Since the dawn of civilization, gold has always remained a highly valued commodity. Historically, gold was predominantly utilized as a medium of exchange; however, in present day, numerous investors purchase gold for the purposes of asset diversification, as well as to protect against inflation, political instability, and economic uncertainty. Traditional forms of gold investment included physical gold bullion bars and coins, gold exchange traded funds (EFTs), and sovereign gold bonds (SGBs). Yet with advancements in technology, gold investing is changing to one of a digital nature. In this article, we will dive into the world of digital gold.

What Is Digital Gold?

Digital gold refers to a digital asset–typically bolstered by blockchain technology; that is backed by physical gold. This concept combines the benefits of blockchain technology, which enables digital ownership and secure transactions, with the stability and intrinsic value of gold. This utilization of blockchain technology to support digital gold, has transformed gold from merely an investment vehicle into a global currency. Overall, digital gold is a user-friendly and accessible investment alternative for those who wish to utilize their gold as a fundamental utility. This is where companies like Bullionz come into play.

How Does It Work?

With its growing popularity, digital gold providers are on the rise. Most operate their digital gold according to the below structure:

• Tokenization – Digital tokens are used to represent the digital gold bought, sold, and traded. Each token and corresponding certificate symbolizes ownership of a specific quantity of real physical gold that are minted by the issuer of the digital gold. For instance, Bullionz has coined the token BTXG for its operations.
• Blockchain – Ownership and transactions of digital gold tokens are normally recorded on the decentralized and tamper-resistant blockchain. For Bullionz, we employ the use of an ERC-20 Ethereum based token for our operations.
• Allocation – For most issuers, digital gold permits allocated possession, which enables the purchase of a token corresponding to real physical gold. For Bullionz, 1 BTXG token equals 1 gram of real gold.
• Redeem – Due to the aforementioned allocation, tokens can be exchanged for physical gold, which guarantees that the digital gold remains intrinsically linked to real gold. Bullionz offers users all this, along with the ability to convert BTXG tokens to traditional FIAT currencies and vice versa.
• Reserves – All physical gold is kept in a depository by the issuer  of the digital gold which is then utilized to support the digital tokens and issue out physical redemptions of gold. Bullionz’s physical gold reserves are securely stored in numerous global vaults, where we allow users to store their gold holdings as well.
• Security – Due to the decentralized and tamper resistance of blockchain technology, digital gold is readily associated with the immutability and transparency of the blockchain. Despite these safeguards, however, it is also crucial that digital gold providers also undergo physical metal auditing. Bullionz ensures that all its holds both on digital and physical levels abide by the most stringent of regulations, laws, and policies.

Advantages Of Investing In Digital Gold

Due to how it works, digital gold avoids the typical hassles associated with physical ownership, such as storage and the purity levels of real gold. Hence, many are turning to this relatively new means of investing in gold. Below we will list some reasons why many are choosing to invest in digital gold ownership through allocated providers.

• Safe Haven – No matter the form it comes in, gold has always maintained its purchasing power since it can only be minted. Bullionz intrinsically understands the security many feel behind gold and offer users a seamless way to benefit from it.
• Tangible Value – Since each digital gold token is tied to physical gold, they avoid one of crypto's biggest drawback–a lack of intrinsic value, which makes them vulnerable to price volatility. Bullionz tokens are stable coins fluctuating in accordance with gold market value.
• Investment Limits – Most digital gold investments do not have minimum amounts. With Bullionz you are free to invest any amount with little to no limits.
• Ease of Exchange – Unlike other types of investments, investing in digital gold offers exchange flexibility to numerous options. Bullionz provides the ability to swap your BTXG gold tokens for fiat currency or redeem it for physical gold.
• Garner Rewards – Since this form of investing does not generate traditional interest, many digital gold providers are instead offering various returns to loyal investors. Bullionz users can generate a monthly, debt-free, usage-based yield on their gold investments, based on the total collective input of all users.

With soaring inflation and precipitous depreciation of specific fiat currencies, digitalized gold is a turning point for investors by connecting them to fully allocated physical gold bullion. It enhances the gold investment proposition beyond paper market trading by integrating the physical asset's ownership with liquidity and low-cost trading appeals. Overall, access to gold investing, in the form of digital gold, is now significantly more streamlined and effective for those wishing to profit from the metal via bespoke and user-friendly platforms like Bullionz.

This publication is for informative purposes only.
Bullionz’s products and services are region specific. Our Wallet and Card facilities, along with our Transaction Yielding program, will
be available in the EU only.
This article and Bullionz do not intend to solicit, provide, advocate for, nor offer any security, commodity, derivative, investment
management, advisory service, trading advice, nor general or specialized investing, tax, and/or legal advice. Any and all opinions
expressed in this article do not necessarily reflect the official policy or position of Bullionz.