Better money for all
Right now, asset-backed tokens are solving many of the devaluation problems that come from other tokenization methods. This is largely due to the tangible value tied to the token and how that affects volatility and intrinsic value.
Gold is money, and for 5,000 years, it has been used as a medium of exchange. Gold, as an asset class, has one of the richest and longest histories of all the natural assets to have been bestowed with such high value by humankind. So if we can tie the value of gold to a token, you have a unique way to protect against impending doom and enforce stability in the system.
Just as the Internet revolutionized information flow, the blockchain will revolutionize information validation. Mass disintermediation will be the next quantum leap in human productivity. Blockchain is poised to eliminate 99% of the friction involved in transacting in real things, such as gold, silver, and other commodities, displacing all who are currently employed in those frictional processes.
People that are calling cryptocurrency the next money and currency are missing the bigger picture. When you combine gold, which is one of the oldest forms of payment, with a technological and financial advancement like asset-backed tokens, you have the best of both worlds. Transacting on the blockchain will give gold asset-backed crypto-tokens tremendous value, in the same way that the global oil trade in US dollars gave the US dollar its throne seat for over forty years – people are forced to use it.
How Fiat currencies are Tied to their government’s economic performance
If you can understand this fundamental concept, then you can understand why cryptocurrency isn’t mean to be the new “money” – it’s meant to be the new platform for money. Gold is deemed to be a tangible commodity and is one of the most persistent and durable products.
Some might be shocked to hear this, but the annual gold trade, including all estimated over-the-counter (OTC) transactions, is estimated to be more than $USD 22.0 Trillion as of 2016. Gold is the de facto backbone of the financial system, and it always has been. It still is the best money, because its value as money is immutable and inherited from its properties as an element. Just because it may not be easily tradeable in our current commercial climate doesn’t mean it can’t serve as money.
Because gold doesn’t move around, it stands to gain a lot from being transitioned onto the blockchain. One of the highest costs and concerns with gold is storage, moving it, and keeping track of it. If there is one thing in current times that could benefit from a distributed ledger and disintermediation on the scale that distributed ledger technology promises, it’s gold. The gold trading industry probably represents one of the best candidates for disruption with blockchain.
Blockchain may serve as a facilitator and a liquidator for the gold trade by creating a gold-supported currency. And by using the Ethereum blockchain, which allows smart contracts, any contractual conditions of the currency could be easily verified. This is exactly the goal companies like Garnex are aiming for. By combining the best of both worlds – fiat currency and cryptocurrency – they intend to create a gold standard for the modern age.
What happens when we face extreme levels of inflation?
The world today feels like it’s becoming more disjointed and uncertain than ever. Financial shocks and geopolitical crises are becoming more frequent, just as new technologies like blockchain hint of a more transparent future. With all these changes at play, we feel that people, organizations, and governments deserve a currency that hedges against this uncertainty.
A currency that will have a reliable value in times of crisis and instability. We believe that cryptocurrencies and governments can not only co-exist together but can serve to empower and make the other better and more efficient.
One of Garnex’s top priorities is security. In order to ensure the platform is secure, its infrastructure and smart contract code have been reviewed by top security auditors and bug bounty hunters. During the process, extensive penetration testing was performed. These tests proved fruitful and Garnex was able to fix some vulnerabilities in the Garnex web API and smart contract that should lend greater confidence to their infrastructure and security.
The role of Garnex in the real world
All of the above information shows the market gap that gold-supported currencies could fill, but it still needs to be explained why blockchain technology necessary for Garnex Gold Corporation’s solution.
The top benefit of blockchain in this instance is that it enables users to hold fractional ownership of gold. The ability to hold, receive, and spend small amounts of their GLD currency makes it much more liquid and enables its use case as a medium of transfer.
Additionally, ownership of the GLD currency allows users to transact with anyone in whatever currency they choose. Custody and control are no longer issues, and this creates a twofold effect. First, there is a much more liquid market for the currency since anyone can transact with it. Second of all, the worldwide accessibility of GLD currency allows for a greater user base and higher demand for the money.
If this sounds interesting, you should know that Garnex is currently running a giveaway campaign where the winner has the chance to receive 1 ounce of gold (worth approx. $1500 USD). Click here to check out the giveaway today!