Banks are losing market share and profits to digital innovators daily. The current banking system is slow to adapt and these innovators quickly manoeuvre around it, as seen with Bitcoin and other cryptocurrencies.
The Bankcoin Reserve Coin was not created to compete with banks. This new product, amid countless uses, allows banks to adapt to and incorporate Bankcoin Reserve innovations via licensing agreements.
What makes it different from all other cryptocurrencies is that its value is derived from the tethering of the Bankcoin Reserve Coin to the ceiling market price of one troy ounce of gold over the previous month. That price becomes the floor price of the Coin for the next month. The Bankcoin Reserve Coin is a market price taker, not a market price maker, meaning the current gold price determines the price of the Coin.
The Bankcoin Reserve Coin is a high value/low volume instrument making it very attractive for use by banks, financial institutions and insurance companies. This solves problems associated with moving large asset or commodity value quickly, and at low cost. For example, one million Bankcoin Reserve Coin whose value, based on current prices, is USD 1.375 billion, could be moved from one country to another in a few seconds with a network fee of just 52 cents.
The Bankcoin Reserve Coin also has the unique ability to mint up to 10% of the principal amount held in its proprietary digital wallet. For example, holding 1,000 Bankcoin Reserve Coins, with a total value of USD 1.375 million, at its current price for twelve months, will result in a balance of 1,100 coins with a value of USD 1.5125 million, assuming the price of gold did not increase from its original price. Otherwise, the holding would reflect the appropriate change.
What could be perceived as interest earnings are defined as digital commodity earnings. In the USA and Australia, this definition is due to the classification made by the relevant government taxation entities.
Bankcoin Reserve uses a Proof-of-Stake (PoS) algorithm by which the Bankcoin Reserve Blockchain network aims to achieve distributed consensus. In a Proof-of-Stake based cryptocurrency, like the Bankcoin Reserve Coin, the creation of the next block is chosen via various combinations of random selection, quantity or age of the coins being held, also known as the stake. In contrast, the algorithm of Proof-of-Work (PoW) based cryptocurrencies, such as Bitcoin, uses computationally intensive puzzles to validate transactions and create new blocks.
One of the challenges in developing the Coin was to develop a system that could provide remedy for inherent flaws in the central banking system that often result in the eradication of a country’s sovereignty.