A Guide to Gold- Backed Cryptocurrencies
What are Gold- backed cryptocurrencies?
Cryptocurrencies have undoubtedly been the most controversial assets to appear on the trading market. While they do have their unique benefits and use cases, the main issue which investors have with them is that they are not backed by anything physical; only lines of code.
These assets are also prone to extreme fluctuations in price, which also keep the masses at bay from making any investments or adopting cryptocurrencies on a larger scale.
This prompted the creation of a unique category of cryptos called stablecoins, which are backed by tangible assets such as fiat currencies in order to mitigate the issue of price fluctuations. In today’s article, we will be going through a special type of stablecoin, gold-backed cryptocurrencies.
Such cryptocurrency has its value tied to the value of gold, usually, 1 gram being worth 1 unit of that coin. The gold used for backing is stored by a trusted third party and other token holders can trade amongst them. This ensures that the minimum value of the token is kept.
The beauty of this system is that if the popularity and value of the crypto coin goes up, it can also drive up the price of gold. But if the crypto experiences a drop, the real-life value of the gold is not affected in any way.
List of gold-backed cryptocurrencies
More and more gold- backed cryptos have started to appear, the list seeming to grow larger by the day. Below you will find a number of such cryptos which are listed on exchanges:
One AurumCoin is physically backed by 0.75 grams of gold, but its value will always be the equivalent of 1 gram of pure gold. The gold used to back up the coins is insured and kept in top-notch security gold vaults located in different locations including: Zurich, London, New York, Toronto, Singapore, and Hong Kong.
AU is currently being traded at $6.13 USD, having a rank of 1186, with a market cap of $1,828,742 USD.
Exchanges that support AU: CoinExchange, Cryptopia
Darico Ecosystem Coin
Darico is not a pure gold-backed cryptocurrency, being rather more of an investment token which is also backed by Bitcoin and Ethereum. The token is hedged by using 55% Bitcoin, 35% gold, and 10% Ether.
DEC has a price of $0.058703 USD, positioning itself in 472nd place, due to a market cap of $3,025,778 USD.
Exchanges that support DEC: IDEX, Bilaxy.
GoldMint is a blockchain platform that has all its assets completely backed by physical gold or by exchange-traded funds (ETF). Unlike other projects, GoldMint has its proprietary blockchain platform, which employs Graphene technology.
The coin has a current trading price of $0.203432 USD, with a rank of 1276, and is capped at $389,571 USD.
Exchanges that support MNTP: YoBit, IDEX, Bancor Network.
HelloGold enables users to purchase and store gold by converting HGT into Gold Backed Token (Goldx), a backed coin valued at 1 gram of gold. The reserves are held in a joint vault based in Singapore and the World Gold Council recognized that it complies with Shari’ah law.
HGT is priced at $0.002727 USD, having a rank of 1231, being capped at a value of $717,223 USD.
Exchanges that support HGT: Coss, HitBTC.
KBC coins are individually pegged to specific amounts of gold. These tokens can be converted into physical gold in the form of CashGold. In 2019, the value of 100 KBC will amount to 1g of gold.
KBC is being traded at $0.018572 USD, having the rank of 1836th.
Exchanges that support KBC: YObit.net, Coinbe, Hitbtc, Coinsuper.
Pecunio is the name that represents many fractions: an exchange, a crypto fund, and a crypto card. One unit of PCO is worth precisely 1 gram of 999.9 fine gold (which is kept isolated) provided by refineries approved by the LBMA.
The coin is traded at $0.014214 USD and it ranks 2078th.
Exchanges that support PCO: IDEX, LATOKEN.
Puregold is a project which puts forth two digital tokens:
- PGT – which is used for transactions;
- and PGG – the coin backed by physical gold.
The physical gold is used to secure the value of the coins. The company’s reserves cover all the gold-backed PGG tokens which are currently in circulation. PGT is priced at $0.027141 USD, being in 1306th position, with a market cap of $292,801 USD.
Puregold.sg, the main company, owns its very own factory in Singapore which makes gold and bars.
Exchanges that support PGT: COSS.
The Midas Touch Gold
TMTG is a gold-pegged coin developed by the Digital Gold Exchange- an offline/online electronic gold exchange, which uses Ethereum’s blockchain technology. The tokens can only be used as payment means for virtual currencies supported on the DGE platform.
The name of the crypto stems from the Greek mythology, in which everything King Midas touched became gold. The token is currently being traded at $0.005799 USD, with a very low rank of 1803, as no market cap is available.
Exchanges that support TMTG: Bithumb, BitForex, CoinBene, Coinsuper.
The gold used for backing up Xaurum is physically kept as the CommonWealth gold reserves. The project was initially launched on the Blackcoin blockchain which used a proof of stake protocol, after which it migrated to Ethereum.
Xaurum (XAUR) has a current price of $0.038379 USD, being ranked at 438th position, with a market cap of $3,666,522 USD.
Exchanges that supports XAUR: HitBTC, Livecoin, Mercatox.
Where can you buy gold- backed cryptos?
In order to be able to purchase any of the above mentioned gold-backed cryptocurrencies, you will first have to convert fiat currency into other popular cryptos, such as Ethereum or Bitcoin, as there are no platforms that let you buy them directly with fiat.
Most exchanges list gold- backed coins in pairs with Bitcoin or Ethereum, but there are a few exceptions such as The Midas Touch Gold that can be traded against USDT. But such options are very scarce.
If you are interested in purchasing the coins in Initial Coin Offerings, then Ethereum might be the only option available, as most of these projects are issued on the Ethereum blockchain.
With this, we conclude our article about gold-pegged cryptos. Keep in mind that even if a project says their asset is backed by physical gold, that does not make it a 100% solid investment, so proceed with caution like always.