Case Study: Identifying The Best Gold Tokens
Gold tokens are an exciting concept being developed by several companies using blockchain technology. The idea has been popularized by articles from major publications in the crypto space (Coindesk, Forbes) as well as through grassroots discussions and debates on Twitter hashtags.
Out of all the use cases available today, it can be argued that gold tokens are the next big thing coming up in the blockchain world. Some early iterations of them already exist, and this kind of token can be launched with technology already in use for USD-pegged tokens such as the Gemini Dollar (GUSD).
Blockchain technology offers immutable, public protocols which by their very own nature are difficult to hack or cheat. It is an excellent match for the gold market. Here are the three best gold tokens on the market today.
Novem is founded by a team that has been working in the gold industry for over a decade and is leading the pack in tokenized gold. Each Novem token represents real, LBMA-certified physical gold. If you hold these digital tokens you can redeem them for physical gold at a rate of 1/100th gm per NNN token, shipped to your location.
Nearly $1.5 million in gold is held in trust to support the value of every NNN coin minted, stored securely with Loomis AB in Frankfurt. Loomis is a leading cash, precious metal handling, and secure storage company, being in operation since 1997.
The company raised funding prior to their token sale, indicating that outside financiers have vetted Novem, deeming that their business model is interesting due to the team’s broader vision of opening physical stores. There’s more than just a token here, there’s a business, and it has the makings to be a great one.
DIGIX, located in Singapore, offers gold tokens on the Ethereum blockchain as ERC-20 tokens. One DGX token is equal in value to one gram of 99.99% gold from LBMA-certified refiners. Each gold bar is tracked in their system, scanned with its receipt information, stored and associated with the purchased token.
Digix Global, the organization behind this blockchain, makes it easy to find information about their vault (The Safe House Singapore), their auditor (Bureau Veritas), and their providers, offering transparency on the gold asset backing the tokens.
A round of private funding led by Japanese VC firm Global Brain raised $1.3 million. In addition, DIGIX’s ICO raised $5.5 million. The team behind DIGIX has decades of collective experience in financial technology, cybersecurity, and gold trading. DIGIX is an early entrant into the gold-backed token space and one to watch in 2019.
GoldMa is a gold company offering a gold mining profit share protocol as its premiere service. They have raised over $9 million so far, according to CEO Henry Jenkins. They offer tokens that give the holder rights to a share of the profits from a gold mining operation currently taking place in Zimbabwe.
The business model for GoldMa is quite unique and allows investors to own tokens in gold mines, providing investors with a potentially lucrative access point to the world of gold. However, it is important to consider that investments in gold mining operations do not directly track gold market prices due to operations costs.
Now is the time to learn about and get involved with gold tokens. With 70% of ICOs last year failing and people looking for stable value in cryptocurrency, gold is a common sense choice as a peg for tokens. It has held stable value for millennia and is not tied to any one government.
Blockchains and their associated organizations can offer transparent auditing, storage, and sourcing of gold. Private businesses, not using blockchains, are unlikely to match this level of transparency or price efficiency.
Smart buyers are likely to move to blockchains as they seek better deals on gold. This trend could easily spread to other precious metals such as silver. It’s a powerful use case for blockchain technology with a huge amount of potential still to be realized.
Disclaimer: This post is for informational purposes only and should not be treated as
investment advice. Please do your own thorough research or seek professional advice
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