the currency supply in the form of fiat or gold backed asset conversion of the dividend to crypto-currency valure and coin count (additional issue without inflation, only through Main St. economic growth), then you have a real investment with upside and stability, and a completely different usury free, crypto-currency equity investment in the PPA revenue stream generating power generation market segment.
It also means their will plenty of crypto-currency choices available of different physical asset and revenue generating service backed value, choices which will re-define our portfolios and risk profiles for the betterment of all, defining new groups of crypto-currency investors and users, groups defined as much on philosophical borders as they will be on physical borders where differences in language and culture were persist and flourish, aided by crypto-currencies at the small business main st. level.
The Future is physical asset and/or revenue service backed Crytpo-currencies
It might just come to pass green crypto-currencies back by secure stable green hybrid power generation and storage assets will themselves be seen as inflation proof and a market disaster proof currency that will ultimately co-exist and compete with ‘safe harbor” physical asset backed currencies such as gold and silver, as it is now, we are , without power, pooched, so this way forward makes sense, leaving fiat currency, usury and the corruption that goes with it to fade into the past (behind bars we hope), sooner, rather than later.