The failure of fiat
For many of us, our interest in crypto currencies is related to our disillusionment with the fiat system. Whilst it is debatable as to whether crypto currencies represent a complete departure from the negatives of printed money, most of us would agree that decentralisation and 24/7 peer-to-peer trading are good things. Even if the crypto market crashes, cryptos and blockchain tech are here to stay.
We all know that cryptos are dependent upon the platform other technologies provide. If we lose internet access, we lose the ability to trade our crypto. (I do realise that it is unlikely that will occur any time soon. They will certainly not shut down the internet simply because of the threat cryptos may pose to the powers that be. If you wanna put forward arguments as to why they might, be my guest.)
Precious metals, on the other hand, do not depend upon the internet (or an alternative network) to be traded. They too have their own disadvantages, such as the fact that sending it to the other side of the world takes days or weeks and can be stolen or lost in transit, whereas crypto can be sent within seconds or minutes. Locally however, precious metals can be exchanged just as readily as the notes and coins we use now; provided others are willing to accept them.
So is it possible to return to a precious metal backed (I favor silver) economy at a local level, at least partially? Whilst it is a nice idea, I honestly doubt most of us will actually see such a thing come to pass. But that might chance as confidence in fiat could continue to dwindle. And for some of you out there it could be a present possibility worth exploring.
The challenge of cities
The reason I doubt most of us will be able to move to a precious metal backed economy, even partially, is that most of us live in large cities. Large urban centres, despite masses of people inhabiting them, do not have the sense of community that smaller cities, towns and villages do. Its success depends upon the type of community you live in; its pre-existing level of social cohesion, its community access and participation points, its business community, your own network of contacts, reputation, social skills and so on.
In a large city environment, it might have a chance of succeeding if a bartering or skill sharing community group already exists. Many cities have community markets that meet regularly and have a large variety of stalls and sellers that sell food, clothing, electronics, second-hand goods and so on. Such markets are the best opportunity I can think of for getting precious metals accepted, circulating and for generating interest in them in large cities. This could also provide an opportunity for precious metals dealers and other service providers to set up shop.
Hold or trade
Perhaps the most difficult obstacle to overcome is the fact that most people who are buying precious metals today are doing so only to store wealth and/or as an investment. Holding precious metals provide a sense of security; their value will persist through the crash of financial markets and fiat currencies and the closure of banks. They are not thinking about how metals can make a return to our everyday lives in the present, but instead preparing for a disaster scenario, a post-apocalyptic world in which money is burnt to provide warmth to crazed raiders and their mutated dogs.
Getting started
The following are some ideas I’ve had as to how a person might start or participate in a metals sub-economy.
Build a community or a small business
- Start a local community group around precious metals and/or related interests
- Mint coins smaller than 1oz. Certify them somehow (purity and authenticity).
- Have multiple members of the group express their desire to make purchases using metals to local businesses.
- Warning: never reveal your amount of holdings or storage location. Keep most of your stash in a highly secure location(s).
Start a crypto and precious metals swap meet and market, or join an existing one
- Only trade small amounts to prevent attracting criminal elements, or at least keep yourself protected.
- Sell a portion of your metal coins to get it circulating or at least held among the good people there. Try selling coins above market price, given that people aren’t paying shipping, to make it worth your while (the ethics and legality of this I’ll leave to you).
Ask businesses you use on a regular basis whether they’ll accept precious metals, or find those that will
- Talk to the business owner. Cashiers and other such workers cannot make executive decisions on such things as accepting metals.
- Even if you can talk to the owner, never underestimate stubbornness.
If you do find a business that’ll accept metals
- If your total purchase is less than the silver-to-dollar amount, purchase extra items to make up for the shortfall.
- Be willing to spend fiat alongside metals. This can help to sweeten the deal.
- If you’re not willing to make up the difference with fiat, be willing to lose a dollar. Conversely, the seller might be willing to lose a dollar if they themselves consider fiat to be lesser than precious metals.
Accept metals payments for your own goods and services
- You could offer discounts or other deals for metals payments.
- This could increase your customer base if metals have a following in your area or as metals increase in popularity.
- Ditto for cryptos, if you can stomach the volatility.
Obviously the downside of all of this is the compromise of the relative anonymity you can have on the internet.
So those are some ideas I’ve had. If I lived in a smaller city, or a more close-knit community, I think it could work (provided my own coin supply was substantial enough, or I had a bunch of like-minded friends).
Have your say
Have you ever been able to trade metals for goods and services successfully?
What do you think is the biggest hindrance to a metals economy (or sub-economy) being successful in your own community?
Do you think other less precious metals could be coined and used for this purpose? Which metals do you think would be viable?
What other alternatives are there to help defend your future from the dangers of fiat?
This is my first Steemit contribution. Thanks for reading!