Investors have turned to gold over the centuries for use as a stable store of value and as a liquid asset, especially in times of economic trouble. Gold still has a place in the modern economy due to its limited supply, collectible desirability, and usage across a variety of manufacturing processes. Stablecoins backed by the gold endeavor to bridge the gap between the traditional financial world and crypto.
By giving investors the ability to purchase ‘digital’ gold with the option to redeem for physical bullion, gold-backed stablecoins offer investors versatility. They can diversify their investments into the world of virtual currency without the concerns of wild price fluctuations since bullion-backed stablecoins are tied to the spot price of the precious metal.
GoldCoin.com is one cryptocurrency backed by gold. The coin is built on the ERC-20 standard, and the project’s team stylizes the offering as one that allows users to buy gold safely, securely, and anonymously. But does GoldCoin stand apart from the variety of other gold-backed cryptocurrencies on the market? Does the coin have any unique attributes that make it a particularly enticing investment choice? Keep reading for a greater understanding of the gold-backed cryptocurrency.
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The Basics Of GoldCoin
Each offered coin is backed by 1/1000th of an ounce of 99.9% pure gold bullion. The project’s team says bullion is secured in vaults and is audited by a professional entity. A PDF of the report is able to be viewed and downloaded on the GoldCoin website.
The cryptocurrency is built on the Ethereum network and powered by a GoldCoin-specific smart contract. As a result, the coin is able to be stored in any ERC-20 supported wallet. Options include Metamask, Guarda Wallet, Exodus, and the popular Ledger and Trezor hardware wallets.
The cryptocurrency is presented as a private asset, meaning users do not have to present identification to purchase the coin. A prospective holder needs a viable Ethereum wallet address to ensure they can receive the gold-backed cryptocurrency upon purchase. The private purchasing nature of the coin is an advantage to investors eager to keep their supply of bullion (and crypto) hidden.
A Clear-Cut Redemption Process
One of the allures of gold-backed cryptocurrency is the opportunity to redeem coins for physical gold bullion. GoldCoin users can log in to their account and begin the redemption process via the project’s website. Holders are able to redeem 1,000 coins for an ounce of 99.9% physical bullion.
To initiate the redemption process, the project’s website instructs holders to send GoldCoin to a specific Ethereum address. A purchase order is initiated once the crypto is received, prompting the user to validate their identity. Verification is to make sure the account holder is the only person allowed to pick up the physical bullion at the appropriate GoldCoin storage facility.
Once verification is complete, the coin holder will be provided with the bullion pick-up facility’s contact information and address. Users are instructed to bring their identification and any supporting documents to validate the redemption order and receive their physical bullion.
The Boom Of Gold-Backed Cryptocurrencies
Gold-backed cryptocurrencies continue to rise in popularity, fuelled by increased interest in bullion over the past decade. Gold often rises in value amid economic uncertainty, and especially if consumer confidence is rattled. In 2009, the Producer Price Index (PPI) for gold jumped 12.8%. The PPI more than doubled overall from 2008-2012.
Gold prices also usually rise when fiat currencies experience turmoil. Summer 2020 brought the U.S. Dollar to nearly a two-year low against the Euro. Some argue gold’s scarcity, lack of counterparty risk, and status as a non-inflationary asset makes it a viable candidate to be tokenized in the world of cryptocurrency.
Speculation is gold-backed cryptocurrencies could be an enticing choice for investors who might be looking to add ‘traditional’ assets to crypto portfolios. They might also shape up to be an alluring choice for people interested in cheaper or more creative ways to securely invest in gold, without having to worry about the safety and security of physical gold bullion.
GoldCoin – A Secure Way To Purchase Gold
Overall, GoldCoin’s security and redemption measures present investors with an intriguing option to purchase digital currency with the option to redeem for physical bullion. Those interested in learning more about the project should visit the official website to discover more about this coin and the use case it offers.