Disclaimer – I am long silver/miners and have a small position in a gold/silver/BTC/ETH backed crypto called Kinesis. The intention of this writing is NOT for investment purposes – but for education and discussion purposes. I am not a paid promoter of Kinesis, although I recently won a KVT as part of “Citizens 4 Sound Money” initiative recognizing me as a voice for sound money. This is NOT a paid piece and I do NOT expect any compensation from that initiative or Kinesis for this article. HOWEVER – with a KVT, if Kinesis does what is expected, I will receive significant compensation the rest of my life if full adoption of this system takes off. So take the below as me being a fanboy of Kinesis and accidentally stumbled into a prize along the way. I am NOT paid by Kinesis.
TLDR for the goldfish and squirrels – Kinesis is a crypto backed by gold/silver/ETH/BTC that can solve the problems of gold, silver, and BTC.
I don’t want to do a massively tired debate of gold versus bitcoin – as I feel Saylor and Giustra covered a lot of that ground for me. I wrote articles bashing BOTH GOLD AND BITCOIN so we can identify risks. When you are thinking about futurism with this – what PROBLEMS are you trying to solve? What I wrote about gold showed you cannot buy anything online with it. Likewise, I trashed bitcoin to then show that there’s nothing backing it and has no relative price to anything and as a store of wealth, it never has seen a recession to test that THEORY. I am a SOUND money guy who LIKES gold, but also likes the idea of portability with bitcoin and other forms of crypto.
Instead, I wanted to ask you – the reader – what BENEFITS does each have? IF we were to look at the PROBLEMS both had – what benefits do each have that a solution to those problems could FIX?
Big picture is bitcoin has an electronic component for accounting and purchasing. Gold is MONEY, and has been for 5,000 years. What if you combined the BEST of both worlds, and had a crypto that has BOTH the electronic component portability AND backing of gold?
One thing that Saylor said that makes a lot of sense – IF there are 5 billion investment grade gold ounces on the planet and IF you had 8 billion people on the planet, PHYSICAL gold doesn’t make much sense as money. I can’t agree more – IF you are talking about physically holding gold. Giustra didn’t have a good argument against this and no one contemplated dividing this up using crypto, and while I love Daniela – she also didn’t inject this into the debate. I’m assuming the idea was to stick with the swim lanes of gold and bitcoin only.
But Saylor missed what Kinesis can do. Whether he doesn’t know about it, or doesn’t want to tell you about it, imagine there was a vault with 5 billion ounces of gold. Each ounce of gold, down the road, could be worth $200,000 to account for all debts when pegged to gold. This is not a made up number. Simply take all debt and divide by gold – this gets you in the ballpark. Maybe it’s $160,000 today or $220,000. Point is, it is many times higher than the current gold price.
Now, you obviously have people in third world countries that could not afford one ounce of gold. And, you would have many affluent people having thousands or millions of ounces hoarding it. But what if I could take that one ounce and divide it by a quadrillion or so and use that as currency?
In my writings, I talk about gold is the center of the financial solar system
What you see with the geocentric model on the right (fiat) is that fiat has NO RELATIVE VALUE to goods and services, and the more they TRY to do this, the more they lose control of the system. Which is why our “free market” today is no longer free. It is simply non-elected bureaucrats picking winners and losers. That is a whole other article – but the point is that to try and have a FIAT system as the center – causes problems with relative valuing of goods – which want to be valued in gold. Period. End of story.
So it MAKES SENSE for everyone to PRICE EVERYTHING in gold. And using crypto, it’s very easy to divide this out. This is what both Saylor and Giustra either didn’t know about, understand, or want to discuss.
For example, if one ounce of gold is $200,000 in USD today, most things start to get re-priced to the upside immediately. Since most items have been priced in gold, and gold has been suppressed by the printing of the dollar you will then have a lot of commodities rise drastically in price overnight. Not just gold. Copper, lumber, pork – everything will skyrocket to re-value. It’s ok – because it will be priced in gold – not dollars. The USD value might shoot up, but not the price – in gold.
As I have shown in my 6 part series, everything over 5,000 years has essentially been priced relative to gold and follows almost a sine wave-like pattern. To me, this is the release of financial energy. Our fiat experiment starting in 1971 has led us to today.
And one big issue you have with bitcoin itself, which is completely not talked about, is it is not actually anything of value or utility and it’s only value is priced in a floating dollar against other baskets of currencies – which gives you the same geocentric problem above. Most people who buy it, buy it because “it’s going up in price” without respect to understanding what exactly it is. Meaning – there’s no price relative to tangible goods, ONLY to what the last person paid for it. Therefore, if the dollar collapsed overnight, the value of your bitcoin would as well. However, everything is priced relative to gold – and therefore no matter what the next currency system is, pricing will then all be priced – relevant to gold.
The above is oil priced in grams of gold. Whatever currency system you stand up, you will then first find a relative value to that currency in gold, and then EVERYTHING ELSE will be priced accordingly. There is no such thing as a “price in bitcoin” of relativity. And whatever new currency system that is stood up at some point will look towards value in gold – not bitcoin.
If we just completely skip that next fiat altogether and price things in gold, we can then use a crypto to just buy a tank of gas for .33 of a gram of gold. Or whatever that turns out to be with decimals in ounces. I figure to be REAL money, things will need to be priced in grams of gold because ounces are “too big” of a store of value.
This can also lead silver back to being money as well. If you only have 5b ounces of gold, perhaps if silver was re-priced accordingly, much of the 60b ounces above ground COULD make their way towards a monetary supply. For example, if we went back to the 5,000 year formula of 15:1 gold to silver ratio, that would then mean in USD that silver would be $13,333 an ounce. Remember – this is a nominal figure. If gold is repriced up 100x to meet debt levels, this also means a gallon of gas goes up 100x to perhaps $300 per gallon. It means a loaf of bread is $400. So don’t bash me on the $13,333 per ounce of silver. Everything is priced in USD RELATIVE TO GOLD.
It’s all relative based on gold/silver VALUE to other things. In that situation, silver would go up 4x from now, essentially, in value. If the G/S ratio is 68:1 now and goes to 15:1, it’s about a 4x or so move up in VALUE terms.
Now imagine an economy where everything was priced in gold and silver?
A tank of gas will always be .33g of gold, or perhaps 5g of silver. There will be a 10-20% fluctuation with this number over the years, as you see above. But prices for the next thousand years will then always have this gallon of gas roughly .26-.4g of gold or 4-6g of silver. Always. Forever. Prices will fluctuate in gold.
This is the stability that a crypto backed by gold and silver will give you. Since 1915, our dollar has lost 98% of its value in gold. And that’s what Kinesis promises us – to keep a currency tether to gold, with the portability of bitcoin. It can give governments the ability to directly trade without fears of any nation sanctioning a reserve currency. For the most part, it could remove a lot of that banking middle tier. And – all taxes could be at the point of sale (POS). Paychecks could also have grams of gold and/or silver removed from it directly.
It has the benefit of both gold AND bitcoin – AND solves MOST of the problems of both gold and bitcoin (Carrington event is bad for anything electronic). Let that sink in.
Jewels of financial energy as our future currency
Now – if gold and silver are at the backend – does it make sense to pay in gold OR silver? For example, at checkout – you have a card. Does it matter if the price is .33g of gold or 5g of silver? No – which is why I called these “jewels” of financial energy.
The new currency system can be 1 jewel. This could be EITHER .067g of gold OR 1g of silver. Right now, a gram of silver is roughly $1.20 – but I re-valued silver 4x, so 1 gram is about $5 in today’s money in silver. You, as the owner of these jewels, could then take physical possession if you wanted, at some point. However, for security purposes, it would not make sense for people to hold large stores of wealth in physical, at their home. I could then see PHYSICAL units of currency in silver like – “5, 10, or 20 jewels” and you can have paper currency as well, if you choose, which could be as small as fractions of jewels.
These vaults would be constantly audited. Transparency in the system would then allow for more trust, and people would be more willing to store their gold and silver with this bank.
The banks, like Kinesis, are paid a transaction fee which accounts for all overhead of storage. While current debit card transaction could cost a merchant 3%, these transactions would be a fraction of that, perhaps .5%. Merchants then get the rest of that back into their pockets.
Why are merchants now trying to accept bitcoin? Because of $1T invested into bitcoin. A merchant cannot hold bitcoin, they would need to immediately convert to cash for accounting purposes.
In this new world, all countries are using gold and silver, with this all stored in their regional vaults. Nation states may then deposit metals into perhaps a country like Switzerland so they could be a form of escrow. Basel, Switzerland could become the arbiter of all debts between nations – as they will hold the gold/silver on deposit. Instantly, nations could then buy/sell goods with stores on deposit using this crypto.
Ask yourself the WEAKNESS of gold and bitcoin? What problem does a Kinesis resolve?
Bitcoin – not backed by anything
Gold – too dense of a store, and not easily divisible for payment
With Kinesis, you have KAG/KAU that can pay for things, with a debit card, now. You can also import BTC and ETH and use them if you want to try Kinesis.
Imagine a day when fiat currencies are not used anymore? Prices of things are in jewels. A tank of gasoline would be 5 jewels, give or take a jewel.
With sound money, we envision a day where governments do not outspend their budgets. We have found that throughout history, governments may tend to make war and spend on massive projects with money they do not have – which always leads to debasement of currency. By having a strict “gold standard” it limits the ability of government – ANY government – to make war.
Additionally, in my pieces – I also mention how payment in fiat to employees over 40 years has not kept up with inflation. This has led our country over that time to be a debtor nation instead of a creditor nation.
What I am showing here is that a promise to pay someone in jewels will always yield approximately the same amounts of goods and services in those jewels. Meaning, if today you make 10 jewels an hour, and it costs you 5 jewels to fill up your tank of gas – in 40 years, if you are working the same job, you will still make 10 jewels an hour and a tank of gas will still cost 5 jewels (remember I re-valued silver by 4x).
If you have tracked me so far, please look at the above. Study it carefully. Everyone constantly needs more DOLLARS per hour because INFLATION is OUTPACING the DOLLARS they pay you.
With a metals backed system, essentially the metals increase at about the same rate as the population. You cannot just “turn on” mining production. Silver is also a strategic metal, and I feel by re-valuing it to 15:1 of gold, this also improves the ability to get more of the jewelry at home into the system as well as encourage recycling efforts on perhaps 30 billion ounces of silver lost in products and in dumps worldwide.
The US constitution deems gold and silver as money. To me, Kinesis allows this to happen in the current digital age and solves all of the problems that both gold and bitcoin have individually. As a kicker – if you have bitcoin, you can use this in Kinesis as well.
So with this – I believe FAIRNESS can happen again with PRICE DISCOVERY and allow FREE markets to reign superior.
I went over the risks of gold and bitcoin, and there are a few risks below which I wanted to touch on. YOU need to determine YOUR risks with YOUR financial advisors – NOT me. I’m telling you what problems I think this solves, and I’m also sharing concerns some people might have with it, at this time.
Wide adoption – recently I saw Kinesis went over $200m usage in a day. However, it is not widely known at this time and part of the reason for this article was I wanted to let people know there are things out there that solve the gold/bitcoin shortcomings.
Going out of business – I saw someone blast how big the team was in a picture of like 20 people. Almost spit my coffee out because I’ve worked for companies that have 175,000 people. Where your debit card might have transaction fees of 3% or so, Kinesis I believe has a .44% transaction fee. These fees help go to back office items. However, what happens if no one really uses it? I saw a post that a third party company would be able to hand dissolution of assets. Kinesis has ALLOCATED gold and silver, supposedly, so this is actually sitting in multiple vaults and audited. As adoption of this grows, the staff will grow.
Other cryptos like Lode – what if Lode becomes widespread and is used as the metals-backed crypto of choice? To me, it seems you should be able to either get your gold/silver sent to you, you can spend down what you have on a debit card to zero, or you could cash out your position to then buy into another product. Your kinesis account HOLDS gold/silver/ETH/BTC. Bitcoin itself is only valued on a bid system. For argument’s sake, IF there was some major security hole discovered in bitcoin, everyone would pile for the exits. Your bitcoin would not be worth $55,000. It might be worth nothing, if NO ONE is willing to buy it. This is different than Kinesis in that the value of your Kinesis MONEY is the underlying asset. Therefore – Kinesis itself cannot go to zero because you are buying the underlying asset. Kinesis is a way to SPEND it and SEND it. Meaning, I can buy something from my buddy by sending him fractional silver in Kinesis.
(Edit here – If prices are in jewels and multiple companies have the ability to transact in jewels, Lode and Kinesis could be like mastercard and Visa. You don’t need one or the other, there can be competition. Perhaps this drives transaction costs lower. Competition is GOOD!!)
Nation states making illegal – I think what worries me MOSTLY about ANY crypto is that it is TOO GOOD and competes with NATION STATES. Right now, you have countries like Turkey, China, Russia, India, Myanmar – and many others at odds with BTC. If you have a situation like Kinesis and a country wants to outlaw its usage, my GUESS is you can simply cash out of Kinesis or get your gold/silver sent to you. Someone (not to be mentioned) I saw on Twitter pulled 200 ounces off, then turned around and was able to deposit 200 ounces into Kinesis. This is ALSO appealing to me, in that perhaps if silver goes up to $75, maybe I don’t want to have to lug silver to a coin dealer or mail it to Apmex. Maybe if I have a PORTION of my silver on deposit I could easily sell if I wanted to.
Size – do I want to add mass amounts to Kinesis right now? No. It’s still pretty early on. I might move a small position in with them now and maybe send some generic 10oz bars there to deposit. Unclear of what liability insurance they have at this point in case they are hacked or the company goes up in a poof of smoke. I think over TIME, with enough people putting smaller positions in and gaining trust with the platform, this then allows growth and adoption organically.
April 29, 2021 at 4:03 pm
Kinesis, based on their audit from Nov.2020, owns the following PM-s
Holding Description – Gold Quantity
Gold 1Kg Swiss Bar – 0.9999 Fineness 1
Gold 100g Swiss Bar – 0.9999 Fineness 2
Total of all Gold Items 3
Holding Description – Silver Quantity
Silver 1000oz Bar – 0.999 Fineness 60
Total of all Silver Items 60
This means they have (had) 1.2 kg of Gold in their vaults. Wow.
April 30, 2021 at 5:18 am
I think you checked the audit of only one vault, they have many. Scroll all the way down the audit:
Click to access kinesis_audit_november_2020.pdf
April 30, 2021 at 6:17 pm
you are right. I corrected that in my Twitter. But the total numbers are still miniscule:
p.3 is Loomis, p.6 is Malca Amit , etc. Yes, I have not seen other pages. So, in total, there is 147.6 kg of Au and 13,007 kg of Ag. My mistake. The numbers are still small IMO.
Kinesis in yr 1 projected to be $1.5B mkt cap. Au = $8.5M , Ag =$10.9M. $19.4M vs $1.5B? Do not match the projected business model size (see here: https://kinesis.money/resources/kinesis-blueprint-en.pdf ). How to reconcile this?
April 29, 2021 at 6:15 pm
several questions about Kinesis business model. Can’t find satisfactory answers.
Kinesis Money : questions about the business model.
1. Last audit (Octâ20). Very low numbers of stored PM-s. After 2 yrs in business? Is there a newer audit? What are the amounts of stored PM-s?
2. None of the tokens (KAU, KAG, KTV) trade on any crypto exchange. So how is Kinesis exchanging their tokens into ETH/ BTC? Do they buy ETH/BTC into the Treasury and âmanuallyâ exchange them? https://coinranking.com/coin/zb4dxKZvb82Xd+kinesisvelocitytoken-kvt
Why, after 2 yrs, KTV is not present on any crypto exchange? https://neironix.io/cryptocurrency/kinesis_velocity_token ?
3. Executives and Directors at Kinesis: none, based on CV-s has any expertise in crypto technologies. Who provides this type of expertise to Kinesis?
4. Itâs quite confusing: certain announcements arrive from Cayman Islands, some from Australia, and Kinesis claims to be in London as well. Which business is where and why? Is this for tax reasons, legal reasons, non-traceability reasons?
5. Who is the custodian of Kinesis? (PMs vs Cryptos).
6. Is there an updated status on KVT?
7. I try to digest Kinesis Blueprint document. In yr 1 , itâs supposed to have $1.5B mkt cap (p.40). Did that materialize? https://kinesis.money/kvt-calculator/ What is the current US$ value per KVT? Why, again, it does not trade on âpublicâ exchange â so the âprojectedâ valuation can be validated?
8. How is Kinesis insured and by whom, in case it implodes and people disappear in Cayman Islands?
On Thu, Apr 29, 2021 at 10:28 AM Renaissancemen.org wrote:
> natefishpa posted: ” Disclaimer â I am long silver/miners and have > a small position in a gold/silver/BTC/ETH backed crypto called Kinesis. The > intention of this writing is NOT for investment purposes â but for > education and discussion purposes. I am not a paid promoter of K” >