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September 25, 2020, 09:44:05 PM |
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It's no secret that ever since the Covid19 ravaged the planet the world has gone into a spiral of panic, and markets crashed. With crashing markets money started flowing to gold. And it caught my attention. With that I also realized that blockchain can be an effective technology that can be utilized in Gold Trading.
Later, to no surprise I realized that it already picked up steam, Britain's government-owned Royal Mint along with a growing number of companies has launched services that let businesses and investors buy and sell digital tokens representing physical gold via blockchain transactions.
I even calculated that is competitive to do so and even more cheaper and effective to trade gold on the blockchain.
Some significant advantages being no annual fees for owning tokens, compared to annual fees of 0.25-0.5 percent for gold Exchange-traded Funds (ETFs) and there needs to be no payment of annual secure storage fees of 0.12-0.25 percent for gold bars. That translates into a higher return on investment for gold backed tokens, because over time the compounding effect of fees significantly reduce the overall return.
As interest for gold picks up, more businesses will want to participate. More people with lesser capital will also participate. Millennial generation might start considering traditional asset classes like gold, and entry barrier can become lesser. Such Gold Trading systems can have advantages by building on new generation Blockchains like Concordium mainly because of some features that Concordium provides. Concordium has regulatory compliance by design so one need not have to worry about the legal and regulatory hassles that come with buying traditional assets like Gold. It also has privacy feature in its protocol. This is important because blockchain mainly stands for transparency that may also expose buyers to risks of revealing how much Gold one is buying or selling that may bring with it various unforeseen risks and manipulation in markets. Having all your transactions private means no one can see how much you are buying or selling protecting your identity legally and lawfully.
It also has fast transaction and high throughput for global scale, so a trader in the United States can legally trade Gold from the Middle East or Asia without having to wait for hours to process and transact hence, saving them lots of money.
Concordium also provides White Label Production Architecture and Sharding which means that every company can take advantages of Concordium Blockchain while eventually having a white label of their own brand and customizing it for their clients without their clients even realizing.
So I wont be too surprised to see actual gold being brought on your cellphone recorded on the blockchain. Imagine such low barriers to entry could kick start a new run and benefit two large industries in a big way.
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