Digital Gold – Can Cryptocurrencies Replace Paper Money?

According to the Central European Bank, a new € 80 billion is released every 30 days. Such emission of money would have a basis if the standard and economic growth of the European Union and its members had constant monthly growth. But, that is not the case.

Can We Expect Paper Money To Be Eliminated?

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When the ‘Euro fever’ began in 2001, 664 billion euros was printed from central banks to commercial banks. More than 5,000 armored trucks were carrying money. It may be interesting to know that the United Kingdom, already had counterfeit euros at the end of that year. Currently, more than 25% of counterfeit money is circulating, according to central bank data. This is one of the main reasons why a growing number of European countries are opting for reduced use or complete abolition of printed money. On the other hand, credit cards are becoming more and more easily accessible to criminals. Cyber-stealing methods are evolving and cybercrime is rapidly growing. Considering that, the need for upgrading the existing payment and monetary system is becoming increasingly apparent.

How Is Crypto Money The Answer To The Current Challenges?

The very process of production or mining, cryptocurrency, disables and solves the basic problem. The process of producing cryptocurrencies is most easy to understand through the process of math algorithm. Let’s simplify …If a computer was given the task of solving all possible solutions of number 10 by a certain math algorithm, through combinations, using all maths operations, then it would look like this:

 

1 + 9 = 10, 2 + 8 = 10, 2×5 = 10, 3456-3446 = 10, 150: 15 = 10, 25-5: 2 = 10 etc …

 

The potential solutions to an algorithm for number 10 is huge! If we take a three-digit number, for example, the number of solutions of the algorithm would be multiplied. Each one solution of the algorithm represents one unit or one denomination of cryptocurrency. For example, Bitcoin has 21 million units or 21 million algorithm solutions. That means that only 21 million Bitcoins can be reached. All these solutions are unique. No other solution can be found to produce another Bitcoin (BTC). Simply put, these are all possible solutions related to that particular number and specific cryptocurrency. There is no way to copy the solutions of the algorithm because the algorithm has already found them. Besides, he encrypted them and put them in the Blockchain database.

Digital Gold

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Since supply and demand directly form the price of BTC and other digital currencies, that is, they act as silver, gold, oil, etc. … we have free price and value formation. But you can be investing in other things, such as digital gold. Now, try to imagine being able to buy gold for some low investment amount. You can do it from your home. Above all, you don’t need to worry about its safety, purity, or storage. Generally, this is a digital model of investing in physical gold. The gold is distributed through the bank digital platforms, broking companies or others approved by the vendors. There are many advantages that digital gold can bring to investors. Here are some of them…

Price And Purity

The prices are defined by the issuers or vendors. According to Kinesis, gold prices offered on digital platforms are extremely competitive. The rates are based on the international price of gold, the USD exchange rate, and the applicable customs duty. The rates are fluctuating according to the state in the market. As for the purity of gold, it is guaranteed by the issuer.

Storage

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The real, physical gold you bought will be held in the custody of the issuer. It will be so until the time you want to sell your gold or have it delivered. In most of the cases, the gold is stored in vaults. The storage usually remains for two to five years without any additional charge.

Redemption

You can do it by selling the gold back to the vendor or take it delivered. If you want to take the delivery, the accumulated gold must fulfill weight criteria. That is usually from 0.5gm – 1gm and more. Investors can also redeem the gold against jewelry purchased from approved jewelers.

Safeguard Measures

The most common measures put in the safeguard interests of investors are in the form of insurance coverage or trustees. You can choose the option you find most comfortable with.

The trustee guarantees for the quality of gold and that the gold is available in the vaults. When kept in the vaults, gold is also insured against any loss.

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