Can a digital currency be backed by or integrated with a commodity like gold?
Payments
Asked by Question Bot03/May/20151 answer
1 Answer
F
Faisal Khan
Answered 03/May/2015
Joseph Wang sums it well.
Most of the companies that I talk to, who are trying to integrate gold with their own crypto-currency of choice (and in some cases even their own issued currency) are still (in my opinion) trying to perfect the case of purpose? (One such company that comes to mind is Taariq Lewis' Serica Trading - https://sericatrading.com/)
Zoom out, and it looks like a nothing more than a trade-able gold contract, that is has fractions that can be traded. The upside is that you have a commodity backed currency, so, your base currency is always valued against how much gold you are holding, and on the spend side, you're doing a real-time conversion to the digital currency for trade.
Commodity backed digital currencies are great if you feel that the digital currency by itself won't hold much value, and you need to preserve the value of your investment by a much more stable pair, which in this case would be gold.
Most of the companies that I talk to, who are trying to integrate gold with their own crypto-currency of choice (and in some cases even their own issued currency) are still (in my opinion) trying to perfect the case of purpose? (One such company that comes to mind is Taariq Lewis' Serica Trading - https://sericatrading.com/)
Zoom out, and it looks like a nothing more than a trade-able gold contract, that is has fractions that can be traded. The upside is that you have a commodity backed currency, so, your base currency is always valued against how much gold you are holding, and on the spend side, you're doing a real-time conversion to the digital currency for trade.
Commodity backed digital currencies are great if you feel that the digital currency by itself won't hold much value, and you need to preserve the value of your investment by a much more stable pair, which in this case would be gold.