Digital gold currency
Risks
Digital gold currency is a form of commodity money as deposits are stored in gold units rather than fiat currency. The purchasing power of DGC therefore fluctuates in relation to the gold price. If the price of gold increases, then an account becomes more valuable, but if the price of gold falls, so does the value of the account.
There are no specific financial regulations governing DGC providers, so they operate under self-regulation. DGC providers are not banks and therefore do not need to comply with bank regulations. However the Global Digital Currency Association (GDCA), which was founded in 2002, is a non-profit association of online currency operators, exchangers, merchants and users. The GDCA is an example of the DGC industry's attempt at self-regulation. On their website they claim their goal is to "further the interests of the industry as a whole and help with fighting fraud and other illegal activities, arbitrate disputes and act as escrow agent when and where required." [1] Of the eight DGC providers, only Pecunix and Liberty Reserve have become members of the association.
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Currency
Modern currencies
To find out which currency is used in a particular country, start at the countries of the world or look at the table of historical exchange rates.
Nowadays ISO have introduced a system, ISO 4217, using three-letter codes to define currency (as opposed to simple names or currency signs), in order to remove the confusion that there are dozens of currencies called the dollar and many called the franc. Even the pound is used in nearly a dozen different countries, all, of course, with wildly differing values. In general, the three-letter code uses the ISO 3166-1 country code for the first two letters and the first letter of the name of the currency (D for dollar, for instance) as the third letter.
The International Monetary Fund uses a variant system when referring to national currencies.
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Precious stones
A gemstone is prized especially for great beauty or perfection so appearance is almost always the most important attribute of gemstones. Characteristics that make a stone beautiful or desirable are colour, unusual optical phenomena within the stone, an interesting inclusion such as a fossil, rarity, and sometimes the form of the natural crystal. Diamond is prized highly as a gemstone since it is the hardest naturally occurring substance known and is able to reflect light with fire and sparkle when faceted. However, diamonds are far from rare with millions of carats mined each year.
Traditionally, common gemstones were classified into precious stones (cardinal gems) and semi-precious stones. The former category was largely determined by a history of ecclesiastical, devotional or ceremonial use and rarity. Only five types of gemstones were considered precious: diamond, ruby, sapphire, emerald, and amethyst. In current usage by gemologists, all gems are considered precious, although four of the five original "cardinal gems" (excluding the now-common amethyst) are usually—but not always—the most valuable.
Rare or unusual gemstones, generally meant to include those gemstones which occur so infrequently in gem quality that they are scarcely known except to connoisseurs, include andalusite, axinite, cassiterite, clinohumite and iolite.
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Gold standard
Effects of gold-backed currency
The commitment to maintain gold convertibility tightly restrains credit creation. Credit creation by banking entities under a gold standard threatens the convertibility of the notes they have issued, and consequently leads to undesirable gold outflows from that bank. The result of a failure of confidence produces a run on the specie basis, which is generally responded to by the bankers suspending specie payments. Hence, notes circulating in any “partial” gold standard will either be redeemed for their face value of gold (which would be higher than its actual value) — this constitutes a “bank run;” or the market value of such notes will be viewed as less than a gold coin representing the same amount.
The text above is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article "Gold standard"