Gold

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How to Invest in Gold and Silver Online

Fiat currency has become unstable. Although governments have declared it a legal tender, it is not backed by a physical commodity. Unlike commodity money that is backed by physical goods such as gold bars or silver, fiat money is not a fixed resource. Certain reasons made the public lose faith in their country’s fiat currency. Take, for example, what happened in Zimbabwe in the 1990s when hyperinflation ruined its own currency. Under the leadership of former President Robert Gabriel Mugabe, the country’s economic conditions were deteriorating. To try to address the situation, Mugabe started a series of land reform programs. Unfortunately, the farms were offered to people who lack experience in agriculture, causing farms to fail, which in turn affected the country’s export revenue. As the country’s economy continued to fail, the value of the Zimbabwean dollar started to crumble. The time came for the currency to be scrapped and eventually replaced by the US dollar in 2009. Kinesis cryptocurrency, on the other hand, uses gold as the traditional store of value. It is making gold a reliable global currency once again. Also, gold trading has evolved to become very user-friendly. Crypto technology will pave way for gold trading to go mainstream. In fact, many people around the world are now using cryptocurrency as a digital medium of exchange. The market for Cryptocurrencies has rapidly grown in popularity so much so that in 2017 alone, the total value of cryptocurrencies increased by more than 3300% with a worth of $600 billion. A certain survey even revealed that 3 out of 4 people already know about the use of these digital currencies. This spread of popularity is remarkably groundbreaking. The success cryptocurrencies have seen recently only means that jumping on the bandwagon is a smart decision, especially if you do online transactions often, and don’t like waiting on the bank to clear funds. With regards to security, you cannot transfer a cryptocurrency without user permission. This means that there is no risk of fraud. It is also impossible for a third party to manipulate your transactions. You will have complete control of your accounts that are hosted on a centralised technology--the blockchain. Financial safety is one of the main reasons why some banks around the world are adopting the technology. To learn more about why you should buy gold, use cryptocurrencies, and how to do it online, keep reading. Why is gold a good investment? Fiat currencies lose their value through the years, either gradually or in a snap. For instance, when people favour a better choice of currency than existing fiat money, their trust in the latter will be lost; inevitably leading to its loss of value as well. Nowadays, the appealing gold-backed property of certain cryptocurrencies acts as better money for people, thus they lose trust in the existing official fiat money in their country. Such fiat currencies include the US dollar, which is one of the biggest currencies in the world. Since the deregulation of banks effectively separated gold from the US dollar, US banks have been printing more and more fiat money that they could lend to individuals, organisations, and even governments. Seeing that the US dollar is a fiat currency lent by banks to the government itself, one could easily foresee its downfall when banks start pulling back their cash with huge interest rates. When the US dollar falls, all other currencies pegged on it will also fall. Thus, people, governments, and other entities want to find a stable currency that won’t feel the impact of a domino effect. Thus, the astute investor and other entities consider it smart to purchase gold bullion, including in gold-backed currencies. This is because a gold standard could give a long list of assurance, which includes the following: A currency’s value will be backed by a stable asset, like gold, silver, and other precious metals, unlike common fiat currencies that lack guarantees. It could help the economy to achieve excellent stability and self-regulating capacity. The government could print as much money as the amount of its gold reserve, which could be expanded by earning more precious metals. It could discourage government budgeting problems, debts, and even inflation. Encourages a nation to be more productive, which could help it earn more gold for its reserve. Overall, you could see that gold standard could seriously help a country in many ways, especially in stabilising its economy while solving various monetary problems. When fiat money such as the US dollar collapses, it could help people, governments, or even a nation to remain standing still. A handful of experts know such facts about gold standard currencies, thus various ways are being developed regarding how to invest in silver and gold. One of these methods is using the blockchain, as gold-standard cryptocurrencies get more and more popular throughout the world. How blockchain will power the gold revolution There’s no denying that gold is indeed a valuable asset with the price of gold, or rather it’s value holding its own and increasing regularly over the centuries. It slowly, yet steadily, increased its value through time, regardless of more or fewer countries using it as an official currency or not, gold prices have always risen. It’s repeatedly proven throughout history that good money always has better economic power than fiat money, and gold is undoubtedly is the best asset to back any gold-standard currency. This pushes people to find ways on how to invest in gold and utilise it for day-to-day transactions. The problem is, it’s not easy to acquire, store, and move gold. All processes involving real gold are expensive in nature, pushing innovators to find new platforms where gold can move efficiently as a currency. This is where the blockchain technology comes into the picture. The blockchain is the platform that has contributed to the boom of cryptocurrencies, as it effectively facilitates various transactions and storage of cryptos. All the same, the top cryptocurrencies are also fiat coins, which leads to the problem of notorious volatility and instability. The blockchain is almost a perfect platform, but common digital assets are quite problematic in many ways. Therefore, innovators came up with the thought of transforming fiat cryptos into gold-standard currencies, which gave rise to gold-backed cryptocurrencies such as the Kinesis money to run on the blockchain. Such kind of crypto has real gold backing it up, with a one-is-to-one ratio of the number of crypto coins to the amount of gold in the reserve. Say, with the KAU crypto coin of Kinesis, 1 KAU is equal to 1 gram of gold in the safe reserve of the company. Such a concept made it far easier for gold to hop on the virtual stream, thus making it easier to use in various transactions. Considering that this is blockchain we’re talking about, you can make sure that gold backed cryptos could provide stellar performance without compromising security, thus keeping cryptos from being lost. As a result, the problems of using gold as an efficient currency finally gained a straightforward solution. With the use of the blockchain, gold-backed cryptos could efficiently run on lesser expenses and people and entities can easily store and move gold. People just have to learn how to invest in gold and silver, so they could start reaping the benefits of gold standard currencies through the blockchain. Of course, the choice of investing in gold mining companies and buying gold and some other traditional methods are still there, but the stablecoins or gold-backed cryptos are currently the best options. How to invest in gold and silver Knowing about the unreliable angle of fiat currencies could push you to look for ways on how to invest in gold and silver. Of course, you wouldn’t want to be badly affected with the collapse of fiat money that you use, and the best way to protect yourself is to have enough gold and silver to shield you from a bitter financial downfall. The first idea you would probably think about is to buy sufficient gold and silver, which you can keep in your own safe reserve. Say, you’re having problems with your fiat currency and you have enough gold and silver with you, you can simply sell them up for enough cash to cushion you. This could also be very beneficial when a gold standard currency becomes available for you since unlike commodities, you can easily trade your precious metals for it. Before you invest in silver or gold, however, you need to consider several things: Where are you going to store them? Do you have a secure vault in your home or somewhere more difficult to find by thieves? What will you use the gold for? Who will accept your gold as money? Can you afford to pay premiums and taxes? Don't you think you're better off with gold jewellery than gold bullion? If, in the end, of your due diligence you still want to pursue investing in physical gold, start searching for a reliable dealer who sells bullion and ingots at the right gold price. Then, choose from a range of bullion. Coins are the most common form of bullion that look like actual coins and are used as currency. There is a limited production of gold coins, however, making them rare and expensive. Rounds may look like coins but they lack circular value. The size of the round bullion, however, will impact its value inversely since it is based on precious metal content. So, the smaller the rounds are, the higher their premium rates over spot. Bars are popular among investors because of their low premium over spot, similar to rounds. They are also easier to store, stock, and organise. Best purchased in bulk. Another way to invest in gold or silver is to put your investment in gold mining companies. You just have to choose the best firm where you can trust your investment to, so you can have favourable returns or have your own precious metals. Aside from the traditional ways of investing, you can also to invest in stablecoins for significant perks. Stablecoins are cryptocurrencies that are backed by real assets, such as real currencies and precious metals. An example in the crypto space is the USDT coin. Although stablecoins backed by currencies are more popular, there are some that are backed by precious metals, like gold and silver. Thinking of cryptos running on the blockchain, this goes without saying that stablecoins let gold and silver run on the blockchain as well. As long as you’d invest in the best stablecoins available, you can expect to have gold and silver as an efficient currency without problems. You just have to look for the right stablecoin that could promise a good return on your investment, with Kinesis as one of the best options. After which, you’ll have a one-is-to-one ratio of crypto coin to real precious metal in a safe reserve. Not only that you can rely on it as a good investment, but you can also use your gold for regular transactions. And if the fiat currency you’re currently using falls, you can be sure that gold-backed stablecoins will stay afloat. Investing in precious metals with Kinesis money Looking to invest in gold? It will prove one of your best ideas yet. However, investing in stablecoins backed by precious metals is an even better move. This can help you a lot to have a secure investment and experience using gold and silver efficiently for regular daily transactions. All you need to do is look where to trust your investment to, so you can make sure of having enormous perks from it. This is exactly where Kinesis comes into play. Kinesis is a digital currency that is reliable, usable, and globally accessible. It is backed by gold and silver in the form of KAU and KAG respectively. For every currency you buy, the ratio is as follows: 1 gram of gold to your 1 KAU 10 grams of silver to your 1 KAG Investors will receive KAU and KAG upon investing, thus ensuring they own a certain amount of precious metals under their account. Investing in Kinesis can help you have all the gold and silver that you can have, which could be helpful especially when you use them on usual transactions. The 1:1 allocated gold and silver are insured and kept in third-party vaults that are completely independent of Kinesis. The vaults are audited after every 6 months by third-party holdings. With Kinesis as an investment: You have full and direct ownership of the legal title to the bullion Fully redeemable The bullion you own is sourced from refineries approved by ABX Gold bullion is stored in third-party vaults through ABX Compared with physical gold and silver and with cryptocurrency, Kinesis combines the best and eliminates the worst of both assets. Intrinsic Value Gold: Yes Kinesis: Yes Cryptocurrency: No Volatility Gold: Low Kinesis: Low Cryptocurrency: High Liquidity Gold: High Kinesis: High Cryptocurrency: Low Yields Gold: High Kinesis: High Cryptocurrency: Volatile Transaction Fees Gold: High Kinesis: Low Cryptocurrency: Low Through Kinesis money, you’re guaranteed a safe, high-yielding investment in precious metals. So how much are you planning to invest in? Invest in Kinesis gold coins To have cryptos backed by gold from Kinesis, you just have to communicate with them and express your interest. Next, indicate how much you want to invest, and you can open an account with your share of gold. You’ll receive a one-is-to-one ratio of 1 gm of gold to 1 KAU, which you can use to pay for products and services or use for crypto trading among others. You don’t have to worry because your gold is safe in a third-party vault, and you can easily get the physical precious metal any time you want. Invest in Kinesis silver coins Aside from gold, you can also invest in silver coins from Kinesis. This will come in the form of KAG, which is equal to 10 gms of silver for each 1 KAG. Express your interest to invest in silver with Kinesis and buy the silver-backed cryptocurrency. Just like the KAU, you can use the KAG for a variety of transactions. Whether you invest in KAU or KAG, you get the benefit of spending Kinesis currencies in the real world. Come May this year, the currencies will be minted and can be used as real money. Investors also have the option to apply for a Kinesis Debit Card that will enable cardholders to spend the Kinesis currencies they own where Visa or Mastercard is accepted. The gold and silver-based currencies are instantly converted to fiat and other cryptos. Unlike real-world credit cards, however, transactions fees are minimal and the transaction process is secure and fast. Set up Your eWallet Before you can buy Kinesis currencies, you must first have your Ethereum ERC20-compatible eWallet ready. Kinesis recommends using Metamask, the most popular eWallet available, but you do have the option to choose other ERC20-compliant eWallets. These include MyEtherWallet, Mist, Parity, imToken, Trust, and Cipher. Make sure to thoroughly research each option to find the best one for yourself. It is very important to verify the credibility, security, and functionality of a third-party eWallet, as Kinesis does not take any responsibility when you experience problems from using it. Just to be sure, you should not use a cryptocurrency exchange address or eWallet to apply for Kinesis KVT, as such an address/eWallet generally does not support ERC20 tokens. And KVT is only supported by an eWallet that is ERC20-compatible. Aside from knowing how to invest in Kinesis, check out other features that the platform provides, including tips on how to grow your stablecoin stocks, effectively increasing the amount of gold and silver in your account. Difference between physical and crypto gold Speaking of value, there is virtually no difference between physical gold and crypto gold. Both of them have proven to be helpful to investors and have been used as speculative investment and a safe-haven asset at certain points. But in certain aspects, physical and crypto gold have important differences from each other. These include something as basic as the very nature of the assets themselves. Physical gold is tangible, but crypto gold is digital. For more than 2,000 years, gold has been harnessed as a form of currency. And, as such, its supply increases as miners retrieve more of it from the ground. Once the precious metal is mined from the ground, it is mostly used to create precious goods, such as jewelry. But when it comes to investing in gold, you can purchase it in various forms. For example, it can come in bullion that you can buy. And, you can gain exposure to gold price movements through different financial instruments, like gold futures and exchange-traded funds. Frequently, physical gold has generated significant attention as a main safe-haven asset, in the same way that many investors look to real estate.. On the other hand, crypto gold is a digital currency. Like physical gold, it is also created through mining. The only difference is that the process is entirely electronic. In essence, crypto gold miners determine transactions and aggregate these transactions into blocks. In turn, these blocks make up the blockchain of the digital currency. Every time cryptocurrency miners complete a block, new crypto coins are released. Under the protocol that governs cryptocurrencies, new coins are released approximately about every 10 minutes. People will then use these crypto coins to engage in transactions or make investments online. In the world of cryptocurrency trading, crypto gold is backed by physical gold through Allocated Bullion Exchange. While both have certain differences, they are generally the same in a way that they are equally satisfying and fulfilling to possess. Cryptocurrencies that are backed by gold are completely different from other cryptocurrencies that suffer from the risky speculative investments. If you are thinking to invest in gold, you will be able to benefit significantly from it by first comparing and contrasting physical gold and crypto gold. It is important to be well-informed, after all. How to easily spend your crypto gold One of the most popular instruments used to make payments using money these days as an alternative to cash is the debit card. Compared to the credit card, the debit card is more widely used, as it is more convenient to use for everyday purchases. Now, Kinesis aims to take things a notch up by offering the Kinesis Debit Card. This unique type of debit card relies on digital tokens for any type of transaction that you will do. Whether you want to order that favourite steak in a restaurant or just want to enjoy coffee at Starbucks, you can use it for payment. In essence, the Kinesis Debit Card will enable you, as Kinesis currency holder, to spend your gold or silver-backed cryptocurrencies with ease anywhere that accepts Mastercard or Visa. Here are the perks that you will enjoy when you invest in gold with Kinesis and use this card: Instant conversion of KAU and KAG to fiat The Kinesis Debit Card allows you to make the instant conversion of KAU and KAG into fiat currency and spend it on any purchases that you will make anywhere in the world. Unlike other cryptocurrencies, Kinesis transactions will only take 2 to 3 seconds with their bespoke network. Add and spend multiple cryptocurrencies from your eWallet The payment process using the Kinesis Debit Card is done dynamically through the connection between the card and mobile eWallet, where you store your crypto coins. Fast and secure transactions with minimal fees You can enjoy more savings from using the Kinesis Debit card. Unlike other debit and credit cards, moving funds to and from your mobile eWallet into and out checking or savings account will only cost $1.00 per transaction. Moving money from your eWallet to another mobile wallet is free. There is even no merchant processing fees. As for transferring from Kinesis to mobile eWallet or the debit card, it will only cost you 1% of the transaction amount. So, are you wondering how your money will be deducted from your account? Well, the process is made possible on the Kinesis Financial Network (KFN), which is basically a mobile banking system created by Kinesis to connect to Mastercard and Visa. With the Kinesis Debit Card, gold and silver are made available in everyday transactions once again. Using eWallet for the Kinesis Velocity Token With your eWallet now set up, you are able to purchase Kinesis Velocity Token (KVT) using either Ether or Fiat. If you choose the latter, your transaction is made via Fiat Transfer that, once completed, will be followed by KVT transfer into your eWallet. You should not use a cryptocurrency exchange address or eWallet to apply for Kinesis KVT, as such an address/eWallet generally does not support ERC20 tokens. And, as previously implied, KVT is only supported by an eWallet that is ERC20-compatible. Kinesis will only release up to 300,000 tokens, so you should buy them while they’re still available. Experience the gold standard in digital currency without the security and volatility concerns.

Zubair Bukhari
Zubair Bukhari

22/01/2019

When the Dollar Crashes, the Gold Standard Will Emerge

All currencies used to be backed by the value of gold - the Gold Standard. Then, economic mechanisms developed over time to a point where a handful of people had the means to conjure trillions of dollars, euro, renminbi, and pounds out of thin air. For example, in the 1971, brutal Ugandan dictator Idi Amin raised military spending by 500%, which spiked inflation 700%. When an ex-finance minister warned that Uganda was headed towards bankruptcy because of bloated military spending, Amins answer was "Print more money." Amin doubled the money supply between 1976 and 1978. On the ground, gasoline cost $39 per gallon and sugar $5 a pound, with the monthly minimum wage set at $30. What was once the dastardly action of a brutal African dictator is now mainstream. In the United States, Federal governments issue debt to pay for their expenses, and then print more dollars to pay off trillions of debts. Debt is at the heart of the scheme: In the US, banking systems were deregulated during former President Bill Clinton's term in the 1990s, which heightened debt's influence over the country's economy. Since then, European vassals followed on through the early 2000s. Such deregulation has also given more power to banks by simply handing out more debts to governments, companies, and individuals. As a result, around 97% of all the money circulating in the West comes from banks through debts and loans. With that said, it is important to note that banks make a huge portion of their profit from interests that are generated from loans. This means that banks are basically earning and generating more cash that does not offer real value to the economy. Now, as large amounts of this money are in circulation, one could easily see a chaotic problem when banks would start recalling outstanding liabilities or debts. As history shows, this economic collapse timeline has begun building up since the end of World War II, reached its peak during subprime manufacturing crisis from 2007-2009, and was expected to cause a global economic crisis that could collapse around 2016 or 2017. Such an event could have left a huge economic impact on a global scale, causing poverty, famine, and even death among many populations. The ruling elite class, on the other hand, would still remain on top, pushing to begin the monetary cycle again from square one. Now, allowing wealthy people to be in control of everything and keeping the public uninformed can cause the cycle to repeat continuously. Why Money Has Value Money can maintain its essential functions only if people have a high level of trust in the monetary unit they are using as a stable store of value. In the event that this trust is lost, the people would give up using the monetary unit, either suddenly or gradually, in favor of something else. Based on historical records, "bad" money would drive "good" money out of circulation, especially when faith in its stability is lost. Though it might still be used in most transactions, especially when it is the mandated legal tender, it will no longer be trusted as a store of value. In this case, people will then hoard the "good" money as the superior store of value until the "bad" money is finally totally abandoned. Then, a return to using the "good" money entirely becomes possible. Take a look at this: People are now using traditional money. Then, cryptocurrencies backed by gold are rising in popularity. Jumping on the bandwagon, some people are then investing in gold coins and using cryptocurrencies for their online transactions. While it does not seem that cryptocurrencies will entirely replace the traditional money that we are using today, time might come that they will. This monetary cycle, which is good-bad-good, has been happening throughout history. What Is the Gold Standard? The Gold Standard is a system where nominal exchange rates between participating countries are fixed with the value of gold. So, if a gold ounce is valued at 20 US dollars and 10 British pounds, then 2 US dollars should be exchanged for 1 British pound, as a fixed exchange rate. Under the Bretton Woods system, the US was supposedly following a gold standard in implementing its monetary policy, while the rest of the world set their exchange rates in US dollars. While it was impossible for the ordinary people to redeem their US dollars or other money into gold, the central banks can do it, theoretically speaking. Also, countries can participate in the Gold Standard for a time, leave it, and return it, just as it is possible for them to fix their exchange rates against other currencies. Take what Hong Kong did with the US dollar, for example: Like what other emerging market countries did during the 1990s and 2000s, the country had fixed exchange rates with the US dollar, but then left it during the Asian financial crisis. The fixed exchange rate economic system implies that governments do not have the power to completely set domestic interest rates. This is what is known as the "impossible trinity" in economics. With such, one cannot have free capital movement between the country and other countries, fixed foreign exchange rates, and independent monetary policies at the same time. During the Gold Standard era, which covers the early 20th century, this type of system meant that monetary policies were set according to international capital and trade flows. It also entailed that during a crisis where a country is having a capital flight or a current account deficit where the central bank is not also able to cut interest rates to fight the crisis, interest rates are forcibly raised to fight the capital flight, worsening the recession. However, this was not an issue among the developed countries in the early 20th century. But when active monetary policies were needed, there were great incentives to leave the Gold Standard. This happened during World War I: The costs of war were huge and could not be financed solely by the command economy and debt issuance. As a result, some seigniorage, where governments issue currencies, happened. This was serious in many countries, especially in Russia as it led to inflation. For other countries, it increased their debts more because of more developed economies, such as the UK and France. As it could not be reconciled with the Gold Standard, a passive monetary policy was needed, though it is not an active one. Then comes the Bretton Woods dollar-gold system, where the US dollar was convertible into gold and the rest of the world pegged their currencies to the US currency. Now, countries were able to periodically adjust that peg to gain a comparative advantage, helping with their exports. The system was especially helpful to European countries to help in their recovery from the devastation of World War II. The system worked and was relatively stable from 1945 to about 1965. What became the ultimate doom of the Bretton Woods system was the growing lack of faith in the willingness of the US to actually convert their dollars into gold, which resulted in large government deficits under the leadership of President Lyndon B. Johnson. He paid for both the mounting costs of Vietnam and his Great Society initiatives. In a monetary system that is backed by gold, government deficits must be paid for by also borrowing such precious metal. Obviously, it was expensive. And, as deficits grew, the world gradually lost faith that the country was actually willing to pay for everything with gold. Unlike switching to a non-gold based dollar, inflation would just eat away the real debt burden, which is politically more flexible and practically much cheaper. This loss of faith further grew as the market price of gold diverged from the official US conversion rate. Hypothetically, a country would be able to convert its dollars into gold and then sell the gold for dollars, making a profit in the process. However, all fixed-rate commodity-backed systems would be put in danger with such a divergence taking place. And, as international trade grew during the post-war period, tensions between the market rates and fixed conversion rates also grew. So, as the willingness to convert dollars into gold grew, other central banks eventually showed interest in converting their US dollar holdings into physical gold before America's stock of gold depleted. The first country to request such a conversion was France, but other countries were privately showing the same interest. Like any other bank, central banks are obliged not to lose money. Considering the situation, they were considered to be only acting in their best interests. When France officially requested such a conversion, it signalled a clear sign that the dollar-gold standard will fail. So, President Richard Nixon, under his leadership, made one of the most shocking economic measures taken by the US government in history—the unilateral cancellation of direct international convertibility of the US dollar to gold. The decision was based on the notion that there would have been no point in converting dollars into gold for France, as all other dollar holders would have followed. As a result, the US would have shipped all of its gold to other countries, which would also end up the country suspending such conversion anyway. As a result, it was scrapped. Why did America abandon the gold standard? In the early 1930s, the US government faced a huge problem of the Great Depression where they were left with little influence over the economy, resulting in large rates of unemployment and severe deflation. This pushed the US and other government entities to raise interest rates to prevent draining the gold reserve, as it could dissuade people from cashing in their deposits. Problem is, such move made it more difficult for people and businesses to borrow cash. To solve such dilemma, President Franklin D. Roosevelt detached dollars from the value of gold, thus helping the government to release more money into the economy with favorable interest rates. On March 3, 1933, the President closed the banks for 10 days. When they were reopened, all of the gold has been turned in to the Federal Reserve. This kept people from redeeming their dollars for gold. A month and 2 days after the banks were closed, all Americans were ordered by the President to turn in their gold certificates and coins and have them exchanged for paper currency. Gold bullions, coins, and certificates were given a set price of $20.67 per ounce, and they must be all returned by May 1, 1933. 9 days later, the gold reserves at Fort Knox were created through the $300 million in gold coins and $470 million in gold certificates that were delivered to the Federal Reserve. According to the author of “Lords of Finance” book Liaquat Ahamed, “Most economists nowadays agree that the separation from gold makes around 90% of the reasons for US’ success out of the Great Depression.” Until 1971, USA allowed other countries’ government entities to exchange dollars for gold. However, President Richard Nixon stopped such practices to prevent foreigners from digging through the American gold reserve. Gold's set price increased to $35 per ounce in 1934 and continued until 1971. On August 15, 1971, President Nixon announced that the US will no longer convert dollars to gold, fixed price or not. This marked the end of the gold standard. It wasn't until 1974 when Americans are allowed to own gold bullion again after President Ford signed the legislation. Despite the US abandoning the gold standard, gold remains an asset value, helping protect investor's assets. Benefits of a gold standard The events mentioned earlier have turned the dollar into pure fiat money, or cash without any valuable assets backing it. Thing is, the history has tons of examples that prove fiat money almost always turns back to its base value of zero. Like the Denarius of Ancient Rome, for instance, in 50 A.D. denarius coins were made of pure silver. Nonetheless, Roman emperors have reduced the silver content of denarius through time, until it only contains around 0.05% of the precious metal. After the collapse of Rome, the low value of denarius coins made them unacceptable for various goods and services, thus making them basically worthless. It also happened to the old currencies of China, France, Germany and other countries throughout history. The symptoms of fiat money losing its value is already observed with dollars as well. This posed a serious threat towards dollar and other currencies pegging on it that couldn’t be ignored. This is where investing in gold coins comes as an important consideration. With a gold standard: A money's value is backed by a fixed asset Provides the economy with a stabilising and self-regulating effect Money can be printed as much as the same amount of gold that the government has Discourages inflation, debt, and government budget deficits More productive nations earn more gold when they export, for example, and boost investments and reserves Unfortunately, countries without any or has little supply of gold are at a competitive disadvantage. But even those that do like America may not want to return to a gold standard because of its negative impact on the economy. For instance, the US government will no longer have the complete freedom to manage the economy, constricting its ability to do so. In times of inflation, the Fed can't reduce the supply of money by raising interest rates. But gold is in debate again. The coming gold standard There are many available write-ups talking about the rise of gold value, and how it would continue through the years. It's even expected to go beyond the value of fiat currency units, as the latter loses its perceived value. Such observable factors could tell a lot about the new gold standard coming later on, which people definitely need to prepare for. This is especially true that such monetary system significantly varies from the current fiat currencies the world commonly has. The gold standard will not merely change the physical money, but will also affect finance on a large scale, which includes banking and businesses. It could be largely beneficial for some countries, industries, and markets, but could severely harm others as well. From there, one could see that asset allocations and investment strategies must be modified to fit in the new system, such as new methods of investing in gold coins. But it's only a matter of time before a new global gold standard will arrive. Everyone should brace for a possible rough transition and their stars if things happen smoothly. Investors and businesses best prepare for the coming of the gold standard, finding ways to protect their wealth and to flourish through the new monetary system. Because failure to prepare could result in assets lost and generation of hard work down the drain. There’s a huge risk accompanying the arrival of the new gold standard, and it would leave people with no choice than to throw zero-value fiat currencies as a thing of the past. It would be best for people to do practical preparations to survive the transition and through the new monetary system, especially because the public couldn’t rely much on government entities for help. After all, government officials will probably dilute the system for their advantage, instead of providing sufficient assistance for the people in their countries. Big business using blockchain Tracing back, the original Bitcoin paper was published by Satoshi Nakamoto in 2008, and it took around a year for the first Bitcoin to be made. Subsequently, it took more years for the technology community to conceptualise the blockchain system, much more its actual completion. Nonetheless, Bitcoin and its related concepts broke out after media organisations like Newsweek and New York Times made their investigative reports in early 2014 about the huge potentials of the said cryptocurrency. In just a year, the largest central banks all over the world, (which includes the Bank of England), began their research and published papers on the potentials of blockchain technology. But the paper is focused more on the system that runs the Bitcoin, instead of highlighting the crypto itself. After which, it has slowly become common knowledge that the blockchain technology could severely affect various transactions of finance and commerce worldwide, which include various financial technologies. Due to this, start-up businesses and banks have tried to find ways to cope up with the innovation brought by blockchain technology. The goal is to incorporate blockchain throughout various departments or divisions and to streamline different processes with it. Aside from merely coping up with the new technology, businesses and banks also aim to provide efficiency with their operations, especially for the convenience of clients, customers, and partners. Kinesis benefits Knowing all the possibilities of an economic catastrophe in the not-so-far future, you should definitely find the best ways for you to prepare yourself for the coming of the gold standard monetary system. Of course, if it’s all about the circulation of real gold back into the economy, the best way to prepare is to invest in gold coins before the big economic crash. This is where Kinesis comes in. Kinesis is one of the best ways for you to survive the possibility of a huge economic meltdown because of the new gold standard and could help you flourish through and after the transition. It is a cryptocurrency backed by real gold, running on blockchain for optimal benefits like: You can easily buy gold online through its platform, allowing you to own a certain amount of real gold for each crypto coin you have. Your gold is safe in the Kinesis reserve, giving you the assurance of having enough “gold backed coins” through and after the transition phase of the new gold standard. You don’t have to worry about fiat currencies running out of value since you already have your own currencies backed by gold in the Kinesis reserve. Crypto coins of Kinesis runs on the blockchain, which basically means it’s on a reliable and safe platform for virtual transactions and storage. You can use crypto coins of Kinesis on various transactions right away. If you have real gold in the Kinesis reserve, you can claim your gold anytime you want. These are just a few of the benefits that Kinesis can provide you with, before, during, and after the global economic crash. It is the ultimate stablecoin because it is backed 1:1 by physical gold and silver, depending on whether you have KAU or KAG, respectively. Gold is stored securely on third-party vaults, eliminating counterparty risks. Check out Kinesis.money for more info on how to buy gold from Kinesis and what more you can do with this digital currency.

Zubair Bukhari
Zubair Bukhari

03/01/2019

Commodities and Supply Chains in the Digital Era

When the internet was invented, only those that were designing the architecture behind it could truly envision the large scale effect that the internet would have on the world. Today the internet is as ubiquitous as any other technology, and has been proven to enhance almost every industry in the world. One might be able to look at the timeline of the internet and deduce that blockchain technology is currently on the same trajectory. Blockchain has a lot of promise for a technology that has been around for barely a decade. Programmers and data scientists can see the advantages that blockchain could bring the world if the technology is properly developed and scaled. These advantages apply to every industry, be it finance, agriculture, or manufacturing. To understand blockchain on a simplistic level, picture it as a massive cryptographic ledger that can be accessed from anywhere in the world, integrated into other technology, added to, but conversely cannot be changed in any way. This is the true promise of the blockchain. An immutable ledger, that no one central party controls, and cannot be tampered with or censored. When you start to think about the many industries this groundbreaking technology can be applied to, you begin to see how truly revolutionary this technology is. The Fintech industry is already seeing a massive overhaul with the adoption of blockchain. Worldwide payment networks are being developed that will eventually replace traditional banking applications. This is one of the first and most practical use cases that the forefathers of this technology envisioned. However, there are other industries that are far behind in the adoption of new technologies and need a major overhaul. The manufacturing and shipping industries are in desperate need of an update. Supply chains that move commodities around the world are relying on written documents and manual checking to complete these supply routes. This is the situation with the flow of commodities from all over the world. These industries have very much stayed the same in principle for decades, even centuries to some degree. Blockchain is currently being tested and applied to these industries, and the resulting changes could be enormous. Supply chain Management The import export business is an industry that globally accounts for trillions of dollars every year. Since ancient times, this industry has made or broken countless civilizations. Many of the world’s wealthiest nations and individuals are involved heavily in this sector. Interestingly enough, this industry is one of the few today that hasn’t changed much since the dawn of man. Certain goods and commodities have always been prevalent in one country or region and absent in others. Common examples are rubber and coffee in South American countries, or spices from India. For reasons regarding the climate or ecosystem of plants, these goods have mostly remained exclusive to these countries. This is the foundational principle of international commerce, manufacturing and then shipping goods from one country and selling in another. Many nations across the globe have most of their income related to import and exporting. With the importance of this industry in mind, it is quite baffling to consider that in the age of the technology available to us, this industry still mostly relies on manpower, written documents, stamping orders and other systems of manual checks and procedures. Its estimated that an astounding 90% of all commerce relies on freighter ships and shipping containers. This is because while we all live online looking at digital ads and product reviews, we are very much still dealing with physical, heavy, and cumbersome products. From handbags to cars, everything is manufactured somewhere, then shipped off on ship to be sold elsewhere. The tracking of these goods and commodities is quite frankly, no insignificant task. This is what we refer to as supply chain management. This is the process of transporting and tracking goods from the point of origin to the point of commerce or consumption. Supply chain management is a 15 billion dollar a year industry that is continuously growing. Many goods every year are lost or stolen, confused with someone else’s order or any other possibility. Then there is the question of authentic goods. Replica factories specialize in making exact 1 to 1 copies of designer goods and electronics, for a much lower cost then what your business offers. This is a complicated issue, but blockchain technology promises to provide a solution to the many problems companies face. Problems with Supply Chains The supply chains that exist today are incredibly complex. After all, we are discussing commodities from all parts of the globe. Electronics from China or Japan are sold in as far away regions as the USA or Europe. Depending on the product and its final destination, the chain can span over dozens of countries, with many stops in between, numerous invoices and inventory sheets, and lots more when you consider all the customs and international laws and regulations that must be accounted for. There are severe issues with the transparency between parties, and many aspects of theses supply chains can be automated and optimized to make them more efficient. Blockchain is a publicly available ledger that openly shows all data that is recorded on it. This can certainly help with the many transparency issues in current supply chain models. The lack of transparency that current exists causes real issues for merchants and consumers in several ways. Shipments are sometimes lost or held up without the knowledge of either the shipping or receiving party. These types of hold ups can be for many reasons, but often times there are international customs issues. One of the biggest overall issues however, is that consumers do not know the true value of products or the manufacturing conditions of the goods they are purchasing. This has caused severe humanitarian concerns for decades. In just one example, manufacturing has been leaving USA and European soil for foreign Asian markets since the early 1900’s. Major western corporations establish factories abroad to both bypass health and labor laws in their home countries, but also to pay much lower wages to employees. When people purchase “fair trade” products they expect that these commodities were sourced and sold at a certain standard for the people that produce them. Unfortunately, when these producers are on another continent, it is not easy to guarantee the conditions that surround these products. The same goes for organic or charity based products. The fair value of goods is not widely known either. There is a whole market surrounding price discovery for commodities trading worldwide. The lack of transparency makes finding the true manufacturing costs of goods impossible. It’s also similarly very difficult to verify the materials used, the origins of these materials, or to investigate supply lines. It is often times near impossible to prosecute parties or to prove guilt in cases of fraud. The system is built in a way that information is withheld on a need to know basis which in a way is an understandable destination that we have reached as a capitalist society that rewards ingenuity and progress. Manufacturers and corporations rightfully protect their own secrets and business edge from the competition, regardless if they use bad practices or not. Integrating Blockchain with Supply Chains Though there are many different versions of blockchains, most share core similarities. When it comes to adoption of the technology, it is up to the individual enterprise to decide whether they should adopt an existing blockchain network or develop their own. Not all blockchain networks need to have a native token or currency to operate, and not all need miner support. Blockchain technology can be adopted on its own and this is an important distinction from blockchains like Bitcoin or other major cryptocurrencies. The strength of blockchain ledgers like Bitcoin comes from how publicly available and widespread they are. The core principles behind Bitcoin and cryptocurrencies are immutability, censorship resistance, not owned by any central party, and highly secure. Blockchain technology offers numerous solutions to every problem or shortcoming in the supply chain and shipping industries. First and foremost, payment, billing, and the transfer of money are the most clear and direct use cases for this new technology. Blockchain allows anyone in the world to transfer funds without any median party controlling the transaction. Each transaction is a direct peer to peer exchange, that is settled in a near instant manner. There is no waiting period of several days for a payment to clear, and the transaction is live on the blockchain to check immediately upon leaving the associated wallet. For business owners dealing with processing payments to many worldwide partners, there are obvious advantages to using blockchain for payments. However, this would require using cryptocurrency which means transacting in something other than your native currency. For all matters regarding contractual obligations, there is a new development in the cryptocurrency world. Smart Contracts are new types of applications that are made possible with cryptocurrency and the blockchain. These contracts are written in code and are self executing when certain predetermined conditions are met. Once established, these smart contracts cannot be changed in most cases. The funds mentioned in the smart contracts are held in a central wallet, only to be released when the conditions are met. An example of these conditions in this case would be, when the shipment is scanned in by the receiving party and all goods are accounted for. This means that essentially, you can use these contracts to replace traditional lawyer drawn contracts and escrow services. In fact, as these contracts exist outside any jurisdiction or country, they are superior in the sense that there is no need to go through overseas legal boundaries. Prosecuting parties in foreign countries is no easy affair. These smart contracts allow you to have a legal agreement that both parties have to uphold or forever lose their funds. The possibilities are astounding to consider. Drawbacks and Challenges Enterprises all over the world are looking at blockchain technology and wondering how they can harness this technology for the benefits while mitigating the risks. The risks involved are precisely why the adoption rate has been slow as far as the technology is concerned. Multi million dollar corporations do not like to take chances that could potentially cost them millions. This is why the US military and banking centers are still running windows XP. When important systems or millions of dollars are at stake, it’s hard to convince leaders to look ahead and see the benefits of adopting new technologies. That being said, there’s no denying that blockchain technology comes with certain risks for certain industries. The ledgers and networks themselves are heralded to be very secure, but there are other aspects to keep in mind. First, the ecosystem behind cryptocurrencies is still very young. It will take time to build up the elaborate and extensive networks that can handle the volume of transactions that industries across the world need. Visa processes 2 thousand transactions per second on average and is capable of 50,000 or more. Bitcoin, the industry leader in cryptocurrency, processes a paltry amount of less than 10 per second. On that note, the Bitcoin network in particular has been criticized for its poor handling of the scaling debate. This is just one example for the different cryptocurrencies but it is an alarming one. Next, let’s consider the potential drawbacks of using cryptocurrency for transactions around the world. First and foremost, there is currently no way to do transaction pullbacks or recalls like in a traditional banking account. This is an intentional feature that is very important to the system. Once sent, transactions are out of your control, and if sent to the wrong address, they are potentially gone forever. This is not a feature that is easy for business owners to accept. Also, to consider using Bitcoin or other major cryptocurrencies for transactions, you have to account for the expected and violent volatility. Not many currencies in the world regularly have the peaks and valleys seen in Bitcoin over the last decade. As far as the market looks now, this doesn’t seem to be something that will change anytime soon. This would almost certainly prevent business owners from holding these cryptocurrencies. Instead they would only purchase them right before they need to make a transaction. Another important note is that experts in setting up and maintaining these systems are few and far between. It won’t be an easy feat to find someone qualified to join your organization as an in-house professional. Therefore almost all duties will be performed by contracted specialists. Many organizations would almost certainly prefer to have experts work for them directly, but sadly this field will need some time to catch up to the growing demand much like computer security professionals are always in high demand. Blockchain Used in Real Business Applications Despite these challenges, blockchain is already being utilized in several different businesses worldwide. Many massive shipping organization have begun experimenting to try and gain an edge over competitors. There are also several independent companies that have formed around this new budding technology. They plan to make specialized systems and networks that can be integrated with existing supply lines. IBM IBM was once a monstrous force in computers and technology. In recent years they have had trouble competing with other giants of technology like Apple or Google. Though they have seen ups and downs throughout the years, it seems IBM is betting big on the future of blockchain and cryptocurrencies. Throughout 2017 and 2018, IBM has made big announcements regarding partnerships with various cryptocurrency startups. The computer titan has made their way into the shipping and supply chain management industry. Right now, companies around the world are utilizing IBM’s blockchain technology to manage every step of the traditional supply chain system. IBM’s blockchain solutions help to track food shipments from anywhere in the world, with accurate location tracking in seconds instead of days. Shipments are traced accurately and are no longer lost among container ships. International payments are streamlined and optimized, with instant settlement systems. Payments overseas previously have taken days or weeks to clear, but now billing and payments are quick and efficient. The food supply chain industry is one of the most important that IBM is tackling with this new blockchain initiative. This industry is in desperate need of an overhaul to protect consumers and producers alike. The lack of transparency in this industry has caused problems for most of history. There are many labels that consumers pay extra for like organic produce or “free range” meat. There is no certainty that these goods match the quality that is expected, or that they come from sustainable producers worldwide. IBM’s blockchain tracks these food products every step of the way from the farm to the processor, the distributer, and finally the retailer. The information and data needed is meticulously recorded and verified at all times. This helps minimize waste as well, with the accurate amounts being transported, stored and sold are recorded and the data is processed by data engineers to map out and review. There are no blind spots in this supply chain and IBM is taking the steps to enhance supply chain management with blockchain technology. Blockshipping Blockshipping is a Danish startup company that is taking aim at the mismanagement behind global container shipping. Like many entrepreneurs, this company is looking at the supply chain management industry and thinking of how to make it a better process. Interestingly enough, Blockshipping is creating a registry for freight containers, the world’s first in fact. This registry is blockchain based and will provide real time information for 27 million containers worldwide. This in turn has the potential to save the shipping industry billions of dollars every year. Container based shipping accounts for a massive 60% of all seaborne shipping, which is 90% of all international shipping worldwide. Just like commercial airplanes want a full flight to maximize profit for the airlines company, freighter ships want a full load to maximize the amount of profit coming in versus how much fuel and payroll hours they spend. Making sure that each freighter is at max capacity is a process similar to a real life version of Tetris and is a multi million dollar industry by itself. There are several other common issues that Blockshipping hopes to solve. These are numerous and range from overcapacity and under-capacity, to security problems, environmental regulations and low freight rates for the shipper. This is an industry that has not changed much in the last century and is need of an overhaul. Blockshipping is introducing what they call a Global Shared Container Platform or GSCP. This is a real time registry that tracks every shipping container in the world. The primary goal of this registry is to provide real time data that shows shippers where their containers are at any moment, through the use of smart sensors and data points among the shipping lines. This system will also include smart contract based transactions between international companies that can transact with the carriers, ports, and customs handling. Blockshipping estimates that their global registry can save the shipping industry over 5 billion every year while reducing environmental impact through wasted fuel and co2 emissions. Tracking gold It’s not just shipping and freighter companies that are rushing to adopt blockchain. The individual industries surrounding almost every commodity worldwide have taken notice and are testing out the technology. This includes everything from gold and diamonds, to oil, fruit, handmade goods, wine and more. International trade and everything it envelops will be affected by blockchain. Gold is one of the most historically important and ubiquitous stores of value the world has ever known. It’s unfathomable that there was ever a time that this scarce metal was not important to mankind and it is hard to imagine a world without it. This is another example of a commodity that has supply routes that are hard to follow, as it is sourced through various mines across the world in numerous countries. The conditions surrounding these mines, and its workers are at large completely unknown to the general public and people who purchase it. The supply chain for gold is an estimated 200 billion dollar annual market. London Bullion Market Association The London Bullion Market Association is currently testing ideas submitted by blockchain professionals to determine how the gold supply chains can be reworked. The association intends to track the gold from where it is sourced in mines to the end point of the purchaser. Additionally, the organization hopes to gain a better understanding of how the gold is eventually used, from investments to jewelry, to industrial uses. Having knowledge of the full scale of implementation for gold will allow the LBMA to further serve its customers better. Emergent Technology Holdings The US based technology and finance company, Emergent Technology Holdings, is also attempting to track the supply lines of gold in what they consider a new approach to the concept. Emergent is focused on tracking the source of gold and ensuring that it is environmentally and ethically sourced. Starting from the mining source, the gold will be tracked from where it is harvested all the way to the distributor and to the final customer or destination. They plan to utilize digital sensors placed in tamper proof containers that make gold shipments scannable, ultimately providing a way to reliably follow the gold supply trails. Emergent Technology Holdings has plans to offer their own cryptocurrency tokens as well. They have partnered with the NYSE listed organization called Yanma Gold to create their own “G-coins” which will be backed by grams of gold. Each coin is a digital representation of ownership of physical gold that can be used for trading or investment. They hope to provide new liquidity to the gold market. Kinesis Kinesis is a full monetary ecosystem that plans to provide two cryptocurrencies backed directly by gold and silver. The KAU coin will be backed on a 1:1 basis by a gram of gold and their KAG coin will be backed by silver. Kinesis will use a minting process that replaces mining on other blockchains. This system enables users of the Kinesis platform to directly create their own coins by submitting cash or digital currencies at one of Kinesis’ own digital exchanges. Kinesis is forked from the Stellar platform, which is renowned for its speed and efficiency of transactions. There is numerous aspects to the Kinesis platform including digital wallets, several dedicated exchanges, shares of the fees that go to token holders and referral benefits. The father company of this new cryptocurrency system is the Allocated Bullion Exchange or ABX, a longstanding and reputable figure in the precious metals markets. This company is well established and plans to provide a multitude of features that have been designed with the consumer in mind. Tracking Oil The oil industry is one of immense international importance. It is without question one of the most important commodities to the function of the societies we all live in. Oil and gas have a very extensive and sordid history. Some of the most war torn regions in the world also happen to be some of the biggest exporters of oil in the world. This foreshadows the tragic history regarding international conflicts that have been fought over the control of this natural resource. With this in mind, it's easy to imagine that the supply lines for oil are shadowy and very hard to track. Several groups and professionals in oil and natural gas are considering different ways to utilize blockchain technology to track supply lines. BTL group is a blockchain based company that recently demonstrated a pilot program for several industry heads. The findings of the pilot report that overall costs regarding tracking oil can be reduced by up to 40%. The group plans to track many different commodities using smart contracts. Another company that is focusing on this task is the group Petrobloq. This is a company focusing specifically on the supply lines of oil from regions like the middle east and south america. Petrobloq plans to work directly with refineries and producers to establish a connection that can be adequately tracked. The group claims that they will be able to save suppliers millions in costs related to the shipping process. Petro Venezuela is a country that is heavily reliant on oil as their most important economic driver and exported resource. The economy of Venezuela has absolutely plummeted in the last decade leaving its native currency, the Bolivar, as worthless as the paper it’s printed on. With these desperate conditions mounting, the Venezuelan government has announced they are taking a bold direction with their economy. For the first time in history, a country's’ national currency will be a digital currency. Venezuela will establish a cryptocurrency called the Petro that will be backed by barrels of oil in reserve. This essentially means that the economy will be based solely on the value of oil, a commodity that trades worldwide. While this move has drawn the appropriate skepticism, no one can be sure what is the true motivation regarding this startling announcement and how this will all play out. All things considered, this is a historic moment for oil, cryptocurrency and Venezuela. Conclusion Life changing technology comes in cycles and ushers the world into the next economic era. The industrial revolution was a period of time that saw major transformations in manufacturing processes and brought new prosperity to the world. Centuries from now, it will be apparent that the internet was one of the most important inventions in the history of mankind. Blockchain technology is an expansion on that concept because without the internet, blockchain and the way we share knowledge and connect with others could not be possible. The possibilities that blockchain bring are just now being discovered. Blockchain truly stands to replace or enhance numerous industries around the world. With the addition of decentralized applications, blockchain can be integrated with the internet and existing systems or electronic processes to enable new functionality. Many industries will end up being fully replaced by blockchain while many will just be enhanced and optimized. Its unfathomable how many businesses and industries still rely on notes or paper documents and the use of traditional postal mail services to send these documents. Supply chain management is an obvious industry, but there are many more. Government and bureaucratic services are looking into utilizing blockchain, as are fortune 500 companies. When you tell a CEO that blockchain can potentially save you billions, they tend to listen. The future is certainly a mystery to everyone today, but many successful individuals learn to look ahead at the changing landscape. The internet is not in its finished form today. It is merely a version that will be updated to the next version down the line and blockchain could be the key to the next evolutionary step. Blockchain technology is more than cryptocurrencies, and it will soon be as well known in technology as IP addresses or email protocols.

Zubair Bukhari
Zubair Bukhari

17/12/2018

Merging Gold with Blockchain Technology

Since ancient times, gold has always been something that has had value attributed to it. All writings from civilizations long gone have mentioned gold and its valuable attributes. Throughout history, gold has gone through numerous changes to make it more accessible for investors. The problems with gold are also it’s strengths. Gold is of course, a physical metal. Unlike fiat currencies, gold cannot be simply printed and duplicated whenever the governments of the world decide they would like some more of it. Gold mining, like all mining, is an expensive and time inefficient process. Gold has a finite number when it comes to above ground stores. The problem with gold is, it is in no way an effective currency to use for daily exchanges. To store or move gold is an expensive process. This has led investors to search for an alternative to holding the actual physical gold. Gold ETFs have long been an option for investors. These exchange traded funds have long been an easy way to add gold to your portfolio without having to store the physical metal. There is also gold mining stocks for those that choose to invest like that. However, there is no other methods to use gold as a day to day currency for transactions. With blockchain technology, this will finally become a reality. The Kinesis platform has numerous ties to the gold and precious metals industry. Kinesis is partnered with ABX, the Allocated Bullion Exchange, a leader in the gold and precious metals industry. They have numerous exchanges on in several different countries and are really a global platform for the sale and exchange of gold bullion. Kinesis is doing with blockchain what ABX did with the internet, offering all new and interesting ways to harness the best store of value the world has ever seen, gold. The Origins of Kinesis Kinesis has a distinct and grand vision for their platform that rivals anything else in the crypto world today. There is truly no other platform in the blockchain industry today that comes close to the full fledged financial institution that Kinesis offers. Kinesis is led by Chief Executive Officer Thomas Coughlin. In a recent interview with the financial and investing show “Crush the Street,” Coughlin describes his background in the precious metals industry, and the origins of the Kinesis vision. Coughlin describes the path that led him to Kinesis started in 2008 with the financial crisis. “I was looking for basically a sound investment and safe haven instrument which led me into the precious metals industry and as I went into that industry, I identified so many inefficiencies with the space.” Coughlin’s background in the finance industry comes from his experience as a hedge fund manager. From there, he founded ABX. At the time, ABX was a leader in merging technology and gold in ways that investors have needed for some time. The natural next step to further the merging of gold and technology is to harness the power of blockchain. This is exactly what Kinesis strives to do. In this interview, Coughlin touches on some of the key differences between the Allocated Bullion Exchange and Kinesis. He mentions that it was always in his mind to be able to facilitate peer to peer transactions in a way that was completely decentralized. This was an issue seeing as ABX is a centralized system, which limits the potential. ABX stands in the middle of every transaction, so users don’t have full control over what they do with their funds. With banks for instance, having a man in the middle can cause long backups for your funds. Your accounts can also be locked or held against you. This is simply not feasible for business owners and individuals. Kinesis has a strong vision for their platform that needed to be completely decentralized for the benefit of all users, and to avoid the problems banks cause. Gold and Blockchain Come Together Kinesis is focused on what makes sound money. This principle is what has drove Coughlin for a long time. Fiat currencies all over the world are facing deflationary pressure due to the national banks over printing funds and thus diluting the value. For this reason, Kinesis decided to utilize gold and silver as their backing assets for their cryptocurrencies, KAU and KAG. Both of these cryptocurrencies are backed on a one to one basis, one gram of gold for every KAU and 10 grams of silver for every KAG coin. Kinesis takes gold and silver and essentially puts them on a high speed rail system which is the blockchain. Bringing gold onto the blockchain opens it up to many new possibilities that were not present before. First, transacting with gold becomes an anonymous process. Utilizing the blockchain, anyone can send payments and transact with Kinesis cryptocurrency, completely anonymous. This protects individuals liberties and identity in an age where your information seems too easy to fall into the wrong hands. With traditional banking systems, the method of exchanging account information to send and receive payments has led to numerous identity theft issues. Hackers can also easily get this information just from your online shopping habits. These are security risks that need to change in the future. With Kinesis, gold can become an instant method of payment anywhere in the world. With blockchain integration, it becomes a highly efficient medium of exchange. The world has long moved past gold and instead used fiat currencies essentially backed by nothing, which has led to financial crisis in many different parts of the world. The devaluing of currencies has been going on for decades, further promoting gold and precious metals as the stable alternative. Kinesis brings back stable value for everyday commerce by bringing gold into this new technology sector and integrating it with cryptocurrencies. Eliminating Abstract Value In the interview with Coughlin, a very important point he discusses is the abstract value of not only cryptocurrency, but all fiat currencies in general. He explains that most of the volatility in crypto comes from the fact that no one is quite sure what the true value of these cryptocurrencies are, perhaps it’s even zero. They are valued according to the confidence in them, and the confidence in the development teams. In this sense, cryptocurrencies today are very similar to legacy fiat currencies like the USD or Euro. The belief in fiat currencies backing, and the trust of the government is what keep them going. This is also how countries like the United States ends up with over 20 trillion dollars worth of debt. Kinesis cryptocurrencies eliminate this need for trust, essentially creating a trust-less system, which is what Bitcoin and alternatives were supposed to be. A user does not have to trust in the value of the Kinesis tokens, as each token is verifiably backed by gold and silver. As long as these precious metals hold their value, Kinesis tokens will hold their value. The arrival of stablecoin options in crypto is long overdue. Stablecoins like the Kinesis currencies will allow crypto to be adopted by users and merchants on a grand scale, and finally make crypto an everyday means of payment and exchange like it was intended to. As of now, there is next to no adoption, leaving many wondering what the true purpose of Bitcoin is, and whether it can continue to hold its value into the future without drastic changes to the underlying technology. Kinesis will outperform major crypto currencies by eliminating the abstract value and the volatility. Why Kinesis is Superior to other Cryptocurrencies If you are discussing trust, it is safe to assume more users trust in the value of gold versus the value of experimental technology. This is because gold has a timeless value attached to it. Where the world has gone through numerous technological advances, gold has stayed constant. The industrial revolution is long past, as is our dependence on steam or coal based energy, and yet gold has retained value throughout all of history. So while we watch this experimental technology called cryptocurrency grow, and the faith attached to it, we have to keep in mind that we run the risk of it one day being outdated, redundant technology. Everything in technology is rapidly changing, so there is not telling if there is a better crypto alternative right around the corner. This makes Bitcoin and other cryptocurrencies, very risky propositions. Especially considering we truly have not seen these blockchain systems be tested by mass adoption yet. This again puts Kinesis in quite an advantageous position. While other crypto currencies have no backing of any kind, Kinesis cryptocurrencies are backed by the best store of value in history, gold. This means Kinesis has the potential to effectively outlast all competitors and be the leader in stablecoins. In comparison, Tether, another stablecoin, has had nothing but controversy regarding their platform. Tether is backed by USD, an already rapidly deflating currency. This aside, Tether has numerous controversies regarding their lack of professional and publicly available audits. This has not been comforting for Tether holders. Especially considering Tether is supposed to be pegged to one dollar, but has its own share of volatility, and has failed to hold that dollar peg. Kinesis has verifiable stores of precious metals, and all transactions on the Kinesis blockchain will be publicly open to inspection. Fiat currencies are going through rapid deflation worldwide, with Venezuela bolivars and Turkish lira being prime examples of the catastrophes that can transpire. Any stablecoins backed by fiat currency are subject to deflation over time for this same reason. Kinesis will continue to be a solid alternative to all cryptocurrencies, and will be a leader in real world adoption. The Kinesis network will continue to grow, while other blockchains see less and less use. Kinesis will continue to be the superior cryptocurrency. Understanding Asset-Backed Systems According to Coughlin in this interview, Kinesis cryptocurrencies don’t actually represent tokens that are “backed” by gold in the traditional sense. The Kinesis cryptocurrencies are actually divisible units of gold and silver down to unit sizes that can be used to pay for smaller transactions. The ability of cryptocurrencies to be fully fungible and break down to smaller increments that 1 unit are a great advantage compared to stocks and bars of gold. Furthermore, there cannot be any more coins minted without there being gold in the Kinesis system to back it. This means there is no free flowing coins on the network that dilutes the individual Kinesis coin value. There is a two tier market structure with Kinesis. The first tier is where users mint their own Kinesis coins. They use their fiat currencies to actually mint their own gold and silver backed Kinesis currencies that are then deposited directly into their Kinesis wallet. This allows users to essentially be their own central bank, and have full control over their funds with no middle man. The second tier in the Kinesis system is where these actions are added to the blockchain ledger, for full transparency and immutable records. The Kinesis Business Model The Kinesis system is unlike any other in crypto today. What Kinesis is offering is a full yield and reward based system for all participants in their network. Kinesis is incentivizing the use of their coins for all minters in their system, which will in turn make Kinesis an attractive passive investment compared to things like rental property or stocks. Typical gold investors do not receive any type of yield, but within this new industry Kinesis has established a yield system that will reward users in four different ways. Minter Yield First there is the Minter Yield. When minters create their Kinesis coins, they are forever tied to this person. When the minter uses these in transactions, the coins will then return a 5% based on transaction fees in perpetuity. The blockchain ledger allows us to track the movement of these coins forever. This will allow Kinesis to determine the original minter of these coins and continue to reward them. This is incentive for users to continue to participate in the network by minting new coins and using them, and essentially a new ecosystem is being formed on the Kinesis network. Depositor Yield Kinesis depositors will also receive a 5% share of transaction fees on the first deposit and use of the Kinesis coins from their Kinesis wallet. Holder Yield For those that choose to hold the Kinesis coins instead of using them, Kinesis holders receive a 15% share of all transaction fees. This is calculated every day and the total is sent to their Kinesis wallet every month. Referral Yield This yield is specifically for those who choose to refer users to the Kinesis platform. Referrals will bring even more rewards for the platform users. The Growth Incentive What Kinesis is doing is incentivizing the growth of a stablecoin network. Traditional, there is no rewards or growth involved with stablecoins. With options like Tether or TrueUSD, the only reason to use these currencies are either as a safe haven against Bitcoin’s violent volatility, or as an onramp to major crypto exchanges. Other than that, there is no incentive, and to the opposite point, in the case of Tether and other major stablecoins, you are effectively losing value because Tether has failed multiple times to keep it’s dollar peg. Thus you are bleeding your portfolio just holding it. Kinesis has this yield system in place to create network growth organically. The more people using the network, the more benefits there are for the existing users. With Kinesis backed by gold and silver storages, there is also a better system to ensure that Kinesis will not lose its stable value. This makes it the better stablecoin option, ensuring it will be used on major exchanges more than alternatives. Also pushing Kinesis’ growth is their connections to ABX and other business partners. ABX is not a newcomer by any means. It is actually a well trusted and respected platform with many high level connections. In this interview, Coughlin details a strategic deal in place with a large mobile bank with 150 corporate clients and millions of active users. These partnerships were all born out of the existing operation, ABX. The Kinesis platform is the farthest thing from other crypto startups. Many of them just have a white paper and an idea and are starting from the ground floor. Kinesis is already well established and connected with a large community that is interested in this sound money project. Kinesis Roadmap Things are moving at a rapid pace for Kinesis. Currently in public sale, the KVT tokens are yet another offering for the Kinesis platform. With the connections Kinesis has, and the technology built around it, it can be scaled to a huge user base. The KVT token sale is your chance to take part in the value of the entire network, quite like stocks for businesses. The KVT tokens will grant users a share of the entire fee base for the network. This could potentially be a huge share when the Kinesis platform fully launches. The capital raised through this token sale will go towards building up all the infrastructure and technology that the vast Kinesis platform will need. In early 2019, Kinesis will begin to offer their long awaited gold and silver backed cryptocurrencies, KAG and KAU. This will be the first leap for the Kinesis network. Also planned is the Kinesis debit card. This card will grant the user the ability to utilize their Kinesis holdings for every daily transaction, even where cryptocurrencies are not yet accepted. This is in addition to the Kinesis wallet, which will link directly with the Kinesis debit card. Kinesis will also launch both of their crypto currency exchanges, for both minting new KAG and KAU coins, and for other altcoin transactions. Ultimately, 2019 will be a huge year for Kinesis as it becomes the leader in stablecoins and cryptocurrency technology. While many cryptocurrency platforms have little more than a white paper and empty promises, Kinesis has a full fleshed out vision, and the experience and development team to make it happen. The cryptocurrency market needs a stablecoin leader, and Kinesis will assume this role. What Kinesis offers is a full closed loop monetary system. Every detail and need for the user has been well thought out and considered. This ensures no reliability on services outside the Kinesis platform. While other blockchain companies hire for development of wallets or exchanges, Kinesis is creating all of these products themselves. This is a team with an unblemished record of meeting the needs of their customers. Coughlin first envisioned Kinesis before blockchain technology existed, and with ABX, he was just waiting for the proper time. Blockchain ledger technology has changed the finance industry and made it possible for the Kinesis platform and others to fulfill their missions. With the Kinesis ICO coming up for the KAG and KAU tokens, the future of cryptocurrency is within grasp. Legacy fiat systems will continue to be devalued and citizens of the world will continue adopting alternatives to ensure their financial futures. What they will be gaining with the Kinesis platform is full, unhindered financial freedom. Kinesis is abolishing the middle man, and ensuring that all users have full financial control of their funds, forever. There is no censoring of transactions, or locking accounts like services such as Paypal. The user has their Kinesis wallet, and is able to use their funds whenever they choose. This is a momentous time for financial liberty, and Kinesis is providing the platform that benefits everyone, from merchants to individuals. Gold is being merged with technology in ways that have never before been possible. With this system, gold is truly brought into the future. Investors and everyday people now have access to gold in ways that before were not easy or cheap. While gold has always been a store of value in times of crisis, it will finally return to the use it once had, an everyday means of payment and exchange. Kinesis is providing the platform that will allow users to finally be financially independent.

Zubair Bukhari
Zubair Bukhari

25/10/2018

Stablecoins: The Solution to the Volatility Problem

Cryptocurrencies like Bitcoin have come along with promising features and abilities. Although Bitcoin has shaken the world as a disruptive and game-changing technology, its volatility is a huge problem. One of the initial and most important intentions of Bitcoin was to be used as an everyday payment system. Simply put, it was intended to be a “peer to peer electronic cash system,” as titled in the Bitcoin white paper. So far, Bitcoin and other major cryptocurrencies have not been able to perform this initial important use case well. While there was initially some adoption from merchants, the adoption has been slow and due to technical issues, many merchants have dropped their support for Bitcoin and others. One reason merchants are unwilling to adopt crypto payments is the volatile price. In the current climate, one Bitcoin can be worth anywhere between $5800-$7000. To make up for crypto’s shortcomings, there is another class of cryptocurrencies that aim to solve the volatility issue that is ultimately holding Bitcoin and others back from being the everyday payment system they were designed for. This new breed of cryptocurrencies are appropriately titled “stablecoins.” Stablecoins bring the promise of solid price support that can be used as either a store of value, or an everyday means of exchange. It is for this reason that many are heralding stablecoins as having a far greater potential than Bitcoin. A stablecoin is a cryptocurrency that has stable price characteristics. Most stablecoins are pegged to the U.S. Dollar, while the upcoming Kinesis project will create coins that are backed by gold and silver bullion. The ultimate goal of stablecoins is to be an incredibly stable digital form of fiat-free cash, with the potential to solve the problem of cryptocurrency volatility. This provides traders and investors a safe haven during a market crash that can impact fiat currencies significantly. It also shields them from issues related to fiat currencies. Lack of support Due to strict regulations and banks becoming wary of cryptocurrencies, there are only a few exchanges that support fiat currencies. This makes it difficult to complete transactions using fiat-based cash. Slow transaction times It takes several days to send fiat to and from a bank account. Transfer between the ACH Bank and Coinbase wallet, for example, can take as many as 7 to 10 calendar days. Limited regulations As previously mentioned, regulations are now stricter when it comes to crypto-related transactions. This makes it difficult to purchase or pay for goods using fiat currency. When cryptocurrencies exploded in the mainstream market, their value increased exponentially, resulting in a flood of investment capital to Bitcoin and other cryptocurrencies. After the crypto mania phase, it wasn't long before more than 50% of the price of bitcoin decreased, along with the drop in media interest and its trading volume. This kind of cryptocurrency volatility can cause a large exodus of investors. It will also affect other cryptocurrencies that want to gain mass adoption status. It's hard to argue for the adoption of a currency in business if merchants can't rely on the daily value and fees associated with the currency. At the height of crypto mania in 2017, Bitcoin users were spending as much as 100$ or more for a single Bitcoin transaction due to the back log of transactions on the network. Transactions often took days to complete. This is unacceptable for business adoption. Stablecoins want to address this volatility by providing investors with a stable cryptocurrency. For it to work however, it has to satisfy the requirements of sound money. That is, it must be a store of value (SoV), a medium of exchange (MoE), a unit of account (UoA), and fungible. It must be easily moved and divisible as well. Store of value (SoV) This refers to a form of wealth which current value is maintained even to the future without any depreciation. Examples of solid stores of value are gold, silver, and other precious metals. Medium of exchange (MoE) For stablecoins to be a medium of exchange, it has to facilitate the sale of goods without using barter in the equation. Unit of account (UoA) A cryptocurrency must provide a unit of measurement that will allow its value to be defined and compared. For example, the cost of a car could be 10,000 units of a stablecoin. All cryptocurrencies can be used as a unit of account. The Stablecoin Solution Stablecoins matter because they are relatively stable in value, unlike Bitcoin and Ethereum. This is why it is often considered as a hedge against volatility, insulating you from the market volatility that is associated with cryptocurrencies like Bitcoin or Ethereum. If you trade 1 BTC for a stable coin, for example, its value will be the same even if the price of Bitcoin drops. You can also have stable coins converted back to BTC anytime. This makes stable coins ideal to use to invest in options, derivatives, and prediction markets. It is also a better currency of choice if you place a bet with a long and extended timeframe. Real Functionality How stablecoins work will depend on the type, whether its reserve-backed, algorithmic, or backed by other cryptocurrencies. The first type functions like paper money. Instead of being backed by gold reserves in a central bank, it is backed by one-for-one currency reserves that they are pegged to which in this case, are U.S. Dollars. A good example of this type of stablecoin is Tether (USDT). Even without any public proof, the 2.5 billion USDT coins that are in circulation are backed by dollars. Algorithmic stablecoins on the other hand, are controlled by an algorithm. There is software that controls the supply of the stable token, increasing and decreasing it to maintain its peg. Cryptocurrency-backed stablecoins, as the name suggests, use cryptocurrency as collateral instead of fiat money. Done on a blockchain, it removes third parties from the equation. The problem with this type of stablecoin, however, is that the cryptocurrency introduces a source of volatility that makes a stablecoin less stable than it is supposed to. As a solution, more collateral than a 1:1 basis is introduced into the transaction. For example, for a guaranteed $100 worth of a stablecoin, a larger amount of $150 worth of ether (Ethereum) must be deposited first. Stablecoins are commonly used as a liquidity tool for cryptocurrency exchanges. Many exchanges are wary of anything related to cryptocurrency because of its volatility, but stablecoins offer a solution to the problem. The Different Stablecoin Models Stablecoins are a new class of cryptocurrency that offer steady valuations and price stability. It is designed to retain its purchasing power with little to no impact from inflation. In order to maintain steady valuations, stablecoins are tied to price stable assets like gold or the U.S. dollar. Different methods are used to achieve price stability for different stablecoins. For now, there are three broad categories of stablecoins. But there are other stablecoin proposals at work and may be introduced sometime in the future. Fiat collateralized This type of stable coin uses a particular amount of a standard fiat currency as collateral. To issue crypto-coins, for example, U.S. dollars, gold, or oil can be used as collateral. A central entity is responsible for the collateral and will issue a token representing the money they hold. The ratio of the number of crypto-coins issued is also 1:1 against the fiat currency it is pegged to. This is why fiat collateralized is the most straightforward method of stablecoin creation and operation. Apart from a central entity or custodian that holds the collateral--fiat currency or commodity, this type of stablecoins require operational processes to ensure that valuations of collateral are maintained up to the mark. Processes include frequent audits and valuations. A popular example of a stablecoin using this type of architecture is Tether. On paper, it has a market cap of roughly $2.3 billion and with a daily volume that exceeds $1 billion. The token is hailed as the most stable cryptocurrency but is plagued with controversies from the lack of professional and publicly available audits. There is also TrueUSD, a flagship offering from TrustToken. It is a U.S. dollar-pegged stablecoin. It has a transparency mechanism designed to avoid issues that affected Tether. It currently has a public sale on CoinList. StableUSD, on the other hand, is another type of fiat collateralized stablecoin from Stably. It is backed by USD with every token fully backed and redeemable 1-to-1. It also offers support to multiple blockchains, including Stellar and Ethereum. Similar to TrueUSD, it aims to be verifiably transparent. Third party audits and real-time electronic bank data serve as verification of the cash reserves backing of each stableUSD. Fiat collateralized stablecoins however, have their share of problems. For this type of stablecoin to be successful, users have to trust the central entity that holds the money or collateral. In the case of Tether, trust is not exactly working out well. This is especially true with allegations about insolvency and accusations that this particular stablecoin is being used to drive up price of Bitcoin on exchanges. Crypto-collateralized Stablecoins Crypto-collateralized stablecoins depend on the cryptocurrency value that they use as collateral to maintain a stable target price against certain assets. Unlike fiat-collateralized stablecoins, which are simple but centralized, crypto-collateralized stablecoins are used in a much more decentralized approach, as they are backed by cryptocurrency reserves. In essence, these types of stablecoins work quite similar to their fiat counterparts. The only difference is, the collateral is not considered as assets in the real-world, but rather another cryptocurrency. They are extremely volatile. Thus, they are often over-collateralized (there is a huge rate of capital involved) to account for the price volatility of the underlying crypto collateral. Also, in the crypto-collateralized stablecoins system, a bulk of cryptocurrencies account for the price stability achieved by a particular stablecoin. While using these stablecoins is good for everyday situations, holding long term could be risky. There is still no account that this method has already been rigorously tested in real markets. One crypto-collateralized stablecoin is MakerDAO. Despite its increasing popularity, the implementation of such cryptocurrency has been perceived by users as complex and difficult to understand. Under the system, the user needs to deposit crypto assets into a smart contract, then receives a certain number of stablecoins. As previously implied regarding the use of these stablecoins, the cumulative price of the stablecoins he receives is lesser than the value of the crypto assets he deposited. One more major issue with using crypto-collateralized stablecoins is that if your crypto assets go through significant value depreciation, the loans you have taken out will be automatically liquidated. Non-collateralized stablecoins Unlike crypto-collateralized stablecoins, non-collateralized stablecoins are cryptocurrencies with stable prices and are not backed by collateral. Their implementation involves a system or an algorithm that contracts and expands the coin supply depending on the coin value. Basically, the non-collateralized stablecoin approach is based on the Quantity Theory of Money, which implies that “there is a direct relationship between the quantity of money in an economy and the level of prices of goods and services sold.” This means that the coin supply will depend directly on the prices of the stablecoins. For example, if a coin’s value is above $1.00, the supply would increase. On the other hand, if the value drops to less than $1.00, the supply would decrease. These activities create upward and downward pressure on the coins’ value, as needed. To understand more about this, let us take a look at some popular examples of non-collateralized stablecoins. Basecoin – Launched in October 2017, this stablecoin is backed by some of the biggest names in the industry, such as Metastable Capital and Andreessen Horowitz. A re-brand of Basecoin, called Basis, applies a 3-token system using Basecoin, Base Bonds, and Base Shares to implement a system that is similar to an algorithmic central bank. When the supply decreases, bonds are offered at a subsidized rate to pay for the principal and interest in the future. When the demand increases, the supply would also increase. Thus, new coins will be created.Base Shares – Simply known as “shares” in the cryptocurrency market, these tokens come on a fixed supply at the blockchain. These coins are not pegged to anything, with values stemming from their corresponding dividend policies. When demand for such coins goes up and more coins are created, shareholders would also receive newly-created coins as long as all outstanding bonds are redeemed.Carbon – This stablecoin is built on the Hashgraph platform and is compatible with smart contracts, making it highly feasible for use in financial applications. Specifically, it is considered to be used for the decentralized applications (dApps) landscape and for the Ethereum-based games, where a smart contract compatible stablecoin would be a good catalyst.Saga - Saga is a non-anonymous stable cryptocurrency that is backed by a solid set of advisors, such as JP Morgan Chase chairman Jacob A. Frenkel, (chairman of), Cornell professor and IC3 director Emin Gün Sirer, and PHP developer Zeev Suraski. This stablecoin is quite unique from its counterparts, as it is backed by reserves and uses a variable fractional reserve, which is essentially a reserve of conventional currencies. Its supply depends on the size of the Saga economy.Reserve - Founded by Nevin Freeman, this stablecoin originated as an investment round from Coinbase. How it will be implemented is yet to be seen. Overall, stablecoins are likely to evolve over the years. The market around these coins would become more and more competitive, with gradually rising interest in cryptocurrency. The Issues With Current Stablecoin Leaders What is the most stable cryptocurrency? A better question would be what is the best stable cryptocurrency? Because there are several options. None of them are perfect, however. Stablecoins are gaining popularity over other types of digital currencies because of protection from volatility. With links to real-world assets like U.S. dollars, precious metals like gold and silver, and oil, a stablecoin gives traders mental peace, an option for easily liquidated currencies, and eases up concerns on instability. Like most things, stablecoins have their problems as well. In fact, even the best stablecoins have certain disadvantages. Tether According to its website, Tether USDT is “100% backed by USD” with a conversion rate of $1 per 1 Tether. This offers some stability in a crypto space filled with other volatile currencies. But there are reasons for concerns. Not Decentralized Although it uses blockchain technology, the fact that it is run by humans, who are potentially capable of making mistakes, make Tether less reliable. Many believe that Tether is being issued by the same people that run the Bitfinex exchange, another leading exchange that accepts USDT as collateral for trading. This led to the assumption that the 1:1 ratio is not absolute and there might be some fractional reserve lending that is happening behind the scenes. Shady claims Many fear that Tether Limited does not hold enough U.S. dollars to back the stablecoins that are in circulation. In January alone, there were 850 million new digital tokens that Tether released. While this looks good in the sense that there is more capital flowing into crypto, critics say that the cryptocurrency market might be manipulated. This is because the increasing number of tokens released coincided with the record high prices of crypto. Poses a systemic risk With the trading volume of Tether regularly exceeding its market cap, the investment research firm Weiss Ratings thinks of it as a threat to the ecosystem. This is because Tether is one of the main sources of liquidity. As the Weiss report goes, “What happens if Tether does turn out to be shaky? ... What if this large source of liquidity suddenly evaporates?” True USD This is one of the best ERC20 stablecoins on the crypto market as it is pegged with the U.S. Dollars. This can be likened to the Tether USDT, except that it is fully fiat-collateralized, verified transparently by fiat-collateralized like TrustToken, and is legally protected. The people who manage the token are previous employees of Google, UC Berkeley, and PwC. But TrueUSD might not be as stable as it’s supposed to be. In fact, its price showed some volatility, following the announcement that the token will be listed on Binance. Its price had a sudden rise at an unprecedented 40%. It eventually subsided but it did reach $1.39 per token. This led to fears that the price return will dip below $1. But just like in March when TUSD was listed on Bittrex, traders were advised not to pay more than $1.05 per token to avoid losing money. Are the bots really to blame for the price bump? According to Rafael Cosman, co-founder and CTO of TrustToken, bots that are always listening for announcements of new listings tend to “buy any coin as soon as it is listed on a new exchange” to make more profit. But he is confident that anyone who knows that the token is redeemable for $1.00 will not pay for more as they stand to lose money. People are also anticipating on how the token will fare following an audit of its financial situation. Because the token is backed by U.S. dollars, many are wondering if it has enough to back the stablecoins in circulation. Tether for instance, has failed to present a proper audit test. At this stage, stablecoins can be considered highly experimental. So, expect some highs and lows even from the best stablecoins on the market. Investors however, don’t let these concerns stop them from trading, especially in the short-term. The fact that both Tether and TrueUSD are secured against the U.S. dollars and not subject to the level of speculations that other cryptocurrencies have brings the attention of investors. Just stay aware of what’s going on with these tokens on the market before you trade. Keep an eye out for the sudden bumps and drops and don’t pay more than what you’re supposed to for each token. White standard This stablecoin is currently the only one on the Stellar Blockchain, which is known mostly for its fast transaction times. Launched in August 2018 by The White Company and Fintech with the aim of creating a seamless foreign currency monetary system for users. During the official press release, CEO of The White Company, Elizabeth White, said, “Our goal is to unleash crypto’s real-world potential, and this partnership with Interstellar is the first of many steps in not just bringing the White Standard stablecoins to the masses, while increasing the ease for consumers to purchase Stellar lumens (XLM) with USD, GPB and the Euro.” White standard offers three variants of coins, tied to the US Dollars, UK Pounds or Euros. Once all the kinks are worked out, it is touted as allowing seamless deposits, withdrawals, and transfers in all three currencies. The White Company partners with Interstellar, an integrated decentralized exchange (DEX) platform and cryptocurrency wallet powered by the Stellar protocol. Currently, they offer users access to five major cryptocurrencies: Bitcoin, Stellar Lumens, Litecoin, Ripple, and Ethereum. This partnership will integrate the White Standard stablecoins so that Interstellar will be able to allow users to instantly withdraw, deposit, or transfer through the White Standard stablecoins. It may seem like WS stablecoins are quite similar to Tether. The only difference is that the latter does not offer current audited information. However, the White Standard is backed by the USD for the same reason the USD was backed by gold. Because it’s currently the worldwide medium of exchange it becomes easily traceable into any good or service. While there are concerns about inflationary pressures on USD, they have not yet been realized and are likely far off for now. Anatomy of Kinesis: the Ultimate Stablecoin What makes the Kinesis system an evolutionary step toward a better monetary system is that it acts as a store of value and a medium of exchange both at the same time. The Kinesis currencies will soon be launched in November 2018 and will have two currency systems: KAU and KAG. These will be minted into existence and will represent precious metals, which are the bases for the cryptocurrency 1:1. This means that 1g gold is equivalent to 1 KAU and 10g silver is to 1 KAG. These will be stored and insured in third-party vaults that will be audited twice every year. the Kinesis Standard Amazingly, the Kinesis system is designed to actually work. It’s not just any metal in a vault. The workings of the Kinesis system include: Kinesis Currency Exchange (KCX) – where the coins will be produced.Kinesis Blockchain Network (KBN) – where the coins will be utilized.Kinesis Blockchain Exchange (KBE) – where coins are traded.Kinesis Digital Bank (KDB) – where transactions are held.Kinesis Commercial Centre (KCC) – where various companies are able to offer goods and services. Different users will have the option to choose any form of exchange they want for gold, silver, and other major currencies, like the euro, dollar, pounds, franc, and yen. All of these will be integrated with the rest of the world using conventional channels. These include debit and credit cards on the MasterCard and Visa networks, as well as ATM networks, telegraphic transfers, Western Union, PayPal, MoneyGram, and more. Kinesis Solves the Issues of Other Stablecoins What makes Kinesis unique is that it offers price stability, which isn’t available in other stablecoins. This currency system does this by basing its currencies to physical precious metals, like gold, which has a strong store of value for the longest time. Thanks to the minds behind it, they have gone through the list of everything that could possibly go wrong with every coin and have provided solutions to each one of them. Kinesis also has a rewarding multi-faceted system that is unlike any other. It is also hedge-free because it offers assurance on price stability, as well as trading to a wider variety of assets. This is made possible by having strong partnerships with the world’s leading electronic institutional exchange for physical precious metals, like gold and silver, ABX (Allocated Bullion Exchange), as well as Deutsche Borse Group and European Commodity Clearing. Unlike Tether, wherein its tokens are backed by the US dollar yet are at high risk of fractional bank reserves, Kinesis transactions are conducted through bullion exchange networks. Aside from that, its users are rewarded through its velocity-based system, wherein rewards are based on frequency and rate at which they are carried out. In essence, Kinesis can be considered a trustworthy stabilizing force that drives up velocity further in the cryptocurrency world. In a way, it will offer a more suitable replacement for the highly controversial Tether token. Furthermore, there is a better incentive to trade capital. the Kinesis Launch The Kinesis system has a multi-faceted yield system that is unlike any other. It provides incentives to users’ participation by attaching it to different types of yield. This means that anyone who participates in the Kinesis system receives money for every transaction, as well as for the overall rate of money-changing hands. In other words, the system provides a great reward for using such currencies. This means that this stablecoin addresses an important issue that fiat monetary systems have: the need to inflate prices and devalue the currency to stimulate activity in the monetary system. Enjoyed reading our guide? Check out more crypto related guides!

Zubair Bukhari
Zubair Bukhari

05/10/2018