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Is This the Next Logical Step for Cryptocurrencies?

Just when you thought that you had a basic understanding of how cryptocurrencies like Bitcoin worked, someone comes along and flips the narrative on all of us and we end up circling right back to the place where mediums of exchanges got their start: precious metals.

Don’t like the intrinsic value—or lack thereof—of digital currencies? Well, Anthem Vault founder Anthem Blanchard thinks he has the solution to this ongoing dilemma by backing each of his new Hayek coins with one gram of gold.

Blanchard believes that this may solve cryptocurrency’s inherent volatility problems while at the same time add much-needed stability to this very new currency realm.

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Although not the first to try some sort of “gold-backed” cryptocurrency, almost all of Blanchard’s predecessors fail at actually providing a true conversion between a fixed ratio of gold and their coins. Moreover, many of these new gold digital coins have appeared out of nowhere, and appear sketchy at best.

The upcoming Hayek coin appears to be a more sincere attempt, rather than some gimmick dreamed up by a few rebellious Ivy-league college dropouts in their parent’s basement.

Blanchard’s middle name is “Hayek,” so named after famed Austrian economist Friedrich August von Hayek. F.A. Hayek wrote The Road to Serfdom (1944), and is considered to be one of the greatest champions of free-market economics in history. Blanchard’s parents were apparently so heavily influenced by F.A. Hayek and his work that they named their son after him. His father, Jim Blanchard, is a gold activist and supporter of what is known today as Austrian economics.

The Hayek will be available for purchase beginning May 25.

The gold for each coin will be held in an Anthem Vault account. Anthem Vault has been around since 2011 and is an online bullion storage service with offices based in the U.S. state of Nevada, and an independent, world-class vaulting facility operator in Salt Lake City, Utah.

Transparency seems to be of the utmost importance to Anthem Vault as it uses a third-party auditing firm to perform a yearly audit on the company and storage facility. In addition, each time a gold bar is moved, there is an audit report filed. Gold bars are also sonically tested for purity and weight to ensure the highest quality, and are also insured against theft and natural disasters.

Hayek holders will be provided all the same protections offered to the company’s bullion holders, and the ease of transfer and exchange. The Hayek will be worth one gram of gold and will be stored in the same secure Salt Lake City vault. Hayek owners will be able to exchange their digital coins for physical gold and have that gold delivered to any location within the United States.

Admittedly, this is by far the most exciting concept I have heard of with regard to cryptocurrencies, and it will be interesting to see if Hayek raises the bar for digital currencies moving forward. Moreover, I am looking forward to see if something similar pops up in one of the gold centers scattered around Asia.