In this digital era, everyone well known about cryptocurrency. It is a never-ending concept because from the start to right now, crypto-based assets are the most valuable commodities in the digital market. While looking at the business market, startups to large companies all over the world fight for two things like grab their end-user attention and change them as a regular user.
If you are aiming to succeed in the crypto industry then you must learn more about the trending cryptocurrency business model because the technology is developing at a high pace and more & more crypto business owners are joining the race.
In the crypto market, we have seen a lot of new crypto coins come out for various business purposes. In fact, Bitcoin, Ethereum, Ripple and other altcoins have grown rapidly over the past few years. The mingled market cap has enlarged over to over $400 billion, with some predicting that the total market capitalization could hit $1.5 Trillion by the year of 2020.
However, despite this rise in price and interest, crypto coins are still mainly used only in some cases. The regular spikes and crashes, as well as everyday fluctuations, have many concerned about actually using these currencies in everyday transactions, such as buying goods or services.
For there to be a modern financial system on the blockchain, there requires to be a stable medium of exchange, a truly stable currency.
Introducing, the stablecoin, a basically new approach to the idea of digital money.
Stablecoins have won a front-row seat in the crypto market because they provide more stability than other cryptocurrencies generally. They show the ideal way to connect the best parts of the crypto and fiat world.
It has low volatility against the world’s most important fiat currencies, potentially unlocking the Power of the Immutable Blockchain technology. Most of the business people believe stablecoins because that Unlocking large benefits for a decentralized Internet.
In simple terms, a stablecoin is a cryptocurrency with a fixed price. A reliable stablecoin allows a greater number of use cases than what we see today on the blockchain in the digital era.
Stablecoins are mainly pegged to fiat currencies, real estate, oil, commodities, minerals and even precious metals such as gold.
As the stablecoin starts to become more popular so that most of the business entrepreneurs are planning to take real-world assets and putting them on the blockchain.
And experts are capture some of that market share, the well-established countries like US, UK, UAE, Russia, China, Japan, Korea based companies decided to “create a coin that could functionally act as a stablecoin, but be backed by something physical, gold.
Here you may think about how to create a gold-backed cryptocurrency and why these countries are involved in this particular crypto business model.
In this article we are gonna explain the Gold-Backed Cryptocurrency Development in detail for those willing to master the topics of stablecoin and blockchain in the most modern way.
Cryptocurrencies are purely digital and blockchain-based coins, but they can also be backed by stable assets.
When you are all thinking about the volatility and lack of basic value of mainstream cryptocurrencies, it is understandable that asset-backed cryptocurrencies like gold-backed digital tokens are the best crypto investment.
The real-world asset like Gold is a popular and best choice for this. Gold-backed cryptocurrencies specify to digital coins that are worth a set amount of gold each.
Gold-backed cryptocurrencies are arriving as an attractive investment method and conventional digital currencies are being criticized for their lack of real backing and reliance on P2P decentralized transfers.
The value of these cryptocurrencies is linked to the price of gold in the market. This gives them an added benefit of having a real value apart from being on a distributed ledger and therefore easy to trade in various exchange platforms.
The concept of a gold-backed crypto coin dates back to 1999 when e-Gold was launched. E-Gold was developed to withstand the highs and lows that are similar to fiat currency. The e-Gold coin was popular among privacy-conscious institutions such as Netizens and millions of people over the world. Simultaneously other new gold-backed cryptocurrencies have also developed and launched in the crypto market.
In a gold-backed crypto token is launched that represents a certain value of real gold. The gold that the token is related to is stored by a trusted third party. The gold can be traded and exchanged by other token holders. The value of the token is, at any given time, equal to the current rate of gold.
For example, One token of gold-backed crypto token usually equals 1 gram of gold. This gold must be held in reserve by some third party. In the case of gold-backed stable coins, the price wouldn’t fall below the current price of gold.
Important note: There are some digital coins or cryptocurrencies with the word “gold” in their name but they are not backed by gold or related to gold. Examples of these include Bitcoin Gold and Ethereum Gold.
The elite gold-backed cryptocurrency is one that you are certain is purely backed by gold and that you can change for physical gold when needed.
The exact strategy for verifying a coin will vary between projects. For example, frequently you might take it as a primary thing of trust that a coin is really backed based on the reputation of its owner, while other times you might want to do a thorough check via independent auditors.
But usually, to validate the backing of a gold-backed cryptocurrency, you can: Confirm that the crypto coin is backed by physical gold: To check the gold backing of a cryptocurrency, you can look for independent third-party audit reports or other proof of docs, and then contact the auditor to confirm that the documentation is real or not.
Verify that the gold backing meets the number of coins in circulation: Once you're convinced that there absolutely is gold backing the crypto tokens, you can look at the token smart contract on the blockchain to see how many crypto coins there are in distribution and confirm that it meets the gold held in reserve.
Along with intrinsic value, the main difference between gold-backed cryptos and other cryptocurrencies is their starting-level costs.
The primary difference between gold-backed cryptocurrencies and other cryptocurrencies is their entry-level market costs. Yes, many investors who bought other cryptocurrencies like Bitcoin in their initial days only had to invest the initial price. However, for gold-backed crypto tokens, the minimum investment has to be similar to the current price of gold.
Another difference between these two cryptos set is their price fluctuation. While the price of other crypto coins can rise and fall to any level, but gold-backed cryptocurrencies have a built-in stop loss.
Before we have discussed, first we check the value of a gold-backed cryptocurrency and it cannot fall down the value of gold. Should such a gold-backed crypto coin gain immense popularity, its price can rise way above that of gold price. But if the gold-backed crypto coins don’t do well, its real value will remain at the rate of gold.
Stable & Reliable
Certain gold-backed cryptocurrencies reflect the gold prices and are much more stable and strong than the other cryptocurrencies like Bitcoin, Ethereum, Ripple and more.
Solid store of value.
Individuals and investors who are worried about inflation or the security of cryptocurrency may prefer to store their value as gold.
Allows access to blockchain apps.
Tokenizing gold on the blockchain lets you use gold across blockchain applications, to trade it, spend it as money and more.
Easier to store and sell than gold.
Completely crypto gold tokens are really easier to store and sell than physical gold.
Less stable value than gold. Gold-backed crypto coins are often more volatile than gold itself.
Unprincipled projects are common. Many gold-backed cryptocurrency projects are either misleading about their backing or are outright scams.
Needs some trust. Even the most genuine and transparent gold-backed crypto coins need some kind of trust between you and the token owner.
May involve fees. The costs of physical gold custodianship or other expenses may be passed on to users in the form of extra fees.
Limited liquidity and exchange availability. The availability and liquidity of gold-backed cryptocurrencies on exchanges may be fixed.
Let us now look at some of the gold-backed cryptocurrencies that have been launched in the recent past.
All of the trading and exchange platforms in the list of below offer gold-backed cryptocurrencies or similar gold-backed products.
If you want to create your own gold-backed cryptocurrency then should keep in this steps in your mind as well as before you start to create your own gold-backed cryptocurrency you must have the strong programming knowledge otherwise consult with the right stablecoin development company who are all experienced in the field of coin development.
Some basic steps of the gold-backed cryptocurrency development process:
As a leading stablecoin development company, Developcoins provides complete gold-backed cryptocurrency development services and solutions using cutting-edge technology. We are delivering compatible asset-backed cryptocurrency development solutions to our clients as per their requirements.
Our blockchain developers have expertise in various industries and follow the agile stablecoin development process in order to ensure timely delivery to our worldwide clients.
Our dedicated stablecoin developers are catering to the needs of business people, Startup, and large companies. We are capable of developing complex stable coins and tokens. Here is a bunch of benefits you get when you hire our stablecoin development team in India:
Being a leading Stable Coin development company in India, we cover all advanced technology in order to meet the mixed demands of clients in minimum possible time and provide advanced solutions.
It’s the right to time to create your own gold-backed cryptocurrency in the market and get a stablecoin consultancy services so that you get the right solution that will help to save your time & money.