This article was originally posted on Medium, here.
Most proponents of the gold industry will tell you that there are only two ways to own physical gold. The first is to buy the gold and let a third party store it for you and the second way is to buy the gold and store it yourself.
The reason why gold ETFs (exchange-traded funds) have become popular when compared to owning the real thing is that gold ETFs provide various conveniences, top of which, include storage and ease of trading. Simply put, when you buy gold shares or even gold-pegged tokens, there is no point of worrying about anyone breaking into your house to steal your gold.
On the other hand, if you decide to buy physical gold bullion, you’ll need to store it somewhere, and storage is not cheap. However, storage of gold bullion is more private and confidential since you control who knows you own it, and you don’t have to worry about counterparty risks.
Serious investors consider physical gold in hand a much better option than owning gold ETFs. One of the main reasons for this preference is counterparty risks.
Investors who own gold ETFs have no choice but to trust that the counterparty will make good on their promises. Furthermore, a majority of these investors cannot even lay a claim to the underlying gold since the companies offering the gold ETFs reserve the right to settle requests with cash.
With so many parties involved, any breakdown in the overall structure can put your investment at risk.
With physical gold, however, there is no counterparty risk since there are no contracts to be fulfilled. Once you buy your gold, you retain full ownership.
Plus, gold bullion offers other advantages such as tangibility, and they cannot be reproduced by the whim of a central organization or bank.
While preparing for an unprecedented disaster, keeping some bullion close at hand can be a wise choice. However, physical gold held in your house is only as secure as your home. You could still lose them in a robbery or some natural disaster. You can buy a home-safe; however, most of them are only useful for short term purposes.
Besides, even if you decide to go with an online option that lets you buy and store your bullion with the guaranteed transparency of immutable distributed ledgers like the blockchain, any event big enough to bring down blockchain can also challenge the fungibility of your assets.
Novem Gold provides this combo and is one of the surest ways to gold ownership. The Novem Gold platform takes the best of both the digital and the physical worlds to give you a gold-backed token. The token is called 999.9, and it will be tradeable on the blockchain.
What makes the 999.9 unique (apart from the fact that 100 units represent 1 gram of gold) is that it is built on the NEO network. The NEO blockchain network is on track to becoming one of the first distributed ledger networks to enable encryption that can withstand quantum computing.
Simply put, the 999.9 token will be safe in the long run even with the advent of superior computing power that is capable of breaking through current cryptocurrency security levels.