Ten years ago an alternative to the Federal Reserve Note (modern version of the U.S. Dollar) was introduced and the man behind the initiative, Bernard Von NotHaus, named it the Liberty Dollar. As part of the initiative silver certificates and silver coins were produced with values based on the value of 1 troy ounce of silver. As time went by, the value of these silver certificates and silver coins appreciated while at the same time Federal Reserve Notes were steadily depreciating in value.
The system was ingenious as it permitted silver to fluctuate while day-to-day transactions were not being affected. They system worked so well that in the next decade the value increased by a whopping 500 percent.
Even though the Liberty Dollar was not ideal, it offered an acceptable alternative to an already sick Federal Reserve System. One of the flaws in the system was that there was not a national database of all the merchants who participated in the system. Rob Gray joined this alternative and quickly identified this flaw and took it upon himself to address the issue. He decided to develop his own currency.
While looking for an acceptable mint, Gray found out that other people were too looking for alternative systems. He came across many other systems that were loosely based on the Liberty Dollar system. While strategies differed somewhat, the same formula was used to value the currencies.
It soon became evident that while groups were competing with each other, it would benefit every organization if every currency was successful. The ultimate objective of alternative currencies is to help silver become a common vehicle of exchange. Currencies that succeed would be able to get the message across and this means that other currencies that follow suit can expect to obtain the same results. Merchants would then be able to trade with each other on this basis.
Thus, give the above; currencies are able to compete with each other under the banner of “Complimentary Private Competing Currencies.” This is a good strategy as the competition helps to further the mission to make the mission successful.
Currently the American Open Currency Standard (AOCS) traders are able to exchange a silver piece valued as “50” for 1 troy ounce of fine silver (denoted as 999 fine). Merchants are therefore prepared to barter goods or services to the tune of $50 for a 1 troy ounce AOCS Silver Round. This statement prompts the question why merchants would trade on this basis when silver is not valued at this amount?
People who trade must offer value for value in one or other shape or form. Take a $10 note and ask people what it is worth and most people will answer that it is worth $10. The reality however is that a $10 note is merely a piece of paper with some ink on it and it is therefore not worth anything near $10. In fact, it has little if any intrinsic value. The currency of the $10 note however is valued at $10 because you are able to buy $10 worth of goods in exchange for the $10 note. Another reason that it is worth $10, is that the Federal Reserve Bank declares it legal tender and people can pay their debts and taxes with this money. AOCS silver currency is valuable in the sense that it can be exchanged for silver with a merchant and is representative of honest money so to speak. Traders are now able to trade value for value instead of using debt money that is doomed to failure.