How The Blockchain Will Be Used To Mine For Precious Metals

Way back when, investment used to be a much more simplified process. Transactions used to be simple and the currency was standard. As society has developed, the need for precious metals as currency, such as gold and silver has reduced massively. With the reduction in precious metal currency, came a reduction in the amount of people investing in jewellery, simply because more attractive investment opportunities have developed in time, property, stocks, cryptocurrency etc. Perhaps the blockchain revolution has damaged the jewellery and arts industries, lets face it, why would you invest in an antique that you cannot track, when instead you could invest in a live token that tells you when the prime time to sell is? Australian firm ‘Perth Mint’ (despite their name, they are not toothpaste manufacturers) have outlined a plan to make use of the blockchain revolution to get people to start re-investing in precious metals. They believe that physical ‘gold’ based cryptocurrencies would not be as volatile as their digital counterparts, according to ABC Australia, Richard Hayes the CEO of Perth Mint has argued that:

"With a crypto-gold or a crypto-precious metal offering, what you will see is that gold is actually backing it. 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."

"If you use precious metals to back something on blockchain or something that is allied to blockchain, it retains its intrinsic value, unlike the offerings from Bitcoin and Ethereum, which really rely on everyone believing that there's something behind it."

He is certain that a cryptocurrency backed by something of inherent value, such as gold or silver will not depreciate in value as randomly as standard cryptocurrency does, simply because precious metals have a baseline intrinsic value that is not affected by digital stocks etc. According to moneymetals.com, 1g of Gold is currently valued at $42.89. Over the past year, the value of gold has teetered between $38.00 and $43.00 per gram, over the past 5 years it’s moved between $34.00 and $46.00 per gram, suggesting that actually it’s value is set at a certain level. Hayes and Perth Mint believe that because of this, the value of a gold-based cryptocurrency (for example) would stay in line with these rates and as such, will not be as volatile. Perth Mint’s plan aims to set up a new cryptocurrency which will encourage investors to start to buy into precious metals, it will make it easier for the lay person to access silver and gold on a market that is notorious secure and transparent, i.e. the blockchain. They expect to have a product launched in the next 12 to 18 months. Featured Image Source: Pixabay