The Future of Gold-Backed Cryptocurrencies
Gold has been around for thousands of years, and it’s still here. It’s one of the most stable investments you can make and has long been held as a store of value. But why should we use gold as a currency? After all, it’s not exactly easy to carry around or spend in everyday life. However, there are some interesting ways that people have used gold-backed cryptocurrency to create new forms of digital money that could change the way we think about currencies forever
Gold, Zambesi and the Case for Gold-Backed Cryptocurrencies
Zambesi is a gold-backed cryptocurrency, and it’s not the only one. The Zambesi development team is also working on an Ethereum-based fork called Leo, which will eventually be used for staking coins and sending transactions. For now, though, Leo only serves as an asset for investors who purchased during its ICO.
The developers of Zambesi are focused on building decentralized applications (dApps) to provide real value to token holders. They see this as essential to creating long-term value in their product: “We want people to understand how the technology works so they can see how valuable it is.”
The History of Gold-Backed Cryptocurrencies
Gold-backed cryptocurrencies are not a new concept. The first one, called SolidCoin, was released in 2009. Since then, there have been other attempts to launch gold-backed cryptocurrency platforms or tokens. Of these attempts, the ones that have succeeded are those that were backed by physical reserves of gold and silver rather than simply being valued at their intrinsic value (i.e., it would take 1/100th of an ounce of gold to buy one token).
The most notable example is Tether (USDT), which has gained popularity among crypto traders due to its low transaction fees and quick processing time compared with other cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH). However, USDT has come under scrutiny because it doesn’t actually have any physical reserves behind it: instead, Tether claims that each USDT is backed by 1 US dollar held in reserves by the company itself; however this claim has not yet been verified by third parties, raising questions about whether USDTs could lose value if investors distrust them due to lack of transparency or some other issue related to trustworthiness on behalf of Tether founders themselves
A Look at Tether and Its “Issuing Entity”
Tether (USDT) is a cryptocurrency that is backed by fiat currencies, such as the U.S. dollar and the euro. The company behind this token claims that each Tether token is backed by one U.S. dollar on deposit in its reserve fund and that it transfers coins in response to market demand without creating new tokens or otherwise printing money. As of mid-2019, it was the eighth largest cryptocurrency with a market capitalization of approximately $2 billion USDT has been controversial, however, due to concerns about whether the company can maintain sufficient reserves to back all outstanding tokens at once with actual cash assets. For example:
What Does This Mean for the Future of Cryptocurrency?
In a nutshell, gold has always been one of the safest assets for keeping your money. And if you want to invest in cryptocurrency, we recommend keeping your money in gold—but only if it’s backed by physical gold.
We’ve seen that gold-backed cryptocurrencies are an interesting concept and have some benefits compared to other cryptocurrencies:
- They are more secure than most cryptocurrency investments because they’re backed by actual physical gold.
- The supply of these coins can’t be inflated like other kinds of crypto coins that rely on mining or proof-of-work algorithms (e.g., Bitcoin). However, there are still risks involved with investing in any cryptocurrency because they’re not regulated by any government agency like the SEC or FINRA.
Tether is an interesting way to use blockchain technology.
Tether is an interesting way to use blockchain technology. Tether is a form of cryptocurrency, but it’s also a stablecoin—that is, its value does not fluctuate. It’s backed by fiat currency and gold, so you know that your tokens are worth the same as cash in your pocket and precious metals.
While the future of gold-backed cryptocurrencies is still uncertain, it seems clear that they will play an important role in cryptocurrency going forward. While many people are skeptical about Tether’s ability to maintain its peg with USD, we think it’s important to remember that there is no perfect currency. You can only make decisions based on how well a currency works for your needs, which is why we recommend that you do your research before investing in any coin!