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The dream of creating digital gold that is easily tradable and as reliable as physical gold has been a long-standing one. From as far back as Doug Jackson’s E-Gold (one of the first digital currencies on the internet) to the much recent rise and fall of bitcoin; advocates of digital money have been pushing this dream year after year.
At Novem Gold, we believe that the dream can be achieved by merging gold and blockchain technology. Our gold backed ‘stablecoin’ (NNN 999.9) is built on NEO’s blockchain and enables investors to have easy access not to mention secure storage of their physical gold. From over 50 existing gold-backed stablecoins, ours stands out thanks to the fact that it’s fully redeemable with physical gold and that our gold storage is the most secure worldwide.
Simply put, Novem Gold’s NNN token is introducing efficiency and accountability that was previously lacking in the gold industry. But first, let’s take a look at why we created a gold-backed stablecoin in the first place.
There is no denying that bitcoin’s hot streak in 2017 pulled some demand away from gold. But by the look of it, the pendulum is starting to swing the other way considering reports of increased interest in gold from investors. In the past, bitcoin received a fair share of interest from the mainstream public; however, most investors have lost patience with its volatile price swings.
From talks of bitcoin as a decent store of value and therefore the new “digital gold” to experts saying that it cannot replace gold, there is no shortage of arguments comparing gold and digital currencies.
But what if the two can work together; after all, both assets have overlapping characteristics in that they are not controlled by a central jurisdiction and that both are decentralized. Plus, price movements for both assets are independent of the stock market.
These characteristics are quite attractive for investors looking for a good hedge against inflation. The merger between the characteristics of a digital currency like bitcoin and that of a tangible asset like gold can be beneficial both for the gold industry investor as well as the crypto investor.
The value of most cryptocurrencies is faith-based. The floating abstraction of cryptocurrencies like bitcoin makes it necessary to have stablecoins. Instead of deriving value from the collective belief of the investing public, stablecoins are backed by stable assets from which they derive value. The stablecoin is pegged (usually on a ratio of 1:1) to a stable asset like the US dollar or gold.
Therefore, the reliability of the asset it’s pegged on determines the value of that stablecoin. To this end, a dozen of gold-backed cryptocurrencies have sprouted recently.
The basic premise of what gold-backed stablecoins represent is compelling. On one hand, a gold-backed stablecoin ensures that the value of the coins is always equal to that of gold and on the other hand; an increase in the coin’s value above the current gold rate gives investors double profits.
However, beyond looking at the profit, investors need to consider the risks associated with most gold-backed stablecoins.
While blockchain can account for the security of the stablecoin, the security of the physical gold presents an entirely different set of problems. If you decide to have your gold delivered at home, is the security there sufficient? Plus, are you able to cover the extra insurance costs that come with storing your gold at home?
Well, at Novem Gold, we offer secure storage with one of the best-known custodians of precious metals; Trisuna.
Plus, our gold is certified by LBMA (London Bullion Market Association) offering you top-notch quality guarantee. Besides, Trisuna only deals with institutional investors like Novem Gold, and retail investors can only access their quality storage through companies like Novem Gold. That’s a good incentive to invest in our gold backed token since it gives you access to quality storage at a cheaper cost.
Evaluating a gold-backed token to find out who actually owns the gold is crucial. Most gold-backed tokens are only backed by physical gold up to a certain percentage.
Others offer pooled ownership which means that all the gold is collectively stored such that investors share ownership of the physical gold.
Such options present a problem of access.
In case you as the investor need to access the gold or in case the company goes into insolvency, uncertainties may arise over who gets to distribute the gold and to whom.
At Novem Gold, our NNN gold backed token is fully redeemable meaning there is no counterparty risk if our company goes into insolvency.
How easy is it to trade your gold-backed stablecoin? If you are only trading with physical gold, transporting it in large quantities can be a great inconvenience even though it’s not illegal.
Novem Gold’s NNN token integrates blockchain technology to the gold trade thus introducing efficiency. Apart from bringing back trust to the gold trading industry, Novem Gold is re-inventing the gold trade by taking away some of the inefficiencies of the traditional gold warehousing companies.
Having digitally linked ownership to your physical gold makes it easy to trade with anyone through your Smartphone without having to deal with security and transportation issues.
Ultimately, what makes Novem Gold stand out in a crowded market of gold-backed stablecoins is the fact that Novem Gold is not just another blockchain or cryptocurrency project looking for VC funding. Novem has actually been in the gold industry for years and is now looking to leverage the power of blockchain technology in order to add security and improve efficiency in gold ownership.
Novem Gold’s entire approach is based on safety and transparency. Through the use of NEO’s blockchain, Novem Gold is providing institutional as well as retail investors a transparent stablecoin project that can handle secure storage and transfer of physical gold.
Click here to learn more about Novem Gold and how you can invest in gold in a safe and secure way.