May Bitcoin and Blockchain Support Payments with gold reserves?

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Since its inception, technology blockchain bitcoin has wanted to assign different roles, developers hungry for new applications are paving the way to start new adventures, with the idea of improving services for users, not forgetting, transparency, irremovability of data is a challenge that occurs over time.

Therefore, a research report made by Celent has studied the possibility to see if gold use may or may not be feasible, as a medium of exchange through the underlying technology between bitcoin and blockchain, the report named, Micro Gold: Assessing the Use Case of DTL and Physical gold, he determined that blockchain could transform the idea that gold is used as a form of currency and represent the delivery of the benefits associated with bitcoin.

In this sense, according to John Dwyer Senior analyst on securities and investments Celent, informs Euro Money, a coin must have three qualities, reserve value, a medium of exchange, an account unit for the valuation of goods and services. There is something noteworthy, although gold may have been used as a form of currency in the past, in this modern society is no longer used, otherwise, it must be added that today storage cost is too high and has no longer practical sense.

In this sense, Blockchain technology could have the answer, therefore Mr. Dwyer said that placing gold in a ledger Distributed means that this gold property can be divided into small amounts. The example of the assertion, is GoldMoney, a business firm FINTECH, having gold vaults in turn provides a MasterCard, through which payments can be made, these may represent 0.001 grams in value in gold, this property is maintained in a Digital Accounting Book and facilitates movement as micropayments.

There is something that calls attention in Europe’s economy, that banks can collect the higher denominations tickets, Mr. Dwyer spoke about, it means that for the trust money right now have nominal negative interest rates (NNIR), by the banks, this means that it will no longer meet its tenure as value function .

Equally, the following is mentioned, according to Dwyer, Japan is responding to NNIR by allowing its users to increase the number of safe deposit boxes, as a means to provide them keep the money out of financial systems.

Adds something else, it is interesting what the European Central Bank announced in a press release, held on May 4 of this year, 500 EUR tickets notes will cease to circulate in 2018. This strategy certainly makes them storage large amounts of money on tickets, by financial institutions, is very costly and difficult to maintain, however it is unlikely that users turn their attention to the use of gold in the short term.

Interestingly, we  can mentionate Gresham’s Law, when in a commercial society two coins in circulation are legal tender and users believe that one is bad and the other good at the end of the bad drives out good market, the reason is that people prefer to pay bad money and keep good as savings, therefore, digital currencies like bitcoin are longer attractive to people because of their lack of intrinsic value and have a long history as gold, so , it has a high value on trust.

Interestingly and Finally, the owner of Global Advisors, Rus Newton says to EuroMoney “many people will find some easier way to buy considering the idea of gold as a store of value in relation to the bitcoin, taking into account the gold state around exchanges buy/sell long” something else can be added, there are about 7 billion dollars in physical gold and only about 12 billion dollars in digital currencies, it is noted that the digital coins have a long way to go before they can outperform gold as a medium of exchange. According CCN this year, bitcoin trading has the ability to overcome gold trading. New anouncements are expected.

Reference: cryptocoinsnews.com

Disclaimer: InfoCoin is not affiliated with any of the companies mentioned in this article and is not responsible for their products and/or services. This press release is for informational purposes only. Information does not constitute an investment advice or an offer to invest.

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