Economic News

Where 2017 was the year of the unbacked cryptocurrency, 2018 is revealing itself to be the year of the resource and gold backed one

By a wide margin, 2017 was the year of the Cryptocurrency, with tokens such as Bitcoin, Ethereum, Litecoin, and others providing growth and returns never before seen in any market or asset class.

However since the start of 2018, most cryptocurrencies have fallen well below their all-time highs achieved around the middle of December of last year.  And this even includes the grand-daddy of them all (Bitcoin) as the biggest name in cryptos remains close to 50% below its all-time high price.

But with this being said there is a growing convergence in the cryptocurrency sphere, and it is being driven by a sector that is seeking to differentiate itself from the legacy of unbacked cryptos that primarily were created to try to replace sovereign fiat currencies.

These cryptocurrencies of course are the ones being backed by actual commodities or resources.  And even as the unbacked cryptos struggle to regain momentum following their recent two month bloodbaths, many of the gold backed cryptocurrencies are actually thriving and providing greater returns than either Bitcoin or Ethereum.

The first ever Ethereum-issued ICO, DigixDAO (DGD) has so far had a stellar 2018, even amidst all the price bloodbath faced in the crypto arena following a sharp fall of Bitcoin’s price form an all-time high of $20,000 to lows of $6,000 in early this February. DGD has produced greater returns every single day of 2018 than Bitcoin has. Digix Global, DGD parent company, aims at decentralizing the current gold market by creating a transferrable, tradable and stable coin on the Ethereum smart contracts. The company’s website states that for each of these DGD tokens, a total of 2,000,000 DGD, a gram of London Bullion Market Association (LBMA) gold bullion will be physically stored in a vault in Singapore. 

“The card can then be minted, which is the production of a new DGX token, or redeemed for the physical gold bar. The gold bar can then be collected at their offices or mailed to you through a trusted mailing service.” 

Digix has so far managed to compete favorably against its stable currency rival, Tether (USDT) which currently ranks 17th according to coinmarketcap.com. DigixDao (DGD) came into the market a year later and currently ranks 34th with its market cap hitting a high of $ 819,154, 000 in February when the crypto market was still struggling from a plunge. Non-blockchain digital gold storage players such as GoldMoney, Canadian based will soon feel the impact of blockchain’s presence in their line of business. The company had revenue of $ 524 million in 2017 and a significantly lower market cap than that of DigixDao of $ 254 million. – Cryptoglobalist

A viable gold backed cryptocurrency on the Blockchain has the potential to not only compete directly with the world’s sovereign gold markets, but also provide an easy avenue for anyone to invest in both gold and cryptocurrencies. 

Source: thedailyeconomist.com