Blockchain.com has announced that it will be partnering with with a firm called CoinShares to launch a gold-backed token on the Bitcoin network.
The DGLD token will run as a sidechain relying on Bitcoin’s massive security. That sidechain will be built on Ocean by CommerceBlock, a blockchain company.
Blockchain’s part in this gold digitization project comes after a recent blog by the company on October 8th, in which they pointed out that Bitcoin is “harder” than gold in many respects, when it comes to asset classes.
Now cryptocurrency enthusiasts can have both digital gold in BTC as well as digital gold secured by Bitcoin. It’s a win-win, although it’s far from a new idea.
Digital Gold Veteran Blockchain.com to Host Digital Gold Certificates
Several efforts have launched over the years, securing gold in a vault and issuing it via blockchain technology. Ultimately, the cost and inconvenience of actually moving the gold is what gives the service such great value: you can make use of the fiat or crypto value of your gold without having to physically sell it.
To date, all of these services supply the gold themselves. That is, customers aren’t allowed to send in their own gold.
Eventually, a masterchain of precious metals intended for trading will have to emerge, which encompasses the existing gold and otherwise-based tokens (see the recent palladium-backed token) as well as the metals that aren’t in those vaults.
A network of pawn shops could be brought online, for example, and give a precious metals network real liquidity.
Beyond Coins: Business On Blockchain
While recent events have certainly given credence to the claim that blockchain goes far beyond finance, the transfer of assets like gold, silver, and other precious metals, as well as things like real estate, is a primary function of something that’s decentralized and immutable.
If society relied on technology which at least mirrored the functionality of the blockchain, there’d never be a dispute in contractual payments. Payments would be recorded on a decentralized ledger, readable by anyone.
It would encourage honesty, as it would become much more difficult to lie than it perhaps is today.
CoinShares CEO Danny Masters said in a statement:
“You can now have the peace of mind of Swiss vaulted physical gold, with the same convenience, but not the same layers of middlemen, as owning a gold ETF.”
Blockchain.com has an exchange called The PIT, and this will reportedly make the DGLD gold token available in over 200 countries. Just last week, the company announced another partnership with Blockstack.