For the past few years, there has been a noticeable increase in cryptocurrencies trying to integrate the digital world with the precious metal, gold.
There has been a surge in gold-backed stablecoins this year, due largely in part to the economic troubles brought on by COVID-19. This turmoil has led to investors setting their sights on assets that can serve as a stable hedge against volatility. Cryptocurrencies that are pegged to gold have also been strengthened by dwindling interest rates and national currencies during the last couple of years.
There are a wide variety of gold-backed cryptocurrencies for investors to choose from. One notable option is Goldcoin, an ERC-20-backed coin that is built on the Ethereum network. The creators behind Goldcoin declare that their offering is the first fractionalized gold-backed asset available for direct purchase in both cryptocurrency and national currencies.
What is Goldcoin?
Goldcoin is a cryptocurrency that is backed by gold and is built on the Ethereum blockchain. The coin is noteworthy in that it is the first time a fractionalized gold-backed asset can be bought with both fiat and virtual currencies. The worth of each Goldcoin is 1/1000 of an ounce of 99.9% pure gold that is redeemable. The Goldcoin team is of the belief that investors have a chance to utilize gold as a functional currency. At the same time, they have full access to the physical asset. The Goldcoin website provides valuable intel about compatible wallets and presents details about recommended Gas limits.
There is an advantage that Goldcoin has due to it being built on the Ethereum network. This platform is one of the most popular and stable locations for building cryptocurrencies, so this provides legitimacy to the entire project. This is because the smart contract address for Goldcoin is easy to view on Etherscan.
Part of Goldcoin’s strength is courtesy of its Ethereum foundation. Generally speaking, projects based on a strong platform usually bring in more investors, which increases the value of the underlying cryptocurrency. Moreover, it fosters long-term stability.
Gold buyers value security above all else, so Goldcoin investors have a clear advantage. They are able to purchase digital coins in a secure manner, along with a redemption process that is rather seamless. On top of that, the Goldcoin website lists the steps of the redemption procedure for physical bullion. Holders can then work alongside team members to validate holdings and get a physical location to initiate the bullion pickup.
The storage and overall security of coins is easy thanks to the Ethereum blockchain. Investors can keep Goldcoin in a wide variety of popular Ethereum-based wallets that are safe and easy-to-use, such as Trezor, Ledger, and MetaMask.
Stablecoins: the new trend
In times of economic uncertainty, investors will typically flock to assets that they deem to be a “safe-haven.” It is because of this craze that many curiosities have been piqued about the potential of the cryptocurrency market. However, there are just as many that ultimately shy away due to its volatility.
Suddenly, stablecoins appeared as a check against the unpredictable price swings of cryptos giants like Bitcoin and Ethereum. Following their emergence, they would garner a reputation as being an asset people can buy to enter the cryptocurrency world. At the same time, they still have a beneficial hedge against volatility and financial unrest. This derives from the vast majority of stablecoins being fiat-backed, which means that traditional currency or commodities (ex. precious metals) act as the reserve.
Generally speaking, stablecoins are another method for digital assets to reach a new audience. Cryptocurrencies receiving support from fiat money are appealing for those who remain hesitant regarding new ideas. The guarantee of stable prices and a familiar currency connection serve as sound arguments for traditional customers.
Stablecoins are an essential bridge between the crypto world and national authorities. In a way, they are very similar to fiat, thus making them comparatively easier to adjust to pre-existing laws and regulations. What’s more, blockchain technology gives them incredible flexibility.
The potential of Goldcoin
Goldcoin obeys strict security measures, has transparent bullion verification, and runs a seamless redemption process. Many investors consider the coin to be as good as gold and that it is an ideal asset for diversifying their digital portfolios while also redeeming physical bullion.