History has shown us how cultures that establish healthy trading environments have grown and flourished the most. An active trading market that offers both profit potential and risk protection has always been the key to survival and economic prosperity. Economies have always accorded value to that item or object that it takes labour to produce. In fact, the amount of labour required to produce something was often the primary measure of its value.
From Bartering to Buying – the Importance of Gold and Silver
The early bartering economy was a less than perfect trade system. You could trade some meat in exchange for an agreed upon amount of bread, for example, but at some point the bread maker would have more than enough meat, and vice-versa. In such a situation, trade could stall out for an indefinite period of time, during which people would often have to do without until they could find and create some new barters to make (find a lumber guy who needs meat, then trade the lumber to the bread guy).
The solution that was eventually found for creating a more efficient form of commerce was precious metals, gold and silver. Why did gold and silver become so important in the history of trade and commerce? Well, it’s difficult to answer that question precisely, but there are at least a number of reasons that made gold and silver a widely-accepted medium of exchange. First of all, they were well-suited practically for the purpose because they were durable goods, not something that decayed over time. Second, they could easily be molded into standardized amounts, such as into the form of coins. Third, they had value in and of themselves as metals that could be used for making jewelry, utensils, and other things. Fourth, they were easily recognizable. And fifth, they were acknowledged as valuable by all the different cultures and nations that existed.
Gold and silver used as a common medium for exchange definitely made for a more efficiently operating economy. No matter what someone wanted to buy – bread, meat, lumber, cloth, whatever – rather than having to find, carry, and deliver exactly what the seller wanted or needed, a buyer could simply give the seller an agreed upon amount of gold or silver as payment. The seller could then take the same gold or silver and use it to buy whatever goods or services he needed.
The Persistence of Gold as a Store of Value
There have been a wide variety of things that have been considered valuable at one time or another, in one place or another, in one economy or another. The remarkable characteristic of precious metals is that they have always been universally considered as having value throughout the whole of human history. Gold has always and everywhere been recognized as a repository, or storage, of value. Economists argue about the wisdom of operating on the gold standard, but no economist has ever seriously disputed the intrinsic value of gold.
The problem with using gold and silver in today’s economy is that – since major world economies moved away from the gold standard and toward mere fiat currencies, and therefore stopped producing gold and silver coins in practical denominations – gold and silver have become assets that are rather awkward to use in everyday transactions. Picture yourself trying to satisfactorily pay for your groceries with either gold bullion or one ounce gold coins. Unless you were planning to buy at least $1,200 or so of groceries, or the grocery store had a machine capable of precisely weighing and cutting pieces of gold, it would be rather difficult to manage, to say the least.
Paper Money and Fiat Currencies
In fact, that’s the primary reason that paper money entered the economic exchange game – because it provided an easy way to denote specific amounts of gold or silver that facilitated exchange. (It’s also easier to carry a few pieces of paper in your wallet than it is to carry around gold bullion.) Paper money that was recognized as being backed by gold or silver provided a nearly perfect system for transacting all day-to-day buying and selling business between individuals, companies, and governments.
The problem now, however, is that paper money is not what it once was, because it is no longer backed by gold or silver. The world’s major currencies are now all fiat currencies – which basically means that the paper money a country issues is only worth something because the government says that it is, and because – at least for the moment – people are willing to accept the government’s declaration (fiat) of the paper money’s value. The only exception to this is a few countries scattered around the world that are starting to move back to the gold standard, to having their paper money backed by the hard currency asset, gold. Some countries are making this move in order to make their currency both more stable and more desirable, due to the fact that it has intrinsic value rather than just declared value.
Identifying Genuine Value for Storing Wealth
The genuine value of gold, as opposed to the mere declared value of fiat currency, can still be clearly seen. For example, as China edges closer and closer to becoming the unquestioned dominant world economic power, the Chinese, who have been buying and stockpiling gold for years, are pushing to create a new gold-backed currency. If the Chinese yuan were to become a gold-backed currency, that would cause China – and its currency – to leap forward in value and economic power.
But the wisdom of returning to the gold standard – although indeed a very important topic in today’s world economy - is more a topic for another discussion. Our primary purpose here is simply to point out how gold and silver are the perfect assets for measuring and storing real wealth.
The Reales Coin – Welcome to the New Monetary Economy
The new Reales coin represents a major turning point in the evolution of modern commerce. The Reales coin, with the emergence of the blockchain as an ally, offers the key to solving the modern-age dilemma regarding wealth, value, and exchange. The blockchain enables us to have a transparent ledger of transactions and assets, unlike anything that has ever existed before. With the blockchain, a decentralized place exists where real assets can be stored - and whoever owns the Digital Coin owns the rights to the assets.
In ever-increasing numbers, people are starting to see the real value of the blockchain. Cryptocurrencies were the hottest topic of conversation in the financial markets ending 2017 and moving into 2018. Famed investor, Warren Buffet, is an excellent example of the growing recognition of the blockchain’s value as the world economy transitions into a new era. Buffett has recently announced that he is aiming to use this new financial technology to more efficiently control the freight logistics for one of the railroad businesses that he owns. Buffett is not a man who acts impulsively, without careful thought and consideration. But he is a man who is capable of envisioning the economic future. So when he announces that he plans to integrate using the blockchain into his multi-billion dollar business empire, that’s a significant event, and one that wise investors will pay attention to.
Growing Pains in the Cryptocurrency Market
The only major problem that has developed in the cryptocurrency world has been an explosion of “hype” – of overblown forecasts regarding the value of thousands of new cryptocurrencies being unveiled too fast for almost anyone to keep track of. Suddenly, millions of people are anxious to get in on the major investment opportunities that the cryptocurrency market does in fact represent. In their haste to jump onboard the crypto train, many investors have carelessly and foolishly started throwing money into the crypto market without taking the time and making the effort to determine what is – or isn’t – an investment opportunity with real, intrinsic value.
Already, many investors have been burned: investing large sums of capital into questionable, unproven cryptocurrency investments – expecting to make ten or a hundred times their money, but in many cases instead finding no return on investment at all. This has unfortunately made many potential investors skeptical as to whether cryptocurrencies have any real value at all. Such bad experiences tend to create a domino effect of negative reactions, a downward spiral, and a growing distrust of the market.
The Importance of Real Assets in Cryptocurrency
But there have also been positive effects that have come from these early growing pains of the crypto market. First, these experiences of investors have pointed out the premier importance of having a cryptocurrency that is backed by real, tangible assets rather than just by a mountain of unrealistic promises. Second, they have made it easier to more clearly see what cryptocurrencies are genuinely valuable and can maintain their value even in adverse economic conditions. In other words, they have revealed the importance of investing in a cryptocurrency that can prosper during even the worst of times – not just during the best of times.
An Example of Smart Cryptocurrency Structure
DigixDao is a good example of the importance of having cryptocurrencies backed by real, hard assets. Each DigixDao consists of two tokens – DGX and DGD - that serve different functions. Every DGX an investor owns consists of one gram of 99.9% pure gold, which is stored in a vault in Singapore. DGX tokens provide the all-important means of hedging risk in the crypto market by giving investors a stable store of real intrinsic value. DGX also offers investors a safer and less expensive (minimal fees) process for buying gold. However, the price of each DigixDao is way above just the price of one gram of gold. Why? Because the second part of DigixDao - DGD – offers investors the virtually unlimited profit potential that characterizes the crypto market and makes it so attractive. Holders of DGD tokens receive a percentage of all the fees collected from investors buying, selling, and storing DGX. It’s easy to see that as demand for DGX tokens increases, the value of DGD tokens can increase exponentially.
It’s a really smart investment system, as people are realizing that the very act of them securing genuine value with the hard asset of gold in the form of DGX tokens creates ever more buying pressure in the DGD tokens, buying pressure that can potentially continue to push the value of DGD tokens higher and higher.
The Superior Structure of the Reales Coin
The Reales Coin brings a different formula for growing wealth while protecting against risk to the crypto market. The Reales tokens, instead of having just a one-to-one backing system, have a “pool” or basket of backings. This basket of backings amplifies both the safety of stored wealth and the profit potential for creating gains. So, for example, looking at the working of the Reales as similar to that of DigixDao, if the price of the Reales goes 10 times above the price of the actual holdings, we can then increase the amount of real holdings backing the coin, thereby further increasing the value of the Reales and pushing its price even higher.
Because we buy gold and silver in bulk, we have been able to negotiate special low rates for buying and storing precious metals, thereby maximizing the value of the Reales’ backing assets.
The Best of Both Worlds – Profit Potential and Protection against Risk
If there should be a contraction in the crypto market, the Reales has a safety cushion of value provided by holding gold and silver assets. It will hold up much better, and offer investors much greater protection, than cryptocurrencies that lack the backing of such hard assets. The rest of the assets backing the Reales are comprised of a selection of the top cryptocurrencies, such as Bitcoin and DigixDao. Whenever the crypto market expands, increasing the value of major cryptocurrencies, then these assets will likewise increase the value of the Reales.
One way to look at the unique structure of the Reales is through the analogy of rock climbing. Imagine the rise in price and value of the Reales as being like the Reales climbing a mountain. If an obstacle, such as a crypto market decline, is encountered, there is the chance of a fall. Without the safety bolts provided by the hard asset backing of gold and silver, the fall could be all the way down. As Reales climbs the mountain, every time it reaches a new high point in price and value, it locks into place a new safety bolt (by buying more assets), so that when an obstacle (a market contraction) is encountered, it will fall no further back than the level of the most recent safety bolt installed. When market conditions improve, it will resume climbing from that higher point. Thus, the Reales will gradually climb higher and higher in price. But instead of increasing risk, the continuing advances in price will actually reduce the risk of holding Reales coins.
The only question now is: Where would you rather put your money? - In a cryptocurrency that offers no protection against risk and just a lot of unproven promises of profit potential?…or in the Reales, which is backed by the hard assets gold and silver that provide investors genuine wealth protection, AND which also offers all the unlimited profit potential of the cryptocurrency market?
For more information on the Reales, Please Visit our Website:
www.realescoin.io
