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IPFS News Link • Gold and Silver

Gold on the Blockchain: How Two Blockchain Startups Are Digitizing Gold Investments

• https://bitcoinmagazine.com

Digitizing traditional securities and physical assets has become a new area of interest for investment-focused fintech startups. Turning physical assets into tradable digital assets creates more liquidity and lowers barriers to entry for private investors in asset classes that are traditionally dominated by institutional investors and high net worth individuals. One of these asset classes is the precious metal gold.

Gold has historically always been a popular store of wealth and is regularly added to investment portfolios for the purpose of diversification. However, it is not easy for private individuals to acquire gold bars and store them in a secure vault. Not only are gold bars usually sold at a premium but there is also a cost associated with storing physical gold.

The investment management industry has, therefore, created several gold-related investment products such as gold ETFs (exchange-traded funds), gold certificates and gold funds. These investment vehicles provide investors with indirect exposure to gold as an asset class.  

To provide easier access to gold and at a lower cost, several fintech startups are leveraging blockchain technology to digitize gold to open the gold market up to private investors. Two of these startups include Vaultoro and the newly launched Orebits Corp.

Vaultoro

London-based Vaultoro allows users to invest in physical gold using bitcoin. The startup, which was founded in 2015 by Philip Scigala and Joshua Scigala, offers a real-time exchange platform that uses bitcoin as the base currency to buy gold. Traders can trade in and out of both gold and bitcoin with other members of the marketplace 24 hours a day without the need of a bank account to conduct payments.

When a user purchases gold on the online platform, the gold is deposited in an insured gold bullion vault in Switzerland. Vaultoro uses encryption, multisignature storage and locked payout addresses to secure its vaults. It also maintains a transparent public audit both of bitcoin and gold holdings while preserving its customers' anonymity.


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