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Gold-Backed Cryptocurrencies: Icing On An Already Tasty Cake?

Gold-Backed Cryptocurrencies: Icing On An Already Tasty Cake?

The blockchain has discovered gold (or gold has discovered the blockchain). Either way, this means several things.
 


First, the decades-long dream of a gold-backed cybercurrency may finally be realized. Second, gold and probably silver are looking at a big new source of physical demand. Third, the huge number of gold-related initial coin offerings (ICOs) in this largely unregulated pipeline will require buyers to learn how to tell the legitimate offerings from the scams.

Two probably-legitimate examples:
UK’s Royal Mint Launches Gold-Backed Cryptocurrency

(Cointelegraph) – The UK’s Royal Mint, the institution responsible for producing all the physical money the country has for circulation, has announced the launch of its own gold-backed cryptocurrency.
 
The Blockchain-based coin, called Royal Mint Gold (RMG), is a digital representation of gold stored in The Royal Mint vault.

The Royal Mint Bullion, the Royal Mint company that sells physical gold, is the first company to allow customers to hold gold-backed assets on Blockchain, Tom Coghill, RMG’s Commercial Lead, stated in an interview with Express.co.uk. Coghill also mentioned that one RMG coin is equal to one gram of gold, adding that “it’s real gold you’re holding when you’re holding our RMG.”

A recent report published by the World Gold Council (WGC) compared Bitcoin and gold, declaring that though Bitcoin saw a higher growth in value in 2017, gold would remain an important store-of-value investment.

Coghill claimed that Bitcoin investments are more uncertain than investments in gold:

“Gold has probably had an argument that it’s been a store of value for 6,000 years, bitcoin’s a bit younger and the future of bitcoin is uncertain.”
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Cryptocurrency backed by gold being developed by Perth Mint to entice investors back to precious metals

(ABC) – Australia’s biggest gold refiner, the Perth Mint, is developing its own cryptocurrency backed by physical precious metals.
 
The ambitious plan, which is subject to a confidentiality agreement, will make it easier for consumers to buy gold.

The mint also plans to make use of blockchain technology, first used as the core component of the digital currency Bitcoin, where it works as a public ledger for transactions.

In the 10 years since its inception, blockchain has been used to track transactions in industries from agriculture to land registration and the music recording industry.

For the Perth Mint, the need to bring investors back to precious metals after a boom in alternative investments such as cryptocurrencies posed an opportunity, according to chief executive Richard Hayes.

“I think as the world moves through times of increasing uncertainty, you’re seeing people look for alternate offerings,” he said.

“And you’re seeing this massive flow of funds into the likes of Bitcoin at the moment because people are looking for something outside of the traditional investments.”

But Mr Hayes said the volatility of some of the current cryptocurrencies meant they did not suit all investors.

And that is where a gold-backed offering may fit.

“With a crypto-gold or a crypto-precious metals offering, what you will see is that gold is actually backing it,” Mr Hayes said.

“So it will have all the benefits of something that is on a distributed ledger that settles very, very quickly, that is easy to trade, but is actually backed by precious metals, so there is actually something behind it, something backing it.”
Some thoughts on gold-backed cryptocurrencies (or tokens or whatever the correct term ends up being):

Continued: https://www.zerohedge.com/news/2018-02- ... tasty-cake