There are many assets that support cryptocurrencies. This diversity is part of what makes them so attractive. However, there has been a recent surge in gold-backed cryptocurrencies, such as Gold coin.
In this article, we are going to break down the assets backed by the precious yellow metal.
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Gold-backed cryptocurrencies in general
Before you get into it, note that gold-backed cryptocurrencies are not the end for everything. stable coins – cryptographic assets linked to the value of a physical commodity. On the one hand, these projects do not have as much liquidity as traditional gold markets. This is due to the fact that they are more niche than the traditional market.
That, and these groups have to prove their holdings. This is usually done through third party audits, which you will need to rely on. While there haven’t been any big stories of scams in the gold-backed crypto space yet, there have been plenty in the global crypto space.
Now, as with traditional gold, you wouldn’t invest in gold backed cryptos for short-term profit. Instead, the idea is to cover the economy, as one would with physical gold. These assets are not volatile, as they are tied to the price of physical gold.
This makes gold backed cryptos a fantastic investment for those who don’t like risk. Those looking for short-term profit, however, should steer clear.
GoldCoin is considered a stablecoin. Each GoldCoin is equal to 1 / 1000th of an ounce of gold. This means that you can invest in fractional amounts of gold rather than whole ounces. In addition to increasing the accessibility of gold investments, these assets are fully secured thanks to the Ethereum blockchain on which they are based.
This technology also ensures that you can store your assets without a problem. All your GoldCoin are stored in an Ethereum based cryptocurrency wallet of your choice. There is no charge for a safe to store them, nor a third party to monitor your assets.
Essentially, you are avoiding all of the painful steps required to traditionally invest in gold. With GoldCoin, you can invest without thinking too much about it. These factors also apply to other gold-backed cryptocurrencies, which you can convert as you wish. You can convert GoldCoin to any other cryptocurrency as you see fit.
More gold backed stablecoin:
Pax Gold (PAXG)
Pax Gold is a gold-backed cryptocurrency, with each asset linked to a fine troy ounce of gold. The project was launched by the Paxos blockchain network, which integrates all kinds of projects under its umbrella.
PAXG is a Ethereum based stablecoin. The project was regulated by the New York State Department of Financial Services. To further gain your trust, they also hire a “national ranking auditor” every month to prove the amount of gold held.
You can convert PAXG to different cryptocurrencies as you like or even swap your assets for physical bullion if you have enough.
Meld Gold is a project that has in partnership with the Algorand blockchain network. They work to make investing in gold more accessible than other types.
Allowing investors to invest money instantly, Meld Gold ensures that anyone can get involved. Otherwise, the project aims to work with local gold companies around the world, allowing residents to invest in digital.
Like other stablecoins backed by gold, each Meld Gold token represents one gram of gold bars. On top of that, the company operates out of Australia, where investors can exchange their Meld for physical bars.
Of course, the project is audited monthly by a third party, as are all the partners who work with Meld.
DGX is a Singapore based gold backed stablecoin. Each token represents 1 gram of physical gold, held in Singapore and Canada. Interestingly, the group reveals who audits them each month – the Bullion Association, which claims the holdings are accurate.
Unlike other projects, DigixGlobal allows anyone to search for their gold bars on the project website. This way, they can physically review their investment from the Internet. That, and anyone can invest in fractional amounts of the token if their budget allows.