The world of cryptocurrency has a new variant of stablecoins, the gold backed cryptocurrency. Stablecoins are a form of cryptocurrency which has a link to a reserve asset. For example, currency or gold, oil, etc. The reason it is a stablecoin is that we can find an attachment, to other assets like currency, commodities, and more. This makes it less prone to changes in the price. Hence the name, stablecoins. If you are thinking of investing in crypto, so, you should not miss out on this article on how to calculate crypto profits.
The gold backed cryptocurrency is the newer version or variant of the stablecoins. As the price of stablecoins will not fluctuate, it is a smarter decision to invest in stablecoins or the gold backed cryptocurrency.
The gold backed cryptocurrency is also known as gold stablecoins and is the latest trend in the world of cryptocurrency and its investors. This article will explain what gold backed currency actually is and everything you need to know about it before investing.
- 1 What are Gold Backed Cryptocurrencies?
- 2 How do Gold Backed Cryptocurrencies Work?
- 3 Bitcoin vs. Gold Backed Cryptocurrency
- 4 Gold-Backed Cryptocurrencies
- 5 Should you Invest in Gold Backed Cryptocurrency?
- 6 FAQs
- 7 Conclusion
What are Gold Backed Cryptocurrencies?
Gold backed cryptocurrencies, also known as gold stablecoins, are a digital and upgraded version of the stablecoins. The connection these coins have been to physical gold exists to address the price swings in cryptocurrency. While Bitcoin and stablecoins have assets like real currency (the U.S. dollar), gold backed cryptocurrencies are a commodity, in this case, gold. Learn to create cryptocurrency from here.
Although digital in nature, gold backed cryptocurrency has a physical value and is very popular among crypto investors. Like how the value of Bitcoins is the U.S. dollar, the gold backed cryptocurrency’s value is the same as the value of gold. This value is a link to the price of gold on the market, which doesn’t fluctuate as much as the stock markets (Bitcoins).
How do Gold Backed Cryptocurrencies Work?
These special digital coins or digital gold stablecoins are the same value as gold in the market. And hence, one gold backed cryptocurrency coin is the same unit as one gram of gold. Other coin holders can trade their coins for a gold backed coin, which is usually kept in-store by an independent third-party custodian.
Earlier, unlike Bitcoin and other forms of cryptocurrency whose units are a link to real currency, the value of the gold backed cryptocurrency will never drop below the value of gold. Hence we call it the new variant of stablecoins as well. These gold backed coins provide stability to their investors. The plus point of the gold backed coin is that the value of these coins can go up higher than the actual value of gold as well. If you are looking to buy OSRS gold, check out over here!
Like every other cryptocurrency out in the market, the gold backed cryptocurrency also has its own risks. To determine whether the gold is secure storage is not as easy as it sounds. Unlike the digital coin, which is secure because of the blockchain safeguards, you need to be sure to own the gold completely before investing. You also have to make sure that it is safe in a secure facility.
Bitcoin vs. Gold Backed Cryptocurrency
The most common doubt for people who don’t know a lot about cryptocurrency is whether Bitcoin is a gold backed cryptocurrency. No, Bitcoin is not a gold backed cryptocurrency, but it has become one of the popular ways of buying gold over the past few years.
Bitcoin is completely a digital form of currency and is pegged to real currency, unlike gold backed cryptocurrency that’s pegged to a commodity, gold. Bitcoins became popular in the year 2009, because of which the gold backed cryptocurrency also became popular now even though it started back in 1999. It is because of the popularity of Bitcoins that many other forms of cryptocurrencies have become popular.
Bitcoins now also have an application, the official bitcoin evolution app. It is where traders can earn income in the cryptocurrency market. Know about the best free bitcoin apps by clicking here.
As mentioned earlier, gold backed cryptocurrency began 13 years before Bitcoin, the most popular form of cryptocurrency. The first-ever gold backed currency was in 1996, called E-gold. E-gold, however, saw suspension after several issues with security concerns, lagging transactions, and cybercrime related issues.
There are several popular gold-backed cryptocurrencies. But the most popular ones are the Perth Mint Gold Token (PMGT) and the largest stablecoin Tether (USDT). The largest token in the market currently is the PMGT.
Other gold backed cryptocurrencies or gold coins you need to know about that you could invest in are below:
- Anthem Gold (AGLD)
- Cash Telex (CTLX)
- Cache Tokens
- Digix (DGX)
- Gold Coin (GLC)
- DRCG Coin
- Guardian Gold
- Troy Gold
Should you Invest in Gold Backed Cryptocurrency?
Gold is a stable investment, it is something that our generations have told us. But is it safe to invest in a digital gold coin? Yes, it is safe if you do your research and are completely sure of your decision. As mentioned earlier in this article, there are risk factors in investing in gold backed currencies that you should know about before making your decision.
The gold backed currency has no connection to a single nation or central bank but is a form of trade and exchange that is done across borders, anonymously, and most important of all, on the internet.
If you are planning of making an investment in gold backed cryptocurrency, there are a few questions you need to ask yourself that can help you make your decision. Questions like did you understand cryptocurrencies and what it means to invest in cryptocurrency? Do you know what gold backed cryptocurrency is? Is it worth investing in? How to scalp cryptocurrency? And so on. When you have a clear decision, then you can go ahead and invest in cryptocurrency and gold backed cryptocurrency as well.
What is the difference between cryptocurrency and stablecoins?
Cryptocurrencies are very similar to stablecoins as both are pegged to a real currency, for example, the U.S. dollar. While a single unit of cryptocurrency is equal to one unit of a dollar or any real currency, it is very unstable such as Bitcoin. Stablecoins, on the other hand, are not meant to fluctuate and hence called 'stablecoins'.
What is the best gold backed crypto of 2022?
Paxos Gold (PAXG), Tether Gold (XAUT), Perth mint Gold Token (PMGT), and more are currently the best gold backed crypto in 2023. This list, however, is constantly updating. So better to keep an eye and keep yourself updated so you can make a clear decision on which cryptocurrency to invest in.
Which cryptocurrency to invest in 2023?
The market in gold backed cryptocurrency does fluctuate, even if it is not as big of a fluctuation as that of a currency tied market like Bitcoin. However, there are a few cryptocurrencies that has an expectation of exploding in 2023. They include Solana (SOL), Dogecoin (DOGE), Terra (LUNA), and more.
Investment of any kind needs a lot of research and understanding as it is a big step. In the world of cryptocurrency, the more information you have, the better. This will help you to land some better decisions on what to invest in and what not to. Bitcoin and stablecoins are popular forms of investment in the world of cryptocurrency. However, the new variant of stablecoin, the gold backed cryptocurrency, is gaining more popularity.
Bitcoins units are real currency (U.S dollar) while gold backed currency is a commodity (gold), making it a more stable investment as the value of gold does not fluctuate as much as the value of the currency in the market. This article has a list of everything you need to know about gold backed cryptocurrency, the official Bitcoin evolution app, and more to help you make a decision about investing easily.
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