Gold and Blockchain: A Budding Financial Romance at the Perfect Time
Cointelegraph By Rob Odell's original article for cointelegraph.com reduced by 53%
Although the easiest way to invest in gold today is through gold futures, exchange-traded funds or mining stocks, gold is usually bought under the assumption that it will act as a hedge against broad economic instability. Many financial advisors suggest purchasing gold bullion instead of so-called "Paper" gold because the physical metal itself is not inextricably tied to the financial system. Owning gold bullion comes with its fair share of inconveniences: physical gold is bulky and cumbersome, it's not easily divisible nor is it easy to transport.
How do you know that the gold held in a vault is real and not counterfeit and that the people managing your gold aren't exploiting their contract? It's no one's liability, as there's no centralized authority for gold. PAX Gold - recently cleared by New York's Department of Financial Services - as well as Digix Gold Tokens from Singapore and OneGram are all digital representations of gold that is tied to physical gold optionally held by a bank or third party, but the record of gold ownership will always show how much an individual owns, and that cannot be negated. To create a gold smart contract - first, a bullion exchange or mint certifies that a piece of gold held in its vault has a guaranteed purity of 99.9%.
This certificate is then insured against the plethora of damages or liabilities that could ensue, virtually guaranteeing that the certified value of gold will be backed in the event of any unforeseen events. By leveraging blockchain technology, gold can be traded on cryptocurrency exchanges, opening new markets for the gold industry.
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CN [too long; didn’t read]
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