BullionCoin

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billhilly
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BullionCoin

Welcome !

This is a forum to discuss BullionCoin and the ABX and BCX trading platforms. 

I am excited about this new PM backed currency concept and hope that together we can find success through the sharing of ideas and information. 

billhilly

billhilly
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response to process of purchasing BC...

Yes, I do believe that the most efficient method to create BC is to directly fund the ABX account and then purchase through them.  I was considering moving existing bars directly to them but the process of transport and refinement, along with the probable costs, seems inefficient.  I therefore will likely sell metals here in Canada and then simply wire the funds to the ABX account and from there "make me some BC's".   Also a hell of a lot quicker.  

The real question will be how quickly the sale of the actual BC's takes.  Will there be sufficient demand so that I can use the sale proceeds to repurchase more metals ?  I can then decide whether to hold them or make more BC's. 

boomer sooner
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Good thought

For an off main st chat location.  Thanks billhilly

Tried to open an account, but no go.  Hopefully David will show later and help out or I'll pm him.

Funding.  Not using current stash.  Only FRN's that are at risk in the digital world.  I like the idea from a peer to peer with the app.  I have several customers who may like an alternative place to park some funds in the metals sector but not have to store the metal.  I have a few Docs that would be I  for sure after I do the legwork.  One LCS is already scoping this thing out.

boomer sooner
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Bullioncoin

Thoughts on the return.

If you are a intro member, then you get commission on every trade of the coin thereafter?  The only way to reap the benefit is to trade the coins as soon as you get them.  If you wish to buy and hold, then buy some "new" coins.

As this is a trading platform, the greater the turnover, the greater the return.  Imagine if you were the Federal Reserve in 1913 and you were able to get a commission every time a dollar you had created changed hands (which they do to some extent).

I'm not sure what the commission is, .5% .1%?  At .1%, each coin you 'had' needs to exchange 10x to get 1% return.  100 is 10%, 1000x gets a new coin.  This is all speculation.  Are you paid the commission in fiat or BC?

Can you purchase 10 coins, sell them, then return the funds back to your bank?  If so, you can reap the reward of those 10 coins indefinitely?

Who will buy your coins?  I assume the first million, 10 million, 100 million will be of the origination, so until these are brought to life, will no one trade "old" coins.  How long will that take?  Will BC sell your bullion back to ABX and return funds?

Will there be a counter to tell how many coins are on the market?

Scenerio

Fund 10 coins @ $1250 ea + 1% premium ($12,500+1%).  10 coins are now in account for trade.  No one trades for your coins until 100,000,000 ($125,000,000,000) $125B) are produced.  Days, months, years?  Selling coins to $ to replenish bank account?  Leave a % in BC for trading.  

If the key is residual return, drain fiat account(s) and start as many BC as possible, then return funds as needed.

or

Buy one at a time, sell and see how it goes?

Gibbo
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Transferring existing metals into BullionCoins

The process/route your existing precious metals will take, depends upon:

  • How they were stored - secure vault (good) or unsecure i.e. home (not good)
  • Where they were bought from - retail (not good) / primary dealer or refinery (good)
  • Quality minimums - gold 9999, silver 999

It's all about guaranteeing the quality of what is vaulted and the metal backing BullionCoin. Anything that slips through that is not 100% will create a major confidence problem in BullionCoins, so things need to be strict.

If all is OK, then in most cases Brinks' will be able to do a like-for-like swap into the destination vault. That way you don't have to pay for international shipment.

If it's not up to spec, then your metals will have to be sent via a refinery to verify the metal content first.

If you can make a saving by cashing out of your metals and then repurchasing via BCX, then do so. But that is not a good idea if the prices are screaming higher as you will make a big loss. In an environment of rising metals prices, it may well be better to go the refining route so as not to let go of your physical.

Wait until you get your BCX account  and fund that rather than the ABX account as it will shorten the chain. Any metal you buy via ABX will need to be transferred to BCX first, to be converted into BullionCoins. Buying direct through BCX will reduce the time it takes to get BullionCoins and you'll also make a saving on the transport (which will be minor).

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Gibbo
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Opening an account

I've noticed that in the last few weeks that some people have been having issues with opening an ABX account. It's been reported to them and they are looking at why.

People have had a few issues using the IE browser.

This close to the launch, I would recommend waiting to open a BCX account (unless you also want an ABX account too). When it's made available, you'll be able to open your BCX accounts here: http://www.goldvu.com/bullioncoin-wallet.html

I'll keep the BCX brokerage fees low same as my ABX fees, which are the lowest of all ABX members as far as I'm aware. I want everyone to get the best value for money out of BullionCoin.

For anyone having issues with opening an account with GoldVu, then email me directly: dsgibson@goldvu.com

(Please don't post my email on open/non-password locked sites as it will be picked up on by scanning robots and I'll be smashed with spam angry)

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Gibbo
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BullionCoin Yield

The amount of money you make is linked with the velocity of your coins. BullionCoin have tried to design a currency that has high velocity.

Bitcoin has around 4% velocity, so it's clearly not being used as a transactional currency

Tether, which is 1:1 backed with USD, has a velocity of 90-95%

The first year or so of BullionCoin is anticipated to have a velocity of 20-30%, which will grow with its increasing adoption. BullionCoin reckon you could be looking at a yield of around 7% in that first year.

Everyone will have their own way to trade the creation / selling / buying process.

The standard fees on transactions are 0.25% of the value. Of that:

Founding investors will get 0.10% locked into their coins as revenue each time that coin is transacted

After the founding investment window closes, standard investors will then get 0.05% locked into their coins

BullionCoin will get the remainder.

As the fee is deducted as BullionCoins from the BullionCoin Wallets, all payments will be in BullionCoin, not fiat. So you will be earning a free income of physical gold and silver for the lifetime that your coins are in circulation.

When you sell any coins, your wallet will be credited with cash which you can then wire back to your bank.

You can start selling your coins into the secondary market straightaway. As far as I am aware there is no minimum amount needs to be created before you can sell them and for people to use them.

I have no idea if BullionCoin will provide a counter on the coins created or not. Nice idea.

For the purchase amounts of physical in the BCX primary market, there are 4 contracts:

  • Gold; 10 kilos or 100 grams
  • Silver; 500 kilos or 5 kilos

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MrC
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Forgive me for being dumb but

Forgive me for being dumb but i am a bit confused and have a few questsions as i can't get my head around it.

1. When i've "created" BullionCoins at the BCX and sell them to the secondary market what do i have then, cash? metals equal value to what i sold? or just a claim on the coin so i can get it back and out of circulation at a point of my choosing? 

2. How long will the founding deal be avalible for?

3. So there are four contract sizes, if i want to create for example silver coins i need to buy atleast 5KG worth of silver to create coins with?

4. Why would i want to have an ABX account as opposed to only the BCX account?

Gibbo
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BullionCoin Q's

MrC, nothing wrong with questions :)

The thing to keep in mind is that a BullionCoin is the Title Deed / Title of Ownership to the vaulted metal, which is in an electronic format that has been designed to be easily sent to anyone else over a computer network (P2P, internet etc.).

So when you sell a BullionCoin, the receiver of it is now the new owner of the gold or silver it represents. You, as the seller no longer have any claim to it as it now belongs to someone else as their private property.

However, the creator of the coin will be entitled to a portion of the transaction fee that their coins are involved in. They do not have any further claim on their coin beyond that once it's sold on.

So to answer your questions:

1. When you sell your BullionCoins into the secondary market, you will get back cash + a % premium > the premium being the difference between your wholesale (primary mkt) cost and retail (secondary mkt) BullionCoin rate.

2. The founding investment window will be open for several weeks. However, all BullionCoins created will have the founding rate of 0.10% yield locked into them for the life of that coin's existence.

After the founding window closes, all new BullionCoins created thereafter will only get 0.05% locked into them.

So if you want to enjoy double the yield rate for life, make sure you create as many BullionCoins during that initial founding investment window.

3. Yes, you can only buy in whole contract sizes on the BCX primary market. The smallest sizes are 5 kilos of silver and 100 grams for gold.

4. It's best to consider ABX accounts for long-term storage / savings accounts and BCX as more like a current accounts where you keep your money on a short to med-term basis.

Pre-BCX launch, I recommended people to open an ABX account as they will:

a) Get a BCX assigned to them automatically when the BCX launches

b) Be able to take advantage of the recent price dip and load up on gold/silver which they can then transfer to BCX. I told people that the price will likely have rebounded by launch so by opening an ABX a/c and buying pm early, they will then be able to make a profit over had they waited to BCX launch.

If you think there is going to be a price spike before you can buy through BCX, then consider going via the ABX route and then transfer your physical once BCX is up and running.

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simjojim
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Gibbo

Let me put forward a scenario.

1. I buy the minimum physical gold contract of 100 grams with my dollars.

2. 100 grams allows me to create 100 ßcoins.

3. I then offer these ßcoins for sale.

4. As each ßcoin is sold my account gets credited with the dollar value of the ßcoin. (dollar value of 1 gram gold)

5. If all my coins are sold then my initial dollar outlay becomes whole again. (less account fees, etc and price movements + or - )

6. The only claim I have on those sold ßcoins is a 0.1% fee every time they are traded for the life of the ßcoin.

7. I understand that if the ßcoins I created that have been sold then the current owner can redeem them for physical metal.  If this is done then the ßcoins are extinguished.

8. So that's the end to my 0.1% fees.

9. Is redemption the only way a ßcoin can be extinguished?

10. So worst case is you can't sell the ßcoins you created and you are stuck with them.

11. So you just redeem them for physical.  Apart from fees and price fluctuations, you may be up or down a bit.

12. Or all the ßcoins you have a fee claim to have been redeemed and no longer exist.

13. Well so what, just create more?  (only at 0.05% fee)

Cheers.

RETSPY
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Initial Bullion Coin Demand

Billhilly's 4:20 am post cited the relationship to the Post Office of Indonesia.

A while back, there was news that a Council of Muslim leaders had approved buying and selling of gold, not withstanding the prohibition on usury.

Indonesia is a Muslim country with a very large Islamic population.

Would Bullion Coin also be designed to be attractive to an agrarian population (land rich; not big fiat rich).

Or, is this just speculation?

Whatever, I'm getting ready to come aboard.

This Gibbs looks forward to dealing with The Gibson. 

billhilly
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great scenario simjojim...

Yes, those are my questions exactly. 

If I have no control over the extinguishment of my coins then I can be out in the cold as soon as they get sold into the secondary market.  And if after the initial founding period I have to create more then I am losing out on the better rate. 

I am not understanding then the idea of "Lifetime/Generational" income.  Unless of course I am granted the "founding investor" rate throughout my lifetime on any future creation of BC's.  So, anytime I have my current coins extinguished, I can then create new ones and be "grandfathered" in to the founders rate.

Otherwise, this seems like a big circle-jerk.  Am I missing something here ? 

And what would stop some BIG institutions (Central banks etc) from coming in and buying massive amounts of BC's and extinguishing them for delivery of the phyzz ?, again leaving us out in the cold.  

And Gibbo, a HUGE thanks for the efforts you are making here !!!!!  It must be very time consuming answering all these questions and I/we are deeply appreciative !!!!

billhilly
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additional question Gibbo...

I have 2 large (850-ish ounce) Royal Canadian Mint (RCM) .999 silver bars, and 1, 1-Kilo RCM .9999 Gold bar.  Are these two items able to be directly deposited or would they have to undergo refinement ?  They are personal possessions held by me here in Canada.

Thanks

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Redeeming BullionCoins

The only way to lose your revenue will be if the coin gets redeemed for the gold / silver in the vault. At that point your right to yield for that coin ceases.

Whilst, yes, some of your coins will get redeemed, I doubt that it will be all of them.

So whilst the ratio of coins you've created at 0.1% in comparison to any created at 0.05% will decrease over time due to redemptions, it's still a case of it being better to have some at the 0.1% rate than all at 0.05%.

Therefore to improve your on-going yields as much as possible, it's therefore better to create as many BullionCoins during the founding window as possible. Attrition is inevitable and it's just a bummer if it's your 0.1% coin that gets redeemed, not someone else's.

Furthermore, the more people that join after the 0.1% launch window then the ratio of 0.1 :0.05 coins will be diluted reducing the probability of your coin getting redeemed.

You as an individual don't get locked into a founding rate, only the coins. So there is no grandfathering of rates once the founding investment window closes.

I don't think institutions will take delivery of them as the BullionCoins in the secondary market will be priced at retail rates. If they want physical, then they will buy from ABX's wholesale markets. So I don't see that as being a likely scenario.

Most of the redemptions at the start will be just people testing the system to see it is true and not some scam.

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Gibbo
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Islamic use

I don't know if BullionCoin is Sharia compliant. I would think it is as one of the co-founders (Abdulrahman) has a substantial gold business based in Lebanon.

All those Asian countries (Muslim & non) are big on gold and silver. Once the population understand what BullionCoin is, they'll be all over it. As both BullionCoin varieties go to 4 decimal places, then it is well within the financial reach of the rural populations.

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Gibbo
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Depositing Metal

Gold is much easier to verify than silver.

Your gold might be alright pending an assay, your silver not so much. This is because they have been kept in your personal possession where it could have been tampered with.

One possible way to avoid refinement, if required, is to take them back to a primary dealer and get it swapped for their in-house certified bullion that has been securely held. It will then need to then be held by them until they are collected by Brinks.

It's a case of trying to find ways to turn your stash into certified securely vaulted physical acceptable to BullionCoin that can then be directly deposited into BullionCoin's vault. Why pay for refining & shipping if you can possibly avoid it?

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MrC
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many thanks gibbo that

many thanks gibbo that cleared up all questsions i had yes

will founders also get the debit card? All i could found was "This will be initially given for free to high value accounts only, due to the cost of issuing the card" what counts as high value? smiley

boomer sooner
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ABX

Thanks David for the information.  Checked email this morning and found an email confirmation from Metal Desk.  I have not gone father than to open email and look around at the info necessary for opening an account.

billhilly
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strategy...

So lets discuss strategy here. 

Let's say we are interested in being a founding member.  We would then desire for the BC's that we create to NOT be extinguished.  So does it make sense to "create" the BC's and hold them in our personal wallets until after the "founding" period passes ?  After this then, all the other coins being created are receiving the lower rate and would be diluting the market volume of "original" coins, thereby reducing the chances one of our precious originals would get extinguished.  By holding on to these "originals" (yes we lose the fees we might be receiving) until there is greater dilution (simply a matter of weeks?) are we then not poised for a better life expectancy of them ?

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revelation...

...okay, I just figured out that by holding the BC's I will not be able to create more "originals" from the proceeds which the sale of the originals produced. 

In theory, could we not continually turn over the proceeds from our sales of "originals" (presuming the retail market is purchasing them) and create more "originals"  ?  Hmmm, if all of us were doing this it could get crazy because we have to take the proceeds ($$$) and purchase metals contracts, then turn that into BC's and hope they get purchased in the retail market.  Rinse and repeat. 

If the demand is there to take on all the supply then I can see where AM's 250 mt potential is.   More hmmmm.....

billhilly
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another idea I've had...

...is that maybe this "Investor" period will be a "create" only time period where the BC's are not available to be sold into the retail market.  It would seem that this could limit volatility.  Just taking stabs in the dark here.  It'll be interesting to read the White paper and find out more specifics on the whole process.

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