In this digital age, individuals, companies, entrepreneurs are well aware of cryptocurrency ecosystem. A lot of crypto coins and tokens come into market but some are able to mark their place and some just fades away. The regular fluctuations require a more stable medium of exchange and that is stablecoins. Stablecoin is a new form of cryptocurrency which is pegged against some real-world assets such as fiat currency, gold, precious stones, commodity or others. It generally bridges the gap between the stability of the fiat money and volatility of crypto assets.
In this article we will comprehend a detailed guide on gold-backed stablecoins and how they are leveraging the potential of blockchain technology.
Overview of Gold-backed Stablecoins
The theory of gold-backed crypto assets dates back to 1999 when e-gold was launched. E-gold was the digital currency that allowed users to invest in a currency which was backed by gold and precious metals. Similar is the concept of gold-backed stable cointhat represents a specific value of coin which is pegged against gold as a metal.
The value of gold-backed cryptocurrency is directly related to the price of gold. Its value can be enhanced multiple times but can be reduced to the maximum of current gold price valuation. It enjoys benefits of immutability, transparency and privacy as it is backed by blockchain technology. Generally, one gold-backed token equals to one gram of the gold.
Advantages of gold-backed stablecoin
- Stable and reliable: Gold-backed cryptocurrency shows the picture of valuation of gold prices. Thus it makes it more stable and reliable than any other cryptocurrency. As crypto assets such as bitcoin, ethereum are highly volatile in nature.
- Store of value: Before the invention of stablecoins, crypto assets were assumed to be a product for highly influential. As a huge masses of investors and individuals look for a solution to combat inflation and a secured product. Thus, stablecoin are now preferred as a solid store of value for individuals.
- Access to blockchain apps: Gold backed crypto coin development is designed in such a design that they are able to access blockchain applications. Trade and shopping can be done easily through tokenised gold asset.
- Easier to store and sell: Evidently gold backed stablecoins are much easier to store and sell them off as in comparison to physical gold.
Difference between gold-backed stablecoin and other cryptocurrency
These two currencies differ in two main aspects, that is price fluctuation and starting-level costs.
Firstly, crypto coins are highly variable in nature they rise and fall to any level on any given day. On the other hand, stablecoin possess stability. They have in-build stop loss feature signifying that they can fall maximum to the current valuation of backed commodity. Second difference lies in their entry-level market costs. Bitcoin or other crypto currency can be bought through any initial price. However, gold-backed token requires a minimum investment.
How to develop a gold-backed stablecoin
Gold backed stable coin development demands some rigorous steps. You should have a clear head with the attributes and functionality of your coin. Creating of gold backed cryptocurrency requires strong hand on programming knowledge. Let us further explore some basic steps of development process;
- Decide upon the consensus algorithm and mechanism such as PoW or PoS
- Devising of immutable blockchain platform
- Designing of nodes and blockchain properties
- Implement APIs to be executed on the blockchain
- Creating of intuitive user panel
- Align with the legal complexities of crypto business
Technical expertise is a must in developing a gold-backed stablecoin. If you have limited knowledge or wish to hire a third party who can assist you in developing a robust stablecoin, then you must leverage on some real-world experience. Asset backed cryptocurrency development requires some absolute features such as safe and encrypted structure, high liquidity, governance token, energy efficient, transparent system and others.
Antier Solutions is a leading stablecoin development company who provides cutting-edge solution in delivering the complete stablecoin ecosystem. From white paper creation to strategic consulting and stablecoin marketing, we have covered you all.
Schedule a free-obligation call with our experts to kick-off your stablecoin development journey.