In fact, the idea to create digital currencies based on gold was born in 2017 , right when Bitcoin began to compete with gold in the capital market. Today, there are backed digital currencies that have gained a lot of popularity among people. Therefore, in this article, we want to introduce digital currencies related to gold , how to buy and how they work.
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Cryptocurrency digital currency
Before we talk about the introduction of gold-related digital currencies, we want to know what digital currency is. Today, we hear the word digital currency a lot in different places and social media. This currency has gained a lot of acceptance among the people and on the other hand, it has been criticized a lot. Many people and investors do not trust and accept digital currency due to its volatile nature . If we take a quick look at the progress and history of money ; We can better understand digital currency and make better decisions.
Read more: Digital currency training
Today we need money to meet our needs and today’s world is running on the basis of money. Money has been used in different versions so far and has changed a lot in different periods for easier use, one of the latest changes of which is this digital currency. Digital currency is a special form of digital money based on cryptography. The volatile nature of digital currency means that no entity controls it. Digital currency or cryptocurrency can be sent to another person directly and without problems on the Internet. Digital currency has made a big change in the world economy.
Digital Gold Currency Digital Gold Currency
In general, gold is older than Bitcoin and has been accepted and approved by people for thousands of years. Digital currencies wanted to have both the value of gold and to take advantage of the benefits of being digital, so gold-linked digital currencies were born. The value of digital currency linked to gold is the same as the value of gold in a physical and tangible form and they work somewhat like stable coins . The equivalent of this currency must be secured by a bank or an approved institution.
Unlike other digital currencies, as we said, the value of the gold-related token is linked to the physical asset, which reduces the price fluctuation in this type of currency, which can be considered one of its advantages. Of course, it is safe to say that digital assets in general carry a lot of risks and are deprived of many guarantees of physical assets.
How do gold-backed digital currencies work?
From the point of view of design, cryptographic tokens are similar to stablecoins , and their difference is that instead of being supported by fiat money , they are calculated and equated with the value of physical gold. For example, some tokens are equated at a 1:1 ratio; This means that 1 token is equivalent to 1 gram of gold. Of course, we must keep in mind that gold-related digital currencies are different in terms of support, and some may not consider 1 token equal to 1 gram of gold and use different ratios.
The purpose of this work, as mentioned above; Preventing price fluctuations is due to the same equating currency to a physical asset (gold). Most gold-linked tokens allow investors to redeem them, just like stablecoins, which can be traded for their $1 fiat equivalent as much as they are dollar-denominated.
What happens to digital currency backed gold?
Well, maybe the question has arisen for you, where is the gold that supports digital currency dependent on gold? And how is this process? In theory, the cumulative price of tokens should not be less than the value of physical assets . It means that as much as we buy currency; Gold should be stored physically and not as a derivative, as a backup. To store these backup golds, there are places of gold reserves, which are either kept in banks , or in other government institutions, or in third-party institutions .
Advantages of Gold Backed Tokens
- The ability to store gold without the need to physically store it, with a gold-equivalent token
- Less price volatility in the value of gold
- A simple way to enter the job market and earn high income
- The ability to make transactions at any hour of the day and night without restrictions
- Gold-linked tokens are a stable asset for those looking for stability in their digital portfolio.
- Their main advantage is that they are digital and can be divided into small units, portable, easily transferable and of course affordable for any level of investors.
Of course, you should note that the growth of this currency is slower than other digital currencies. In the rest of the article, we are going to introduce digital currencies related to gold so that you can earn money using these cryptocurrencies in the digital currency market.
Introduction of digital currencies related to gold
1- Tether Gold Tether Gold:
Tether, which has gained a lot of popularity so far and is touted as the most well-known stablecoin, has launched a gold-backed digital currency token. The name of this token is Tethergold, which is represented by the abbreviation XAUT. Tether Gold is ranked 215 in the market. Tethergold’s backed gold is kept in a vault in Switzerland. Tethergold investors have the ability to withdraw their gold and even exchange it for cash. Investors can view the gold weight and purity of their gold token through the serial number of their gold bar on the official Tether website.
At the same time, the Tethergold transfer takes place in the Ethereum and Tron blockchain networks; For this reason, XAUT token can be installed on Ethereum and Tron wallets.
- Minimum purchase: 50 XAUT or 50 fine troy ounces
- Market value: 150.6 million
- Volume: 1.0 million
- Price: $1,758,225
- Total supply: 85417
- Website: gold.tether.to
2- Digix Global digital currency:
DGX digital currency helps those who have little cash but want to invest in physical gold. DGX gold backup reserves are located in Singapore and Canada, and this currency is considered a special and unique feature for this reason, because storing gold resources at a different point greatly reduces the risk of investing in these tokens, as a result, the risk of fraud in this type of currency is less and this backup is fully insured. This currency is ranked 1537 in the market.
The tokens of this digital currency allow anyone to collect gold little by little and manage it 24 hours a day with minimal restrictions. DGX users have the ability to participate in the GOLD ETF, and as you know, tokens can be converted to fiat currency in the digital currency exchange. Up to this part of the article introducing digital currencies related to gold, you have learned about two digital currencies related to gold, but what are the features of digital currency DGX, which is the second cryptocurrency in this list.
- Minimum purchase: $0.50 for tokens, $150 for gold ETFs, and $50 to $600,000 for gold bars.
- Market value: $3,626,137
- Volume: $1,810
- Price: $58.41
- Total supply: 78,000
- Website: DigixGlobal
3- Paxos Gold digital currency:
PAXG digital currency, or Paxos Gold, is a gold-backed digital currency, which is an exciting token for gold enthusiasts, and each token is backed by one ounce of London Good Delivery gold . This currency is ranked 49th in the market. If you invest in this currency, you will be attached to one ounce of 400 ounce London gold bullion. This currency can be redeemed like other digital currencies related to gold. The main company of Pexos is located in New York, and the gold backing of this digital currency token is deposited in the treasury of Brinks Company. Like Tethergold, Pexos Gold can also be exchanged for real gold.
Paxos gold can also be traded as a feature . For this purpose, permanent or quarterly future contracts can be traded in exchanges like FTX with this cryptocurrency. Traders can buy assets at a predetermined price at a specified time in the future. In the continuation of the article introducing digital currencies related to gold, we will tell you the features of this digital currency.
- Minimum purchase: $20 or 0.01 PAXG or ton of gold. For the main gold ETF futures, it is 1 share. Minimum purchase for LBMA gold bullion 400 tons ounce is $800. It varies in other products.
- Market value: $319,973,111
- Volume: $6,449,039
- Price: $1767.58
- Total supply: 180,902
- Website: paxos.com
4- Gold Coin digital currency:
GoldCoin is a peer-to-peer coin that focuses on economic freedom and decentralization at the same time. Its abbreviation is GLC, which is ranked 1421 in the market. This currency has been able to defeat many of its well-known currency competitors with a very high transaction speed. It is backed by a ratio of 1,000 gold coins per ounce of gold, which makes it less volatile than other coin instruments that are not tied to any fixed assets.
In addition to other advantages of being digital, this currency has all the advantages of a digital asset compared to gold or fiat. Like other digital currencies related to gold described above, Goldcoin is capable of converting digital currency into physical gold, and since it is crypto, it can be converted into fiat at any time.
A unique feature of GoldCoin is that the company gives its currency investors a dedicated wallet through which no transaction fees are charged. This feature has made it easy to buy and trade this token, which has helped investors a lot in trading.
- Minimum purchase: No information available.
- Market value: $4.8 million
- Volume: $1,281.82
- Price: $0.115037
- Total supply: 72,245,700
- Website: goldcoinproject.org
5- Perth Mint Gold Token digital currency:
The abbreviated symbol of this currency is PMGT, which is ranked 1194 in the market. An interesting feature of this currency is the official validation of this token in Australia, which guarantees this token through real blocks of this gold. This company presents digital gold certificates to its investors and customers as a proof and guarantee for every purchase. The company has a reputation for easy storage, along with lower insurance fees and premium issues. For this reason, it is more economical compared to its competitors.
- Minimum purchase: Not available.
- Market value: $1,629,655.35
- Volume: $12,110
- Price: $1,901.63
- Total supply: 932
- Website: pmgt.io
6- Meld Gold digital currency:
Another gold-backed digital currency is Meld Gold with the abbreviation MCAU, which is ranked 8084 in the market. This token, like the other tokens we explained above, has the ability to redeem gold . In fact, the token can be converted to any fiat and crypto in the exchange and returned to its gold certificate or physical gold. Also, this token protects investors against extreme inflation. Among the other features of this type of token, we can mention the elimination of investment risk for investors and fast time in conducting transactions. The purpose of creating MCAU was to be a stable alternative to altcoins. Investors can keep their tokens and control their token value through Algorand wallet.
- Minimum purchase: Not available.
- Market value: Not available.
- Volume: $9,500
- Price: $55.68
- Total supply: infinite.
- Website: Meld Gold by Algorand
How to buy and sell gold in the digital currency market
As you know, gold is a well-known metal that has been used by people to save their capital for many years. Different types of gold are different around the world. One of the most common and reliable ways to buy physical gold is to go to reliable exchanges . (Note that if the exchange you are looking for is not sure, you may buy fake gold, in which case you will incur a huge loss)
One of the cost-effective and easy ways to trade gold is through digital currency, which is one of its most important advantages in international buying and selling, which makes you avoid the hassles of documents, liquidity issues, and proof of non-money laundering.
Considering that the digital currency market has its own risks, but if you have the skills and knowledge of this type of market, you can easily make progress and earn good profits in buying, selling and trading tokens.
The first stage of buying and selling gold in the digital currency market
If you enter the Coinmarketcop website and search the word Gold in the Search section, you will see all kinds of gold currencies that are priced based on physical gold.
One of the most reliable and well-known currencies is Tala Pax Gold , the description of this type of currency is given above.
Buy Pax Gold
The easiest way to buy this token, just like physical gold, is to buy from digital currency exchanges .
- In the first step, choose your trusted exchange.
- After choosing an exchange, enter the exchange site and open an account.
- In the next step, you should make a deposit and you should note that this deposit can be done by depositing dollars, rials or other coins supported by this exchange.
- Here you can exchange your funds saved in your wallet for Pax Gold.
Above, we gave explanations regarding the introduction of digital currencies related to gold , and as you know, these types of tokens are good options for those who are interested in investing in digital currency and are looking to buy a safe and low-risk token due to their similarity to stablecoins. These tokens have the advantages of the digital market and will make it easier and more economical for you to work.