The Bitcoin blockchain is being used as the foundation for digital ownership over actual gold. The DGLD network is running on a sidechain of the Bitcoin blockchain. Each DGLD token is backed by one-tenth of troy ounce of gold, hidden in a Swiss vault. CoinShares announced that the network already has a market cap of 20 million dollars in digitized gold.
Thanks to blockchain technology it's easy to identify which person has ownership over which piece of gold. Digital assets manager CoinShares, wallet service provider Blockchain, and Swiss gold dealer MKS have developed the blockchain project. It took them 2 years to create the blockchain.
When MKS places gold in a vault, they validate it, and mint new tokens. After DGLD is ready for trading. It's a simple approach that makes gold trading 'digitally usable and physically redeemable'.
Digital gold on crypto exchanges
The DGLD token will be first available on The PIT, an exchange launched by Blockchain.com. It's the first time that gold can be directly traded on an exchange for bitcoin or other cryptocurrencies.
Not the first gold blockchain
Several Turkish banks are collaborating on a blockchain-powered trading platform for physical gold. The Istanbul Stock Exchange stores the gold, while investors use the blockchain to trade. People will get access to a digital wallet, which they can eventually use to trade tokenized gold.
Blockchain technology also allows foreign investors to get ownership over gold in Turkish vaults. Transactions are traceable on the blockchain, while the owner’s names remain private. Each bank involved in the trading on the BiGA platform serves as a node in the blockchain. A first version launches this December.
Gold is timeless
Where bitcoin is the new rising star for investors, gold has been a good investment for centuries. For example, Turkish citizens favor the timeless investment strategy of buying gold. All over the country shops are selling pieces of gold that people hide in their bedrooms. Turks are the third-largest purchasers of gold, after the Chinese and Indians.
Posted from my blog: https://www.nederob.nl/2019/10/16/bitcoin-gold-blockchain-launched-in-europe/