Traditionally a store of value, gold has since found uses in a huge number of industries, which combined with its rarity has led to impressive growth in the last decade. Since August 2009, gold has more than doubled in value, across a time period where inflation has seen most fiat currencies weaken.
However, despite its remarkable performance as an investment option, relatively few investors include gold bars and coins in their portfolio, due to the difficulty of securing authentic gold at a reasonable cost.
Now, a new wave of innovative companies has begun looking at how new technologies like blockchain can help reignite the gold industry, making it more accessible than ever before.
Gold as a Store of Value
In the past 15 years, gold has outperformed stocks and bonds as an investment option and has performed massively better than most fiat currencies, which have seen their value eroded due to inflation.
Gold is also widely expected to perform better than most other precious metals in the coming years, making it an excellent choice for those looking for low-risk investment options. In addition to this, gold has shown to be remarkably stable, making it ideal for those looking to preserve wealth over the long term.
In light of this, savvy investors continue to purchase gold as an investment option and have enjoyed impressive over the past two decades, as gold has increased from a low of $388/oz in 2011, up to its current value of over $1,500/oz.
Beyond this, many emerging economies including Brazil, Indonesia, India, Russia and China have massively increased their gold imports in recent years, with demand now beginning to outstrip the available supply. Because of this, it is likely that the value of gold will continue to grow well into the future.
Being such a lucrative investment option, there are now more ways than ever to invest in gold. Ranging from the physically delivered gold futures offered by CME Group, to stocks in gold mining companies such as the VanEck Vectors Gold Miners ETF, gold investments are now far more accessible than they once were.
However, though gold ETFs and futures have opened the gold market to a wider audience, another recent technology looks set to propel the market into an entirely new era— blockchain!
With the advent of blockchain technology, gold traders can now prove their gold is conflict-free and authentic while allowing gold ownership to be transferred anywhere in the world practically instantly at almost no cost.
Along Comes Blockchain
In a time where gold is mostly seen as a store of value, rather than a medium used to exchange value, the potential of gold as a currency is largely overlooked. However, with the innovation of blockchain-based cryptocurrencies, it is now possible to drastically enhance the value of gold as a medium of exchange.
Through the use of blockchain technology, gold can essentially be digitized, while using cryptocurrencies to represent partial ownership of gold securely stored in a vault. By transferring the gold-pegged cryptocurrency between individuals, this is equivalent to transferring ownership of real gold—albeit without incurring the significant transportation costs usually associated with gold trading.
Despite the clear benefits of merging both the cryptocurrency and gold industries, few attempts at doing so have been successful. For example, there have been several attempts at producing a cryptocurrency that is linked to gold, but these have mostly fallen flat due to poor execution and lack of vision.
KaratGold Paves the Way
With that said, KaratGold appears to be the exception, having developed an entire suite of products that are aimed at both improving the utility value of gold and the stability and usability of cryptocurrencies.
This product lineup includes KaratGold Coin (KBC), a cryptocurrency that comes with the possibility to be partially redeemed for CashGold — a type of physical bill which contains 24 karat gold bars in different nominations. In addition to this, Karatbars International GmbH has pioneered the KaratPay system which allows CashGold owners to pay for items in stores with their CashGold digitally.
Prior to KaratGold Coin and other KaratGold services, it was practically impossible to convert cryptocurrencies to gold, and vice-versa.
With Karatbars and other companies now looking to use blockchain technology to bring the benefits of gold to the masses, it might not be so long before the precious metal is seen as more than just a store of value, but a mostly stable transactional currency in and of itself.
Disclosure: The ZyCrypto News Department Was Not Involved In The Production Of This Content, Readers should do their own research before investing or having anything to do with the company, goods and/or services mentioned in the above article.