With Karatbars and the KaratGold Coin, Harald Seiz has realized his vision of a future-oriented currency. As Managing Director of Karatbars, he and his partners Josip Heit and Ovidiu Toma lead an international team that has set themselves the goal of nothing less but a financial revolution. With the creation of the KaratGold Coin, the historically first crypto currency backed up by physical gold reserves, the entrepreneur combines the resilience of the world’s most sought-after precious metal with one of the most important recent technologies. The ambitions that drove Harald Seiz when he founded Karatbars in 2011 haven’t changed over the course of years: Enabling people so they reach financial security and independence.
With more than 500,000 members, the Karatbars community is growing rapidly and now spans across all continents. But what are the reasons for thousands of years of fascination for gold? What are its advantages over today’s bank notes?
Gold as Currency: Impeccable Advantages
In contrast to today’s money, gold historically was one of the first currencies with a global presence and was able to assert itself over thousands of years. Thanks to its rarity and imposing appearance, gold has always been an object of desire for the rich and beautiful in societies. It comes as no surprise that Croesus very early established gold coins as a means of payment around the 6th century BC. Their durability and sturdiness as well as the weight were convincing criteria gold coins serving as the primary choice of payment for almost two and a half thousand years after their introduction.
Golden Medieval Times
What had been an advantage for the longest time turned into a disadvantage when humanity reached middle age: Due to its high weight, it was difficult to make larger gold payments on an international level with it. Transport costs, security concerns as well as the time factor favoured the idea of bank notes. Since goldsmiths were often paid to check the authenticity of gold, they traditionally had secure storage facilities for the valuable commodity. Many gold owners also wanted the same level of security, so more and more of them began to also store their gold in those safe spaces. Once it got stored, the owners received receipts issued for the amount deposited, which turned into unofficial means of payment in daily life. Due to the secure values they stood for, the receipts were widely accepted and could easily be passed on to third parties. Goldsmiths thus functioned as precursors of today’s central banks. At that time, the promissory notes that served as currency were still one hundred per cent backed up by gold reserves.
Introduction of the US dollar and gold in the world trading system
Although the first deposit standard was based on silver, the turning point in the history of gold as dominant currency was the introduction of the US dollar in 1785. Back then and as a result of the famous Coinage Act, it was fully backed by gold so that everyone would be able to exchange their dollars for gold. Thanks to its weight and value, gold as the most expensive precious metal was easy to store.
Fiat Currencies versus Gold: Comparatively Young History
The financial success of the US dollar caused many countries to build up dollar reserves in order to back up their own currencies. In consequence, the amount of dollar bank notes circulating abroad rose quickly. However, when after the second world war the US economy started to stumble, other countries lost confidence. Many foreign governments exchanged their dollars into gold. To avoid illiquidity, president Richard Nixon eventually lifted the exchange guarantee between US dollar and gold in 1971. Many other nations followed his example and introduced the paper money standard instead. The decision marked the end of the gold standard in its original form and allowed countries to increase national debt and inflation by increasing the number of circulating bank notes. The abandonment of the gold standard today is seen as a turning point in the history of world economy.
Karatbars: The Safe Exit from Paper Money
With Karatbars, visionary Harald Seiz takes an unconventional path that challenges the global finance industry: Rather than relying on the stability of paper currencies, he and his business partners Josip Heit and Ovidiu Toma created the KaratGold Coin, the first digital currency with a gold standard. By leveraging innovative technologies such as K-Merchant and the K1 Impulse Phone, Karatbars is gradually creating an ecosystem that enables people to become independent from financial institutions and fragile paper money.