Australia is offering more viable proof that institutions are consistently looking to build their tokens atop the Ethereum network. The country’s Perth Mint refinery is now releasing a new gold backed Ethereum token in western Australia.
Ethereum: Still the Blockchain of Choice
Known as the Perth Mint Gold Token (PMGT), it will be the first of its kind issued on a blockchain that’s backed by government’s reserves. A press release explains:
It offers institutional investors a competitive alternative to traditional gold products such as gold ETFs, with the additional benefits of real-time trading and settlement enabled by blockchain technology.
Many are looking to attract institutional players to the digital token world thinking this will somehow legitimize the industry. However, this isn’t necessarily true as we’ve witnessed, and with the introduction of platforms like Bakkt, one is starting to wonder if maybe the idea of crypto and institutional investors working together is something of a myth.
With Bakkt, many touted the platform as a means of bringing legitimacy to the trading space. Many thought it would push bitcoin and crypto further into mainstream territory, but unfortunately, the tool was met with lackluster reception and failed to make any serious impact on the industry. Within 24 hours, less than 75 bitcoin futures contracts were traded on Bakkt, and the results were not good for the bitcoin price. The world’s primary cryptocurrency ultimately dropped to roughly $8,100 from $9,500 within just a few short minutes.
In addition, building anything on the Ethereum network, at this stage, is somewhat questionable, considering the network’s co-founder Vitalik Buterin recently emerged to let people know that the blockchain wasn’t scaling properly.
It appears that Ethereum has played host to too many applications and new crypto products. Ethereum is largely popular amongst blockchain product developers given its smart contracts capabilities, which has ultimately led to too many apps clogging up the network. This has resulted in very high gas prices and slow transaction times.
One of the big concerns regarding Australia’s latest venture is the fact that the token will be bank-issued. This inherently makes it centralized, which goes against all the ideals and notions of cryptocurrency. Designed to alleviate customers from bank-based control, those who use crypto are given a chance to take charge of their own finances, but if the token is being issued by a financial institution, this control ultimately dissipates.
What Could Digitizing Gold Really Do?
Still, Perth Mint CEO Richard Hayes has high hopes for the token and believes it will do wonders for the industry. He comments:
The digitization of gold via a public ledger is a natural progression for the global commodity markets. It will promote gold as a mainstream asset, enhance its accessibility, and offer greater liquidity, transparency and auditability of the real assets backing this type of digital token.
The post Gold-Based Ethereum Token Emerges “Down Under” appeared first on Live Bitcoin News.
Cryptocurrency is a digital currency that uses encryption (cryptography) to regulate the generation of currency and verify the transfer of funds, independently of a central bank. Cryptography is the practice and study of techniques for secure communication in the presence of third party adversaries.
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