Category: Technology

Interview with Anthem Hayek Blanchard on AnthemGold

What is AnthemGold?AnthemGoldLogo

AnthemGold is a cryptocurrency company focused primarily on making gold easy to own and, ultimately, to become a preferred currency. Each ANTHEM (AGLD) is backed by one gram of physical gold, securely vaulted with a nonbank operator and fully insured.

But looking at the bigger picture, our goal is to bring gold and cryptocurrency together to create the world’s most stable form of money… to become a Gold Standard, if you will, in verifying supply chain management when it comes to the transfer and storage of physical, fungible items of value such as precious metals.

Do you see AnthemGold as a service to be primarily used by people to transact in gold, or as a way for people to easily buy gold as a store of wealth?

Ultimately, I think it will be more of the latter – storing gold as a form of wealth – but I believe the reason people will want to buy our form, AnthemGold, is that it will be a superior way of owning gold, allowing digital transferability via peer-to-peer, decentralized networks.

How does an AnthemGold transaction compare to a traditional bank transaction?

A transaction using AnthemGold can be performed for mere cents and executed in seconds, compared to significant dollars and several days of delay for traditional bank transactions. For example, I recently sent several thousand dollars via the traditional banking system. It cost over a hundred dollars in fees and it took several days.

In stark contrast to a bank, AnthemGold provides a fully gold-backed cryptocurrency that is transferable across the Ethereum global computer network. The one gram of physical gold that backs each ANTHEM is securely vaulted at a nonbank vault and is also fully insured. What this means is that not only is each ANTHEM fully backed with gold – the world’s ultimate store of value for 5,000 years – but they are also fully protected from confiscation and from company failure.   

What are the implications of AnthemGold for the banking industry?

The current state of affairs in banking is bizarre due to excessive government control,  regulations and compliance. When you look at the countless hours that financial service companies spend on compliance, it is absurd, and it is getting worse. People who work in financial service companies will confirm this. For example, I know an investment banker who spent the first 7 months of his first job learning all the compliance rules, instead of focusing on strategies to build wealth and value for the company’s clients.

Unfortunately this is the reality, but it is something people don’t understand when they look at cryptocurrencies and marvel at how they are gaining in value. If you add up the cost of banking fees and calculate all the time wasted waiting for bank transactions and banks following compliance rules, then you begin to see the value of a decentralized and low-cost cryptocurrency. Sadly, we have become used to the current archaic government-controlled system, thinking it normal that every bank is directed and constrained by an increasingly authoritarian centralized system.

45 minutes is the average time I have to spend, when I am dealing with a bank, and I probably interact with a bank or financial service institution 25 to 30 times a year. So when you add this up, I am wasting two waking days of my life each year.

But a decentralized cryptocurrency like AnthemGold’s eliminates the need for a lot of this wasteful and time-consuming management. A cryptocurrency is so much more efficient than the current hierarchical structure. It is comparable to what innovative tech companies have done to disrupt their industries with decentralization. Think of Airbnb and Uber.

What could a decentralized cryptocurrency like AnthemGold mean for the future of banking and financial services?

Ethereum cripto currency vector logoThe current model means that almost all payment systems must clear through the centralized banking system. Banks have this special privilege for a host of reasons such as legal tender laws, bank charter laws, the Fed wire system, etc.

Fast forward to the present, and there is no denying that we are well into the digital age, and are now at the dawn of the decentralized age. Bitcoin made it possible for trust to be established in a decentralized world, and that very innovation itself has allowed us to look beyond the current Bitcoin model.

The future is in decentralization and voluntary groups, rather than involuntary compliance and a dominant centralized system. This has major implications. For example, a government today can put a lien or a freeze on an account, but in a decentralized world this couldn’t happen. It completely changes the relationships, enhancing trust, efficiency and security. In short, it changes the whole nature of the game.

Banks traditionally make money through payment services and lending, supported by protectionist government regulations that make it extremely difficult, even impossible, for any other business to duplicate a bank’s services. But although the payment system is still largely controlled by the banks, cryptocurrencies are now offering another option. Once cryptocurrencies start taking the payment business away from banks, the only big advantage that banks will have is their ability to supply credit and their access to tap into the government to monetize debt.

What is the potential market for cryptocurrencies?

The amount of gold above ground is estimated to be around $7 trillion in value, whereas Bitcoin, currently the largest cryptocurrency, is only $30 billion. So it is still early in the day, and there is so much opportunity facing us. There is easily 100x left in the space, maybe even 300x or 400x. In ten years time, the cryptocurrency market could easily be worth a trillion dollars.

Look at it another way. The gold market trades at around $22 trillion a year, which is more than the Dow Jones Industrial Index, the S&P 500 and most of the world’s currencies combined.

What are the implications of negative interest rates on cryptocurrencies?

A great question. Not only do the numbers support the market potential for cryptocurrencies, but the reasoning is there as well in our current environment of negative interest rates. As banks continue to pump out easy money and credit, this creates the demand for more cryptocurrencies because people want a currency that is not continually being debased. So it’s a feedback loop.

Once interest rates go meaningfully below zero, then it is cheaper to keep cash in a vault than to hold cash as excess funds at the central bank. The question then becomes, “How much does the central bank trust the commercial banks?” The central bank might start to enforce penalties for keeping cash reserves in a bank vault rather than with the central bank. As you can imagine, once the central bank starts to demand this cash, the system will start to fall apart. Quickly.

Another way to address this is to limit or even ban cash, a trend we are seeing in other countries. As long as governments can force central banks and financial institutions to hold cash on their ledgers, they can easily apply negative interest rates or taxes. Correct?

Exactly. That’s a big part of it. Restricting or banning cash puts more money into the banking system, to create higher excess reserves.

Many people, especially Americans, are accustomed to pricing everything in U.S. Dollars, seeing the dollar as a reliable measuring stick for valuing goods and services. But where or when do you see the tipping point when people wake up and realize that the dollar – and other fiat currencies – are not the ultimate measuring stick and that alternatives do exist?

When you look at places like Venezuela or Ukraine, the people have already woken up. In Venezuela, you hear of people setting up Bitcoin mining equipment and having to transact in Bitcoin because there is no other way to exchange goods and services, except for simple barter. Ukraine has a lot of Bitcoin activity, even a network of Bitcoin ATMs, which is fascinating given that Ukraine is a relatively undeveloped country, still struggling to break free from the crippling institutions of the Soviet era.

Cryptocurrencies make good sense when you understand how they allow people to transact globally, securely, at high speed and with low costs, and to hold assets safely and independent of government interference.

Since AnthemGold is backed by gold, do you expect the price of ANTHEMs to be more stable than other cryptocurrencies, and do you expect them to track the price of gold?

Yes and Yes. We expect ANTHEMs to track the price of gold, similar to how a one gram ingot tracks the price of gold, with a small premium being attached to it due to its form factor. For example, a one gram ingot would have more utility than a one kilogram bar because it is easier to spend a one gram ingot, due to its small size and divisibility.

What do you hope to achieve with AnthemGold?Virtual Currency Icons Set Flat Style

My hope, and our team’s goal, is to play a material part in protecting people’s wealth and their individual store of value and in particular, guarding against a scenario of civil unrest, such as will occur if inflation takes off. We hope to do this by building up the cryptocurrency infrastructure as quickly as we possibly can. At the end of the day – and without wishing to sound dramatic here – this is a matter of survival because human beings must have ways to transact. But this is still very early days, and the coding language needs to be further developed. After all, Bitcoin is not even ten years old. Like anything in our developing world, it takes a while for technology to advance and then for people to adopt something new until it soon becomes quite commonplace.

Is there anything else you can add?

A brief history lesson, if I may, but an important one concerning gold and the future of money.

My entire career has been spent in the precious metals business, and my father, James U. Blanchard III, spearheaded the movement for Americans to legally own gold once again, a right we lost in 1933 and thankfully regained in 1975, in large part due to my father’s incessant lobbying for legalization.

My parents created James U. Blanchard & Company in 1975, a precious metals and rare coin company that at one time was the world’s largest. Following in their footsteps, even my own three names reflect my aspirations and my heartfelt mission: Anthem (the freedom-seeking hero of Ayn Rand’s novella), Hayek (the Nobel prize-winning economist and philosopher Friedrich Hayek) and Blanchard (continuing the family tradition).  

In conclusion, the coming marriage of gold and cryptocurrency is my heritage, my expertise, my vision and my passion, and it is something that I take very seriously. AnthemGold’s experienced team has created an innovative gold-backed cryptocurrency that simply and securely allows you to acquire, store and spend gold worldwide, with silver and other precious metals soon to be added. This, if I may be so bold, is the future of money.

Where can people find out more about AnthemGold?

One of the best places to go is our AnthemGold page on BnkToTheFuture.com an online investment platform.

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2017 War on Cash

US dollars and troops2017 War on Cash

Overshadowed by colossal events such as Brexit, the U.S. election and the Dow nudging 20,000, investors may not have noticed an escalating war over the past year: the sinister War on Cash.

We have previously covered the ongoing “currency wars” of central banks that continually try to depreciate their currencies with lower interest rates and quantitative easing. But this goes even further because it is a war on actual, physical, paper cash.

Unprecedented Strikes Against Cash

2016 saw prominent academics and politicians shamelessly writing about the benefits of reducing or even outlawing cash. Former Secretary of the Treasury, Lawrence Summers, called for the U.S. to get rid of the $100 bill.

Former Chief Economist for the IMF and Harvard Professor, Ken Rogoff, published a book entitled The Curse of Cash, followed by numerous op-eds and endorsements by the New York Times and Financial Times endorsing a ban on cash. Australia is currently reviewing whether it will ban its $100 note.

India’s Prime Minister, Narenda Modi, announced without warning on November 8 that all 500 and 1,000 rupee notes would cease to be legal tender. Although claiming these were “high-denomination” notes, they actually equate to approximately US$7.50 and US$15 respectively, and they constitute 86% of the country’s cash currently in circulation!

Banning Cash: Rationale versus Reality

One of the biggest reasons cited for banning cash is to cut down on crime. While it is true that criminals prefer cash for the anonymity and the ease of transactions, there is no reason to believe enterprising criminals will stop their activity because transaction costs will be higher.

Criminals will easily substitute other forms of payment: lower denomination bills, other valuables like silver or gold bullion, diamonds, bitcoin, etc. Even Tide detergent has been found used as a common currency for drug trades.

The popular press surmised Tide was used by drug users because it could be stolen easily and traded for a quick fix. Yet this misses the point of why drug dealers would accept Tide as a currency at all.

The reason Tide became a currency was because it fit most of the properties of what makes a currency viable. It is recognizable (given the brand name), homogenous, easily divisible, and it has a (relatively) high value-to-weight ratio, making it portable. Bottom line: criminals are enterprising enough to surmount all kinds of obstacles inherent in illicit trade, so banning cash will not turn them into law-abiding citizens.

The next reason for banning cash is a little closer to the truth; to curb black and grey market transactions and collect all of the taxes the government is currently missing out on. India’s actions are squarely aimed at this because most Indians make virtually all daily business transactions in cash.

Further, the government will be receiving a report on any Indian citizen who deposits more than 250,000 rupees as a result of trying to rid themselves of the now illegal notes. The intention will then be to assess a tax and penalty on any of this money, if viewed by the government as unreported income.

While this may give a little boost to government coffers in the short-run, it is likely to backfire because the overall effect will be to tamp down economic activity in general, leading to even less wealth creation and less tax revenue.

The Real Reason for a Ban on Cash

The biggest reason for banning cash, especially in developed countries, is for governments to have the ability to enact even more extreme negative interest rates. Rogoff and others are actually quite transparent about this, recognizing that if banks charge an ever larger negative interest rate on deposits, savers have the option of withdrawing their money in cash and stuffing it under a mattress or in a vault, costing them less in relative terms than paying the bank to hold their money.

This highlights the ludicrous position in which central banks have put themselves, yet it is obviously the next logical step in their fallacious reasoning. To a central banker, if zero interest rates have not sufficiently spurred an economic boost with increased borrowing and spending, then the next step is to make interest rates negative, something we are already witnessing on a smaller scale.

But if minimally negative interest rates do not work, then their logic is to remove the next barrier to make interest rates even more negative. Thus the wrong intervention of the first action necessitates further interventions that distort the regular function of banks and interest rates even more.

Savers and Investors

The biggest surprise of the recent currency bans and proposals to ban currency in developed countries has been the lack of protest from citizens. Most people already use credit and debit cards for many transactions anyway and don’t seem to see the problem.Many coin bank of yellow and white metal. Cash closeup.

However, if negative interest rates are imposed on regular bank accounts, and savers have no way to withdraw their money, they will likely become more a lot more interested in what is really going on here. Fortunately, many alternatives exist to regular currency, and while governments may try to curb an exodus to these alternatives, it will likely be hard for them to do so, given the myriad of substitutes available.

For example, gold and silver will remain popular substitutes, as well as other alternative assets like other commodities and real estate; perhaps Tide detergent will even become more widespread as a common currency! Technology will also enable the ownership of these assets to be transferred and verified more readily.

In any case, investors and savers need to stay properly diversified and remain informed…..

The Future of Robotics

Robotics

Robotics

Artificial intelligence and robotics are advancing at breakneck speed, but do they make for a viable business? Google seems to think maybe not. Google’s new parent company Alphabet is planning to sell Boston Dynamics, a robotics company that it acquired a few years ago. Despite the marketability and relative success of simple, consumer-oriented robots like the Roomba, more advanced humanoid robots like those developed by Boston Dynamics probably have a long way to go before they will become feasible products. It has also been speculated that one deterrent factor is negative public response to humanoid robots that could threaten to take away jobs from humans.

Boston Dynamics have received funding from DARPA and the U.S. Marine Corps in the past, because many of their robots have been geared toward military or similar use. Historically, many of humankind’s greatest technological advancements have been made in the name of war. That makes it kind of disappointing that a consumer-focused company such as Google hasn’t found a way to make a sustainable business out of some of the most advanced robotics technology around. It would be great to see these kind of advancements supported by businesses and private investments, rather than military and government spending.

Is Technology Killing Human Connection?

IMG_4892

I have been reading a book of late called Reclaiming Conversation: The Power of Talk in the Digital Age. Frankly, it has prompted me to not only question my interactions with the world around me but also to make some changes.

Written by media scholar and M.I.T professor Sherry Turkle, the book examines how the all-consuming digital world in which we live has been an affront to face-to-face conversations, leading to a breakdown in relationships, creativity, and productivity. Having studied the role of digital technology’s impact on society for over thirty years, Turkle notes that the proliferation of texts, emails and social media chat and other forms of electronic communication have given us permission to dismiss much deeper forms of engagement; and the consequences ensuing from this, she says, are profound.

It’s for this reason that I was an early naysayer of email and other digital forms of communications back in the 80’s when the Internet was still in its initial ascendancy. Phone and face-to-face conversations had been pivotal in my life, and thus I saw no reason to migrate away from what had been working so well.

Fast forward to today, and I’m a huge advocate of digital communication. At the same time, I find myself conflicted by what I see as a lack of deep connection in human interactions these days. Much of this is undoubtedly attributed to the 24/7 access that our desktop and mobile devices afford to us on a daily basis. Symbolic of Linus’ ways in the Peanuts comic strip series, technology has become our security blanket.

In response to this trend, Turkle believes that we should reconnect with the importance of in-person encounters in our daily lives, versus turning away from it. Here, her book is replete with tons of suggestions on this front – from keeping one’s cell phone turned off and visibly out of sight during conversations with others, to invoking a device-free mandate for family dinners.

French, Spanish and Love are all Languages – but so is Computing

work-731198_960_720The Florida Senate has proposed a plan to offer programming languages to high school students to fulfill foreign language requirements. The plan has sparked conversation and has led to debates among passionate supporters and detractors. Those in favor of the plan cite the increasing importance of technical literacy in an ever-more-digital world, while those opposed question the viability of implementing such a plan, regardless of any potential benefits. The bill is in the process of making its way through the state legislature.

One huge potential problem is the cost of adding such classes to schools in a system that is already plagued by so many financial issues. Jeremy Ring, Florida Senator and former Yahoo executive, has been quick to point out that the idea is to offer computer programming as an optional choice for fulfilling language credits and not as a replacement for foreign languages or as a standalone requirement. Even so, some have questioned whether this would still lead to further inequalities across school districts that have varying affluence and access to computers.

Apple Speaks—Will People Listen?

Tim_Cook_WWDC_2012There’s a good chance that in the last couple of days, you may have woken up to one of your friends posting about Apple’s customer letter which was published a few days ago. The letter outlines Apple’s stance against the government’s request for allowing a back door to iPhones and the company’s commitment to using encryption and protecting their users’ privacy. It’s been quickly making its way around social media. The cynical side of me wants to say that this has been going on for months, and people should already know about it. I mean, I even wrote an article about Apple’s statements in court, as well as one about encryption scares in the wake of terrorist attacks. But the average Joe doesn’t follow court cases or read articles on technical subjects. Most people just aren’t interested in that stuff. That’s why Apple’s letter is such a big deal.

Though Apple has spoken in court about this, and numerous articles have been written about Apple and about privacy and encryption in general in recent months, this customer letter is the first time, to my knowledge, that Apple has made its own public statement about the issue. Anyone who owns an Apple product is going to be much more likely to read a letter addressed to them from the company itself. So far, that seems to be what is happening. I’ve seen more people talking about this letter than the court trial Apple was involved in or any articles about that. But is this enough?

I’ve been trying to gauge the public’s reaction to the post. For the most part, it has seemed to be overwhelmingly positive. But I have seen a few instances of those who would take the government’s side over Apple’s.