{"id":66,"date":"2023-07-17T08:52:00","date_gmt":"2023-07-17T08:52:00","guid":{"rendered":"https:\/\/kinesis.money\/uncategorized\/merging-gold-with-blockchain-technology\/"},"modified":"2023-07-19T15:15:10","modified_gmt":"2023-07-19T15:15:10","slug":"merging-gold-and-blockchain","status":"publish","type":"post","link":"https:\/\/kinesis.money\/de\/blog\/merging-gold-and-blockchain\/","title":{"rendered":"Gold in Technology: Merging Metals with Blockchain"},"content":{"rendered":"\n

Gold has held its value since ancient times. Many writings from historical civilizations have mentioned gold and its valuable attributes. But what about the value of gold<\/a> in technology today?\u00a0<\/p>\n\n\n\n

Why Does Gold Hold Its Value?<\/strong><\/h2>\n\n\n\n

Before looking at how gold and technology are combined in today\u2019s financial market, it\u2019s important to have an understanding of why the metal itself is considered so valuable.<\/p>\n\n\n\n

It\u2019s a physical asset<\/strong><\/h3>\n\n\n\n

Gold is, of course, a physical metal. Unlike fiat currencies<\/a>, gold cannot be simply printed and duplicated whenever governments decide they want more of it.\u00a0<\/p>\n\n\n\n

This means physical metals aren\u2019t subject to government manipulation or inflation. So, they can provide investors with security and stability.<\/p>\n\n\n\n

It drives industry<\/strong><\/h3>\n\n\n\n

Gold mining, like all mining, is an expensive and time-inefficient process. That said, gold mining also creates value for the local communities<\/a> where the industry is present. This includes increased employment and tax revenues alongside improved infrastructure and access to healthcare and education.<\/p>\n\n\n\n

It has stability<\/strong><\/h3>\n\n\n\n

Physical metals, by the fact that they\u2019re a tangible, finite asset help to hedge against inflation risks<\/a>. This means gold retains its value during economic upheaval and is easy to sell when needed.<\/p>\n\n\n\n

However, gold is not an effective currency to use for daily exchanges. Storing or moving gold is an expensive process. This has led investors to look for alternatives to holding actual physical gold.<\/p>\n\n\n\n

It\u2019s (now) more accessible<\/strong><\/h3>\n\n\n\n

Since the advent of gold technology, investing in the precious metal has become more accessible. For example, Gold Exchange Traded Funds<\/a> (EFTs) have long been an option for investors.\u00a0Although, despite being an easier way to gold to your portfolio, they do not come without their risks and considerations. First and foremost, the fact the investors do not necessarily own the underlying physical asset and therefore, cannot redeem them in the case that they ever wished to. <\/p>\n\n\n\n

Until the arrival of blockchain technology, there were no other methods of using gold as a day-to-day currency for transactions.\u00a0<\/p>\n\n\n\n

Bringing Gold Onto the Blockchain<\/strong><\/h3>\n\n\n\n

Fortunately, gold is now being brought onto the blockchain. By backing digital currencies with gold, Kinesis presents investors with a much less volatile investment opportunity.<\/p>\n\n\n\n

Gold-backed crypto offers a strong advantage over fiat-backed crypto: stability and security. This is because gold\u2019s value stays stable over time. Therefore, the value of gold-backed crypto cannot fall below the value of gold. By extension, gold-backed crypto makes for stable investment opportunities.<\/p>\n\n\n\n

Volatility in cryptocurrencies<\/strong><\/h3>\n\n\n\n

Meanwhile, Fiat currencies are going through rapid deflation worldwide, with Venezuela bolivars and Turkish lira being prime examples of the catastrophes that can transpire. <\/p>\n\n\n\n

In 2022, Venezuela\u2019s national currency lost 31.2% of its value in 30 days<\/a>. Meanwhile, the Turkish lira has declined by over 80% over the past five years<\/a>. Any stablecoins backed by fiat currency are subject to deflation over time for this same reason.<\/p>\n\n\n\n

By extension, cryptocurrency stablecoins have also experienced rapid deflation. Take Tether as an example. <\/p>\n\n\n\n

Tether is backed by USD, a waning currency that has continued to decline in late 2022 and early 2023<\/a>. This aside, Tether has numerous controversies regarding their lack of professional and publicly available audits.\u00a0<\/p>\n\n\n\n

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. <\/p>\n\n\n\n

Deflating fiat currencies aside, lack of knowledge around the value of cryptocurrencies is also affecting its volatility. Many people don\u2019t understand the true value of these cryptocurrencies, perhaps even believing this value to be zero. Cryptocurrencies are valued according to the confidence that investors and development teams have in them. <\/p>\n\n\n\n

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.<\/p>\n\n\n\n

Gold blockchain opens up new possibilities<\/strong><\/h3>\n\n\n\n

Gold blockchain opens up many new possibilities that were not present before. Benefits of transacting with gold technology include:<\/p>\n\n\n\n