The Runit: The Gold-Backed Cryptocurrency of Mars | Red Eden Codex
The runit, short for resource unit, abbreviated RU, is the currency of Mars. It is a cryptocurrency based on the Hashgraph algorithm. It functions as a distributed public ledger that keeps track of every transaction made on each runit. Each runit is backed by a fixed unit of gold, which could be interchanged with silver, platinum, palladium or a host of other metals based on their exchange rate with gold. Runits can only be added into digital circulation by a bank when somebody physically deposits gold into that bank. When somebody redeems a runit for gold, that runit is removed from digital circulation and ceases to exist.
The Hashgraph algorithm allows each runit to be traced back to the original bank in which it was created. In fact, every transaction associated with every runit can be traced.
Whenever a bank’s client makes a digital withdrawal of runits, for example into a personal digital wallet, the runits will exit the bank account but the physical gold will stay in the vault. In this way, Martians do not require a bank account to hold runits. All they need is a personal digital wallet, and they can spend and receive runits directly from their wallets. At any point, a holder of runits can redeem their runits for physical gold. Because each runit can be traced back to its original bank, that specific bank is held liable for dispensing the gold.
If a bank does not have enough gold in its vault when clients redeem their runits, that bank would be investigated for fraud and/or mismanagement, and if found guilty, the directing officers of the bank would be held liable for replacing the gold. The following are scenarios where the amount of gold in a bank vault might not match the number of runits issued by that bank:
1) A fraudulent bank issues runits into circulation without ever having received a corresponding quantity of gold.
2) A burglar robs a bank. If the burglar isn’t caught, the bank is liable for replacing the gold.
3) A bank issues more than one runit for every corresponding weight of gold it has in its vault. This practice is called fractional reserve banking and is treated as fraud.
Because each runit can be traced back to its original bank, holders of runits can tell which runits belong to what bank. In this way, it is possible for certain runits to be more trustworthy than others based on the issuing bank’s reputation.
Banks can make money in the following ways:
1) A one-time deposit/withdrawal fee per unit of gold deposited or withdrawn.
2) Commission charged on investments. Clients wire their runits to the bank and the bank plays the market. Runits and their corresponding quantity of gold are locked down and cannot be withdrawn until cashed out of the various markets.
3) Recurring secure storage fees. Banks store gold in a vault and protect against theft. This is a service that doesn't come free. As such, the bank may issue runits that have a built-in recurring charge wherein a small fraction of a percent is automatically wired back to the bank once every month. Percentages may vary depending on the bank, with some charging no recurring fee and others charging upwards of 1% per annum.
Some might be leery of using runits because of privacy concerns. As each transaction leaves a digital trail, it is possible to see how exactly each runit was spent by its previous owners. These privacy concerns can be circumvented in the following ways:
1) Use of anonymous public wallets
2) Digital washing services wherein the runits are randomly reassigned to other users of this service, and the runits are re-deposited into the anonymous wallets of each user.
3) Cash-in cash-out technique. Here, the holder of a runit redeems the runit for gold then immediately re-deposits that gold, incurring a deposit fee. The freshly issued runit would have zero transactions in its history and can be deposited into an anonymous wallet, providing the bank doesn’t record any personal information.
4) Deal only in physical gold.
In summary, runits function much like the gold-backed bank notes of centuries past but with several key advantages. Runits are more convenient, faster and cheaper to transfer across long distances, harder to steal, and nigh impossible to counterfeit. Furthermore, runits can be traced, making it much more difficult for banks to get away with excessive fractional reserve lending. Martians have been using the runit as their currency for over two hundred years, and in that time, the value of the runit has remained exactly the same: one runit for one unit of gold.
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