What Is Gold-Backed Cryptocurrency?

In this article, we will be studying the topic “What Is Gold-Backed Cryptocurrency?. Also, we will look at the topic’s relationship with cryptocurrency backed by gold, list of Gold crypto currency, what are Gold stablecoins, Uses of Gold Stablecoins, etc.

This is a coin or token that has similar worth with gold. This is to say, that a gram of gold is equivalent to one coin.

Meaning Of Gold-Backed Cryptocurrency


Evidently, it is a token that has its base on gold. The value of gold-backed cryptocurrency is directly proportional to the worth of gold. Therefore, this identical worth should be available in safeguard spaces. Also, a credible caretaker can take care of it as an actual collateralized resource.

The linking of a cryptocurrency to gold is really beneficial. This is due to the prospective nature of gold. In the same vein, it maintains price stability of the coin. However, most gold-backed cryptocurrencies run as ERC-20 standard. Some tokens do not follow this trend. Example is the Paxos’ PAX Gold.

  • In recent times, investors value backing their assets or coins on gold and other valuable resources. This way, the don’t endanger their account unlike other backings with weak currencies.
  • But, note that computerized renditions of gold serve a good purpose. It can be cut into bits and little units. After that, they disperse it to an alternative body. Consequently, gold-backed cryptocurrencies faces some fundamental issues. Therefore, we shall look at them squarely.
  • There is low exchange level, resulting to low liquidity.
  • • Authentification of stores and gold sponsorship.
  • • a reliance on focal parties. Meanwhile, this contradicts the goal of cryptocurrencies, which is decentralization.
  • Currently, there are five key gold-backed cryptocurrencies. They are : Paxos Gold (PAXG); Perth Mint Gold Token (PMGT); Digix Global (DGX); Tie Gold (XAUT); and Meld Gold by Algorand.

Gold stablecoins: Should you put resources into the most recent cryptocurrency fad?

New Delhi: Another name for gold-backed token is gold stablecoins. They are undoubtedly, the most recent prevailing fashion among cryptocurrency investors. Consequently, this is due to their recent act of excellence.

PAX Gold and Tether Gold are all famous in this category. Also, the are part of the top 300 cryptocurrency tokens. This information is from market capitalization. One the other hand, there is a little rivalry between the value of the two tokens. Nevertheless, their price value reaches an appreciable level. Most importantly, the expansion of the bullion’s appeal, made room for the high token demand. However, this is because of the strain between Russia and Ukraine.

More Info On Gold Stablecoins

Some altcoins attach theirself to Gold. That means, the value of Gold affects them directly. On account of PAXG, each token is upheld by one fine official ounce (t oz) of a 400 oz London Good Delivery gold bar, put away in Brink’s vaults. Some advantages of this coins include simplicity of interest in gold. This is through an elective digital way. Also, no problems connected with saving of actual gold. We can attribute this to high security.

Dileep Seinberg, Founder and CEO, Thinkchain all made a revelation that the historical backdrop of crypto and gold returns to its underlying origination. On the other hand, Szabo in 1998, made a design of the first decentralized digital currency. It gave a name to the currency which is “Bit Gold”. However, they rarely carry it out. So, it has been known as an immediate forerunner to the Bitcoin design.

This made Seinberg to give his opinion saying that, the coins linkage to gold will be of maximum benefit to it.

Gold stablecoins vs Currency

Here, we shall determine if there is any relationship between the two. However, the basis of the basic resources they are tethered to, both are distinct.

The US currency fluctuations are usually minor on a daily basis. The is to say, that the use of currency-pegged stablecoins are preferable. However, this is according to Vikram Subburaj, CEO of Giottus Crypto Exchange.

Subsequently, stablecoins with gold affiliation gives out a better way investing in gold. That is why most investors who deal on the fluid nature of Gold will pick such.

Application Of Gold Stablecoins.

It is certain that one can apply a gold stablecoin where the don’t value fiat currencies.

Gold-backed stablecoins are a good choice for investors looking to broaden their assets. Also, looking to maintain value steadiness. People made use of gold as a form of stability or assurance.

Obvious dangers

The Gold-backed tokens may have a lot of prospects. But, the redemption process isn’t always as simple.

As there is a low turn out of auditing strategies, the holding company faces a lot of trials. Also, there is a regulation on the backing of gold.

Plethora of DeFi is known for linking with dollar-pegged stablecoins. However, it doesn’t follow follow the gold-pegged stablecoins.

There is a new breed of cryptocurrency that utilizes risk. It is also overpowering a market that is a victim of inflation and war. In the same vein, gold-backed coins are the modern form of stablecoins. Consequently, the have their base on gold to reduce price fluctuations.

In addition, it is on record that Pax Gold (PAXG) has an appreciation 7.4 % in 2022. On the other hand, Tether Gold appreciated by 8.5%. Due to this, Bitcoin has a loss of approximately 13%. On the other hand, 20% of ether was lost.

Newbies to cryptocurrency worry about it being unbacked. Everett Milkman believes that if they are in sync with a valuable physical asset, it will be more logical.

When people clamour for gold to sync their coins, it is understandable. It is to main coin stability. However, this is a fresh concept.

In recent times, stablecoins have become scalable. Traders and investors utilize it very well. As a result, its utility is very convenient. That is why exchanging a stablecoin for any cryptocurrency is stress free.

Prestigious and big investors now adopt Tether Gold. They utilize this tokens to swap their assets for Gold. However, not all of the investors keyed into crypto. Those who saw the need, backed their assets to gold.

In as much as the gold-backed tokens have nice prospect, it is still new. The likes of PAXG and Tether Gold, have an appreciable value.

The transaction of PAX gold attains a value between $10-520 million. On the other hand, ether volume gained between $8.7-25 million. All this happened in the space of months. However, those tethers with dollar backing, makes between $35-92 billion with 24 hours.

More Information On PAXG and Tether gold.

People have the narrative that PAXG and Tether Gold con have surged on the backs of a gold rush. They always keep tabs on gold. Approximately, its appreciation is up by 8.5%. This is higher than that of PAXG which is 4.5%.


State Street Global Advisors manages the SPDR Gold Shares exchange-traded fund. Consequently, its appreciation is by 7.6% in current stats.
It is difficult to alter the (crypto gold) tokens. Meanwhile, they are basically IOUs are function on blockchain. Alex Thorn also have a similar opinion with this. He also believes that there should be a clear declaration of interest by investors. This is pertaining to the companies that are backing PAXG and Gold ETF.

One can’t regard them as an authentic gold extension. So, to trust the companies being them solely a personal decision. However, there are people who speak good of it. They believe, it is convenient and less stressful to back it. One wouldn’t need more than 0.01 ounce of gold to start the PAXG investment. Unlike the huge amount paid in SPDR Gold ETF. Stablecoins have a hand in the authenticity of cryptocurrency. Although the major challenge of cryptocurrency is unstable value. That is why most coins have a link with stable assets to avoid high volatility.

A Directive On Gold-Backed Cryptocurrency

A physical and valuable asset is the principal focus of gold-backed cryptocurrency. This way, the token prices are stable. Tether is arguably the biggest stablecoin. It has its backing on USD. But, one will ask, why not Gold. Well, statistically, after fiat currency, like USD comes Gold.

On the other hand, people attribute Bitcoin to the rank of Gold. This is simply because of its appreciable value. Also, Bitcoin was on the same rank with Gold as of 2017. But then, the idea of gold-backed cryptocurrencies hasn’t really grown.

All About Digital Gold Currency

It isn’t today that the use of digital gold currency for settling payments began. As far back as 1995 did EGold emerge. Statistically, it was the first digital asset to have its backing on gold. It was widely acceptable by people, although it didn’t last long.

Developers consistently seek to bring more digital currency with gold backing. But with the introduction or blockchain and Bitcoin, this took a new shape. Now, the demand to create various digital gold currencies on the high.

For every token, there is an equivalent value of gold. Certainly, a third party has the role of saving the gold. However, various coin traders can transact with it. The good thing is, that the value of the gold influences the coin’s value. But in a situation where the cryptocurrency gains ground, then the coin can appreciate even more than the gold. Nothing less than this, everything remains the same.

Possible Challenges

Keeping traces of stored gold could be a problem. That is why it is advisable to carry out proper research on the gold. This way, one can get vital information concerning it.

On this note, we recommend BullionVault as a good choice of gold storage. Also, it is advisable to own the gold you wish to use for any backing. One can lose all asset-backed on the gold if the ownership of the gold isn’t legal.

Gold-backed cryptocurrency guide

The directory contains all the gold-backed cryptocurrencies. However, note that you still need to check them out before putting your money in it. Refer all questions to their customer care section.

Tradable Gold-backed cryptocurrencies

We will look at some transactional abilities of some gold-backed tokens. It is important to note that some platforms don’t list some of this tokens. Now, if you have interest in the tokens below, proceed to their site and know all about them.

AABB Gold

Name: AABB Gold (AABBG) Location: USA.

Website: aabbgoldtoken.com

Asia Broadband, Inc. created the AABB Gold (AABBG) token as an ERC-20 token on the Ethereum network. Each AABBG token is worth 0.1 grams of gold, and all tokens are 100% backed by genuine gold. Tokens can be traded through the AABB Wallet, which is available on both the Google Play Store and the Apple App Store.

Anthem Gold

Name: ANTHEM (AGLD)

Location: USA.

Website: anthemgold.com

Anthem Gold is an Anthem Vault Inc cryptocurrency. Each ANTHEM (AGLD) is fully insured and backed by one gram of actual gold. In April of this year, the AGLD token went live. The Anthem Gold Edge Wallet allows you to buy AGLD.

Aurus

Name: AurusGOLD (AWG)

Location: Cardiff, UK.

Website: aurus.io

The token AurusGOLD (AWG) has its base on Gold. So, for each AWG token, it is backed by one gram of 99.99% LBMA-accredited gold. However, they developers insure and audit the vaults. AurusDeFi holders receive 50% of AWG fees (AWX).

Exchanges with AWG CEX.IO

Bigboys Industry

Name: Bigboys Industry (BBI) Location:

Website: bbi.is

VEWC’s Bigboys Industry BBI coin is a gold mining initiative with an open protocol (Via East West Capital). Its is important to note that BBI tokens represent the value of physical gold in various gold mine . At any confirmed partner bank, investors can exchange these tokens for gold. Note: Generally, people regard BigBoys Industry as the pioneers of tokenized gold mining.

BlockNote

Name: BlockNote (BNO) Location: Tallinn, Estonia.

Website: blocknote.gold

In this section, we know BlockNote is under regulation. It is also a cryptocurrency that is 100% linked with gold. Each BlockNote is worth 0.01g and they deposit it in the client’s gold deposit account. Physical investment gold is purchased from an LBMA member in the United Kingdom, and it is vaulted and insured in Zurich, Switzerland.

Do you know that BlockNote is geared by BlockBen? It is proprietary blockchain technology. However, the platform functions as a couple of financial resources. They can fall under the category of secure database structure, a blockchain or a virtual wallet. More so, it could be an infrastructure, a transaction and smart contract validation system.

Exchanges with BNO

BlockBenPay Wallet

BlockStock

Name: BlockStock (BSO) Location: Tallinn, Estonia.

Website: blockstock.gold

BlockStock is the technical cryptocurrency used by BlockBen for transaction validation. The initial gold backing for BlockStock is 10%, with future increase coming from transaction fees on the BlockBen platform commissions. The system credits commission in gold and deposits it in a shared gold pool that will be distributed equally among BlockStocks.

What exchange does BSO Work With?

BlockBenPay Wallet

CACHE

Name: CACHE.

Location: Singapore.

Website: cache.gold

The worth of both one CACHE Gold token and one gram of gold are the same. The gold which serves as a base for the tokens, is put in a storage vessel. Meanwhile, the gold is authenticated and ran under insurance. To obtain any verification of CACHE Gold tokens, check out CACHE Explorer.

Cash Telex

Name: Cash Telex (CTLX) Location: Gibraltar.

Website: cashtelex.com

A wide range of assets can be useful to Cash Telex (CTLX coin) for backing. Examples are gold, diamond, silver and real estate, etc.

Exchanges with CTLX

Cash Telex Exchange

DGLD

Name: DGLD (DGLD)

Location: Switzerland. Website: dgld.ch

For every 1/10 ounce, owned by gold equals a DGLD token.

Most importantly, a prestigious association LBMA, made a certification of London Good Delivery gold. The PAMP’s Swiss vaults contain it. After the creation of a direct gold, then it is sent to the DGLD wallet. The board of DGLD inventors from CoinShares, Blockchain, and MKS are all amazing.

See the List of things to learn.

  1. Blockchain Technology
  2. Defi
  3. NFTs
  4. DAOs
  5. Crypto
  6. Web 3.0
  7. Altcoin Tokenomics
  8. Metaverse
  9. Smart Contracts

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