25th October 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.
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.
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.
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.
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.
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.