New gold-backed cryptocurrency “INNcoin” allows you to mine gold for free

July 18, 2014 17:37 UTC

Want to use your computer to mine for gold from the comfort of your own home? A new decentralized gold-backed cryptocoin called INNcoin was publicly released Wednesday by U.S. precious metals dealer Anthem Vault, and it allows you to do just that.

Other than the cost of personal resources used by your computer, the entire process is free and largely an educational and promotional experiment that Anthem is conducting in a proof-of-concept fashion – to both raise awareness and demonstrate how alternatives to the fiat system can work.

Officially named Independence Coin, InnCoin was developed by Newnote and is backed by 100 grams of physical gold stored in one of Anthem’s Salt Lake City vaults. It’s designed to have a 12 month lifespan, with all 10 million coins to be mined by July 2015. There are 50 coins per block and about 830,000 coins are mineable each month. Each coin is docked by 100,000th of a gram. And once you’ve mined some coins, you can send them to Anthem and receive credit for physical gold bullion.

Mining is done through a proof-of-work concept that runs on the x11 algorithm, which, at least for now, prevents the use of ASIC miners.

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The open-source mining and wallet software is available for download on Anthem’s site, and the company plans to release the source code on GitHub, along with the block chain, within the next week. Currently only Windows-compatible mining software is available for download, but the Mac version will be released within the next few days.

“This is largely a promotional effort,” Anthem Blanchard, founder and president of Anthem Vault, told CCN. Blanchard said he is a huge supporter of Bitcoin and the block chain technology, and believes that peer-to-peer cryptocurrency is vastly superior to any other medium of exchange in terms of the vehicle.

“If you have the ability to back something physically – if you are able to have the virtues of a cryptocurrency with the virtues of gold as a store of value – then it is a match made in heaven, because the big knock on gold has always been that it’s not practical to deal with in today’s financial system because it’s really cumbersome. If you wanted to make change from a gold coin or bars and sit there with a chisel and hammer, it’s just not practical in the digital world and I think that was a really big issue for gold for a number of years.”

Blanchard said that he hopes to provide redundancy to the banking system instead of becoming intertwined with bank credits, defaults and counterparty risks. Ideally, he envisions a system where every person can be their own central bank.

“Our longer term vision is to have a full service banking alternative,” said Blanchard. “The idea is to be able to offer all the same functions that a commercial bank can offer but without the credit risk that comes with bank accounting and touching a bank. We look at the fractional metal ownership portion as kind of the savings account equivalent.”

“We all have a vested stake in seeing that we have redundant currency systems and redundant financial services systems that aren’t anchored to banking systems that we know are incredibly over-levered and that run on fiat currencies that are going to eventually hyper-inflate. It’s in all of our best interests to figure out solutions to these problems.”

INNcoin is Anthem’s first step in a long precious metal-backed cryptocurrency plan. By September, Anthem hopes to have cryptocoins available for a variety of metals, ultimately allowing every person to be their own bank.

“All the coins will be in a single wallet with a metal attached to each coin, and we are planning to not only offer the usual precious metals, but also exotic strategic metals. I’d like to ultimately have a few dozen different metal coins that someone could have in their wallet, and basically someone could compile their own reserve currency. My vision is for everyone to be able to be their own central bank — for everyone to be able to be their own reserve currency. That’s the goal here.”

Blanchard said that Anthem is currently talking to a number of exchanges and while it’s not currently a major focus, he feels confident that INNcoin will be listed on at least a couple of exchanges. More focus will be shifted towards exchanges as the September launch date for the full suite of metal-backed cryptocoins approaches.

Featured image by Shutterstock.

Last modified: July 18, 2014 18:29 UTC

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