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New Crypto Backed By Gold Bullion Makes Debut

New Crypto Backed By Gold Bullion Makes Debut
Blockchain / Breaking News
Earlier this month, three stablecoins (Gemini, Paxos and Carbon) that are pegged 1:1 to the U.S. dollar launched with regulatory approval. But many investors don't like the dollar's inflationary features and some undoubtedly prefer value stored in precious metals. This week, a Switzerland-based startup launched an ERC-20 token whose price is tied to gold, opening a crypto-investing avenue that appeals to traditionalists. Eidoo's (Ekon) coin is redeemable for one gram of 99.9 percent fine gold. Moreover, the yellow, shiny metal that fully back all Ekon tokens are stored in vaults and audited every 90 days, per CoinDesk report. And if you want even more assurance, investors can see their bullion through a video camera. The periodic audits and video systems are key security features that some say are missing in the U.S. government's gold storage system. For years, it's been reported that the bullion in Fort Knox haven't been counted in decades and building administrators supposedly won't let Congress or its representatives inspect inventories. And in a famous dispute with the New York Fed, the German central bank wasn't able to repatriate all its gold bars — apparently because the Fed didn’t have all of it and thus had to create a payment plan of several years to gradually return Germany's precious property. Ekon holders will need to complete know-your-customer (KYC) steps and all other legal requirements from Swiss authorities. Eidoo raised $27.9 million in a token sale last October 2017, per CoinDesk. The precious metal is currently priced at $1,206 per ounce but predictions of a crashing dollar could send prices soaring in the next few years. Ekon may not make sense as a cryptocurrency — that is, to own it in order to make payments. But rather as a commodity-backed token that hedges against loss of value by fiat currencies. Thus, Ekon could appeal to investors who live in inflationary economies and who are looking to preserve their purchasing power. Places like Venezuela, Argentina, Libya, Angola and Turkey, to name a few. Turkey tripled its gold imports in the last seven months of 2017 and it imported 153 tons from January to May 2018, according to Borsa Istanbul. However, it’s difficult and expensive to constantly transport and store the bullion. Thus, it may make sense for investors to hold physically-backed tokens instead. Eidoo isn't the only blockchain project that ties digital assets to the yellow metal. DigixDAO tokenizes gold on the Ethereum platform where users can buy tokens linked to actual purchases of physical gold. The initial coin offering (ICO) raised $5.5 million back in March 2016. Digital gold tokens (DGX) are minted into existence when actual gold are bought from the London Bullion Market Association (LBMA). Similarly, HelloGold offers investors a gold-backed token where each GBT coin is backed by physical gold. The precious metals are audited and secured in vaults in Singapore. Articles by Marvin Dumont: Bitcoin Degree: NYU Is First College To Offer Major In Crypto 6,000 Bitcoins Stolen From Japanese Exchange China’s ‘Bitcoin Girl’ Documentary Shows Challenges Of Bitcoin Use 65% Of Firms Prefer IBM Blockchain Over Microsoft, Others BMW To Test Blockchain And Smart Contracts To Simplify Car Buying Samsung Blockchain To Help Korea Gov’t Improve Services

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