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Author Topic: How about gold-backed Stablecoins?  (Read 2715 times)

owej90

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How about gold-backed Stablecoins?
« on: June 10, 2019, 04:45:08 pm »
http://www.goldscape.net/gold-blog/gold-backed-cryptocurrency/

This list is old and not really updated, nevertheless I find it interesting, a lot of substantial infos in there.
I consider stablecoins as the second generation of cryptocurrencies, and I think commodity-backed stablecoins, in particular gold-backed ones, will play a major role among them.

They will play a major role a) among investors, the same ones interested in buying precious metals; b) among normal folks needing a stable currency while living in countries whose currency is subject to a relevant depreciation; c) within the economy and the financial industry, as their stability allow them to be deployed by institutional entities as a means of transfer and a store value.

There are many projects of gold-backed stablecoins, I believe DigixDao (Singapore), Novem (Lichtenstein), Xaurum (Slovenia), OneGram (Dubai/UAE), HelloGold (Malaysia) and Kinesis (Cayman Islands), just to name a few, are serious projects.

So, how about gold-backed Stablecoins?
« Last Edit: June 18, 2019, 10:48:48 am by owej90 »

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How about gold-backed Stablecoins?
« on: June 10, 2019, 04:45:08 pm »


owej90

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This is a comprehensive list of points to check out while pondering about investing in some gold-backed stablecoin

Due Diligence on Gold-Backed Stablecoins

1. Can the cryptocurrency be converted into physical gold on demand? How easy is the process?

2. Does the company disclose how it stores the gold?

3. Who is storing the gold that backs the cryptocurrency? Is that company trustworthy?

4. Is the gold insured?

5. Does the company have a well-known and reputable auditor? If the company is not audited, then it can easily issue more tokens than gold, thereby creating fractional reserves.

6. What happens if the company goes bankrupt? Is it a limited liability company that could leave investors empty-handed?

7. What blockchain are the gold tokens built on? Is that blockchain secure?

8. Do you know how to store the private key to the wallet that controls the gold tokens? What happens if you lose the key? What happens if the key is stolen?

9. Gold-backed cryptocurrencies are similar to ETFs, which may make them subject to securities laws in Europe and the US. Is the company selling the cryptocurrency regulated? Does it store the gold in a country that has approved their token?

10. Where can the gold-backed token be traded? Gold ETFs are traded on exchanges, but there are currently no cryptocurrency exchanges that are licensed to trade tokenized ETFs.

11. How much liquidity does the gold-backed cryptocurrency have? Can you really close a position in case of a liquidity trap? The largest gold-backed cryptocurrency, Digix Gold Token, has a small daily trading volume of USD 243,000 over the past year, and USD 27,000 over the past month.

12. What is the total expense ratio for the tokenized shares of the gold fund? The most famous gold ETF, SPDR Gold Shares, has a management expense ratio (total fund costs / total fund assets) of only 0.40%.

13. What is the business model of the coin? How do the people who created the coin make money? If there is not a clear way that they are profiting, then be suspicious of indirect costs or high risk.

https://ingoldwetrust.report/wp-content/uploads/2019/05/In-Gold-We-Trust-2019-Extended-Version-english.pdf
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owej90

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What are Stablecoins good for?

Reasons People Use Stablecoins

1. Exchanges: Cryptocurrency traders can reduce their exposure to Bitcoin by selling their Bitcoin for stablecoins. This allows traders to keep their wealth on an exchange without converting back into fiat. This is useful for two reasons. First, many exchanges take days to convert fiat into crypto, which means investors must wait to trade. Second, converting back into fiat means a tax bill is coming soon, since most exchange on- and off-ramps now require KYC-AML.

2. Inflation hedge: People in countries with high inflation and hyperinflation can hold on to stablecoins in order to preserve their savings. Bitcoin is too volatile for most people in Venezuela. Instead, they would prefer to hold onto cryptocurrencies backed by gold or Swiss francs.

3. Interbank settlement: Interbank settlement is a trillion-US dollar industry, as discussed in the chapter on Ripple in the June 2019 edition of the Crypto Research Report published by Incrementum. Instead of giving away billions in revenue to Ripple, companies such as J.P. Morgan are releasing their own centralized stablecoins backed by fiat in order to settle transactions globally on a permissioned blockchain instead of legacy banking software.

https://ingoldwetrust.report/wp-content/uploads/2019/05/In-Gold-We-Trust-2019-Extended-Version-english.pdf
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owej90

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Re: How about gold-backed Stablecoins?
« Reply #3 on: June 18, 2019, 03:29:14 pm »
Smithing Down The Gold-Backed Cryptocurrencies

Any cryptocurrency that is backed by a physical asset or anything of stable value will surely be considered a welcome move by both finance and technology. This is where the relevance and awesomeness of gold-backed cryptocurrency come in.

Defining Gold-Backed Cryptocurrency

As the name implies, gold-backed cryptocurrencies are digital currencies that are backed by the value of gold. This type of currencies brings the advantages of a distributed ledger system while retaining the value that is driven by precious metal.

Unlike the classical notion of cryptocurrency confined to Bitcoin and Ether, gold-backed coins have an intrinsic value, and quite akin to Stablecoins, it increases the reliability and dependability.

The Inglorious Past

There have always been instances where innovation has faced its share of resistance, and cryptocurrency was not an exception.

In fact, the first attempt in unifying gold and technology came in the form of e-gold 5 years before the new millennium was born. It has 5 million users before its abrupt shutdown in 2009. Following a lot of unsuccessful attempts in creating the perfect gold backed digital currency, Xaurum was launched in February 2015. The popularity of the bitcoin was a major factor in influencing this launch. However, after a shortlist time of glory, Xaurum fizzled out.

In recent times, thanks to the cryptocurrency boom, there has been a renewed interest in this asset-driven innovation. There have been a lot of new launches and even a few relaunches including Xaurum.

How does it work?

There are different ways in which different gold-backed cryptocurrencies work. However, the common attribute that encompasses all these currencies is that they are backed by a certain value of gold at launch.

Let us take the example of one gram. one gram was backed by one gram of gold at its launch. Every transaction generated a small fee which was reinvested in more gold. This would mean that the amount of gold that backs the coin keeps on increasing steadily, resulting in the real value of the coin increasing over time.

What Makes Gold-Backed Cryptocurrency Different?

On the surface, the key difference between other cryptocurrencies and gold-backed cryptocurrencies is that the later is backed by a physical entity of intrinsic value. Another difference lies in the pricing. Most of the cryptocurrencies can be bought for meager amounts. Gold backed cryptocurrencies, on the other hand, launch at the price of gold.

Another passive-yet-valuable advantage that these cryptocurrencies bring is that the price of a coin will never fall back below the value of the price of gold at any given time. If a particular gold backed cryptocurrency becomes popular, the price will only become greater than the value of gold.

https://www.blockchainappfactory.com/blog/smithing-down-the-gold-backed-cryptocurrencies/?utm_source=Reddit&utm_medium=Blog&utm_campaign=vignesh

owej90

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Re: How about gold-backed Stablecoins?
« Reply #4 on: June 20, 2019, 08:49:26 pm »
8 Reasons A Huge Gold-Mania Is About To Begin

No. 1: Basel III Moves Gold Closer to Officially Being Money Again
No. 2: Central Banks Are Buying Record Amounts of Gold
No. 3: Oil for Gold – China’s Golden Alternative
No. 4: The Fed’s Dramatic Capitulation
No. 5: Takeover Frenzy in the Gold Mining Industry
No. 6: President Trump Is Pro-Gold
No. 7: Socialism Is on the Rise

No. 8: Gold-Backed Cryptos – A Monetary Revolution

The last catalyst for gold is cryptocurrencies backed by gold.
There are dozens of gold-backed cryptos sprouting up.

Peter Grosskopf, the CEO of Sprott, recently called gold-backed cryptocurrencies “the most important thing to happen to the gold market in the last several decades.”
Soon after, Sprott launched a gold-backed crypto it developed with its partners.
When Sprott – a leader in the natural resources industry – makes a big move into the gold-backed crypto space, it’s a definitive sign of where things are headed.

Gold-backed cryptos combine the best attributes of gold and cryptos. I can’t think of two other asset classes that have as many synergies. In other words, the whole is worth much more than the sum of the parts.
With cryptos redeemable for gold, we can now instantly send anyone anywhere in the world small or large amounts of gold – reliably and without interference. It’s nothing short of a monetary revolution.

Gold-backed cryptos are going to make using gold as money even more convenient for the average person and business. Anyone with a cell phone now can use gold in a way that was not possible before.
This is another big reason why I think gold is coming back as money.

https://www.zerohedge.com/news/2019-06-19/8-reasons-huge-gold-mania-about-begin

IyemRoker

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Re: How about gold-backed Stablecoins?
« Reply #5 on: June 24, 2019, 10:31:07 am »
Like the OP must write this thread in the Announcement because the OP has a basis for the promotion of coins that are backed up with Gold.
How can I reply to this thread if all the information is provided by the OP. LOL
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