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- Author of the entry: Mennica Skarbowa
- Date of entry:
A gold-based product sold via blockchain is a new idea from the famous Australian Perth Mint. A few days ago, the company's CEO, Richard Hayes, provided a wealth of information about this project.*
This ambitious project aims to combine the advantages of investing in precious metals with transactions based on the blockchain system. Blockchain is a decentralized database stored on the devices of market participants. This advanced technology enables the secure collection of information in so-called blocks. Each transaction extends the blockchain and forms the basis for authenticating subsequent transactions. This makes users independent of the banking system and gives them quick access to the full history of their contracts.
Although the concept of blockchain is primarily associated with cryptocurrencies, it is a mistake to equate the two. Hayes emphasizes that the recent collapse of bitcoin prices in no way threatens the blockchain system. On the contrary, in his opinion, blockchain technology has the potential to improve the functioning of many industries, including the precious metals market.
The biggest advantage of transactions made in the blockchain system is their transparency. The automatic data collection process is free from external interference, which fits perfectly with the ideas behind investing in gold.
According to Hayes, the boom in cryptocurrencies is driven by growing interest in alternative forms of investment. However, the fundamental problem with cryptocurrencies is that they are not backed by anything. Their unknown origin and high market volatility deter many investors. The solution to this problem is a cryptocurrency that will be backed by physical precious metals. In turn, the convenience and accessibility of online transactions will encourage people who have long planned to invest in gold but still lacked the motivation and time to do so.
Hayes estimates that it will take between 12 and 18 months to introduce a gold-backed currency sold on the blockchain. The head of Perth Mint is convinced that his company's project will be a significant step in this direction for the entire gold market.
