Gold Backed Crypto Explained

A digital currency whose value is based on a reserve of gold is referred to as a “gold-backed crypto”. This means that the value of each token is directly related to how much physical gold is sitting in a vault somewhere.

Gold backed crypto is typically a type of stablecoin. The price of the cryptocurrency is not as volatile as that of Bitcoin and Ethereum because it is linked to the value of gold.

The cost of these digital assets is determined by the principles of supply and demand, which can be impacted by news and investors’ attitudes. The price of gold can fluctuate, which would in turn affect the value of cryptocurrencies that are backed by gold. However, gold’s value usually doesn’t change very much or very quickly, and it isn’t usually related to how much prices change in the crypto market.

How Does Gold Backed Crypto Work?

Advertisement Cryptos that are backed by gold offer investors a way to exchange their crypto tokens for physical gold. Each token is backed by an specific amount of gold, such as 1 gram of gold per token. While most people investing in cryptocurrency don’t actually want to take possession of gold bullion, the guarantee that they could exchange it for physical gold if they wanted to increases investors’ confidence in a gold-backed cryptocurrency.

Some types of cryptocurrency are pegged to a value, like $1 per token. This allows investors to more easily determine the value of their gold holdings without needing to account for changes in the price of gold. As the price of gold fluctuates, the cryptocurrency reserve must adjust its gold holdings to ensure that the value of its tokens remains equivalent to the dollar.

It’s important to note that many of thesegold-backed cryptocurrencies charge storage fees because they requirevaults of physical gold. When choosing which gold backed cryptocurrencies to buy, investors should take storage fees into account.

Investors should remember that cryptocurrencies that are backed by gold are not regulated by government authorities. There is no guarantee that a cryptocurrency that says it is backed by gold actually has all of the gold reserves it claims to have.

Many crypto tokens that are backed by gold are audited by a third party to show investors that the token is truly backed by gold.

Is Gold Backed Crypto a Good Investment?

For example, if you don’t trust crypto exchanges or you’re worried about cryptocurrency confiscation, then gold-backed crypto can be a viable solution Crypto backed by gold can have several benefits. For example, if you don’t trust crypto exchanges or are worried about cryptocurrency confiscation, gold-backed crypto can be a good solution.

An ETF offers investors a way to get exposure to the price of gold without actually owning any physical gold or being experienced in trading commodities. If the investor decides to exchange the crypto token for gold, they will receive 1 ounce of gold in return. If the price of gold increases, the same will happen with their crypto token.

For many investors, gold is a way to protect their investment from inflation. As the stock market and US dollar lose value, the price of gold typically rises because investors worldwide see it as a safe-haven asset. In other words, gold-backed cryptocurrency can be used to protect against inflation.

A cryptocurrency that is backed by gold could potentially be used as a reserve currency within crypto markets. When the crypto market is booming investors may want to trade Bitcoin, Ethereum, or other top altcoins. When the market falls back, they can invest in cryptocurrencies that are backed by gold to help them through the tough time.

The price of gold isn’t usually affected by activity in the crypto market because the crypto market is much smaller than other global markets. This means that even if the overall market value of all cryptocurrencies falls, the price of a gold-backed cryptocurrency would not be affected. If you want to trade your altcoins for gold-backed cryptocurrencies, you can do so with low fees. This way, you’ll be prepared to reinvest in other cryptocurrencies when the market stabilizes.

The Top Gold Backed Cryptos

There are several gold-backed cryptos for investors to choose from, with different ways that the tokens are related to the gold market. We’ll explore the top 7 gold-backed cryptocurrencies for 2022 in more detail.

1. Paxos Gold (PAXG) – Overall Best Gold Backed Crypto in 2022

Paxos Gold is a cryptocurrency that is backed by gold. Each PAXG token is equal to 1 troy ounce of gold. This cryptocurrency is called Paxos (PAX), and is regulated as a financial custodian by the New York State Department of Financial Services.

The PAXG token is nearly $600 million in market capitalization, making it one of the largest gold-backed cryptocurrencies. The gold that is backing this token is being stored in Brink’s vaults, which have been approved by the London Bullion Market Association (LBMA). Investors who have PAXG tokens can exchange them for LBMA gold bullion bars at any time.

Trade it for other ERC20 tokens, use it to book hotels on TravelbyBit, or buy gold from Paxos Paxos’ PAXG token can be traded or spent like any other ERC20 token. You can trade it for other ERC20 tokens, use it to book hotels on TravelbyBit, or buy gold from Paxos. The coin can be bought on many major crypto exchanges and has a very low Ethereum transaction fee of only 0.02%. There is no cost to hold PAXG, but if you want to redeem your coins for gold, there is a variable fee of 0.03-1.00%.

2. Gold Coin (GLC) – Fastest Transaction Speeds among Gold Backed Tokens

Gold Coin is an ERC20 token that has some of the fastest transaction speeds of any gold backed crypto. GLC can be bought and sold by investors and the transactions will be confirmed in no more than 2 minutes. The coin’s quickness is helpful to investors who want to trade money rapidly.

The Gold Coin also doesn’t have any transaction fees or storage fees. GLC can be created using a proof-of-work algorithm, which gives rewards to miners who help keep the network running.

One GLC token is equivalent to 1/1,000th of an ounce of gold. The GoldCoin cryptocurrency (GLC) can be redeemed by its holder for an equivalent amount of physical gold at any time. Furthermore, all of the GLCs in existence are backed by corresponding reserves of physical gold, and these holdings are subject to regular audits in order to maintain investor confidence.

3. Anthem Gold (AGLD) – One Gram of Gold for Every Crypto Token

Anthem Gold is a trusted crypto backed by gold. Every AGLD token can be redeemed for 1 gram of physical gold, Bitcoin, or Ethereum. The reserves of Anthem Gold are regularly checked and approved by Hosho Smart Contract Security, who store the reserves in a safe in the US.

With Anthem Gold, you can view a live security camera in the company vault. If you’re an investor who would like to see gold for yourself, you can do so by accessing the live stream.

The Anthem Gold affiliate program enables investors to earn free AGLD tokens. If an investor signs up one more person, they will receive 0.1 AGLD, which is worth $6 in gold at current prices.

4. DigixGlobal (DGX) – Gold Backed Crypto with Multiple Vaults

DigixGlobal is one of only a handful of gold backed crypto providers that stores its gold reserves in multiple vaults in order to ensure the safety of their assets. The company has a vault in Singapore and another in Canada. Both vaults are approved by the LBMA.

Having two vaults provides an additional level of security. Even though it is highly unlikely, a catastrophe striking two vaults located thousands of miles apart at the same time is nearly impossible.

The DGX token by DigixGlobal is equivalent to 1 gram of gold. Tokens can be redeemed for physical gold at any time. The fee for this is 1%. DGX is a digital token that is built on the Ethereum blockchain. It is available for purchase on most major cryptocurrency exchanges.

5. Tether Gold (XAUT) – Gold Backed Crypto from the Leading Stablecoin Developer

Gold-backed cryptocurrency Tether Gold (XAUT) from Tether, the company behind the world’s largest stablecoin USDT. With a market cap of more than $430 million, Tether Gold is one of the largest gold-backed cryptocurrencies after Pax Gold.

Each XAUT token is equal to 1 ounce of a gold bullion bar from London that meets the requirements for delivery. When an investor buys XAUT, their holding is associated with a specific bar on the blockchain, rather than with the reserve in general. This is interesting because it allows the investor to keep track of their investment more easily. This makes Tether Gold more accountable and ensures that it is fully backed by bullion.

If an investor wants to exchange their XAUT for gold, they can place an order with the company and have the bullion delivered to them in Switzerland. An investor can either keep their gold with Tether Gold, or they can sell it for cash and Tether Gold will deliver the cash to them. Tether Gold does not charge a fee for storage, but a 0.25% fee is charged for every XAUT purchase.

6. AurusGOLD (AWG) – Gold Backed Cryptocurrency Minted by Gold Miners

Aurus offers tokens that are backed by a variety of precious metals. The AurusGOLD token, AWG, can be bought with gold, silver, or platinum. You can easily swap Aurus tokens with very low fees.

Each AWG token is backed by 1 gram of gold. The gold is kept in vaults in different cities around the world, such as Zurich, London, Montreal, Istanbul, and Singapore. Aurus buys gold from miners and refineries that are accredited by the LBMA.

Aurus’ DeFi staking platform is one of a kind. The Aurus token (AWX) can be purchased by investors and rewards in Aurus Gold (AWG) can be earned. This means that investors can earn gold by staking crypto.

7. Meld Gold (MCAU) – Gold Backed Crypto Partnered with Algorand

Meld Gold is a cryptocurrency that is backed by gold. It uses the mechanisms of an algorithmic stablecoin to help keep the value of the gold stable. The platform mints and burns tokens automatically in response to the available gold supply in Meld Gold’s vaults. The MCAU token is backed by gold at a 1:1 ratio.

Although Meld Gold is backed by gold, it can be more difficult to buy, sell, and store than other gold-backed cryptos. The reason for this is that it is not an ERC20 token and can only be stored in an Algorand crypto wallet. This crypto wallet isn’t the best we’ve seen, but it is secure and works with Ledger Nano X.

Meld Gold is available on many major crypto exchanges. The coin can be exchanged for physical gold at any time.

If you’re interested in making money off of gold without actually buying any, you might want to look into trading gold on an exchange platform. Many of these platforms offer CFD trading, which allows you to profit from price movements without owning the gold itself.

Important Cryptocurrencies Other Than Bitcoin

1. Ethereum (ETH)

Ethereum is a decentralized software platform that enables you to create smart contracts and decentralized applications without any fraud, downtime, or interference from a third party. The goal of Ethereum is to create a decentralized suite of financial products that anyone in the world can freely access, regardless of nationality, ethnicity, or faith. This makes the implications for those in some countries more compelling because those without state infrastructure and state identifications can get access to bank accounts, loans, insurance, or a variety of other financial products.

apps that run on the Ethereum network are powered by ether, its cryptocurrency. The Ethereum cryptocurrency, “ether” (ETH), can be used to purchase other digital currencies, or to run applications inside Ethereum. Ether is sought mostly by developers looking to develop applications inside Ethereum, or by investors looking to make purchases of other digital currencies.

2. Tether (USDT)

Stablecoins are a type of cryptocurrency that aim to have their market value pegged to a currency or other external reference point in order to reduce volatility. Tether (USDT) was one of the first and most popular stablecoins. Tether and other stablecoins aim to attract users who may be put off by the drastic price fluctuations of digital currencies, like Bitcoin. These coins attempt to smooth out price movements to appear more stable. The price of Tether is linked to the price of the U.S. dollar. The system makes it easier for users to transfer cryptocurrencies to US dollars in a timely manner than if they were to convert to normal currency.

7 Tether is a company that allows people to use fiat currencies on a blockchain network to make digital transactions. This cryptocurrency makes it easier to use digital currencies while minimizing the volatility and complexity often associated with them.

As of September 18th, 2022, Tether will be the third largest cryptocurrency by market capitalization, with a market cap of $67.9 billion and a per token value of $1.00.

3. USD Coin (USDC)

8 USD Coin is a stablecoin that pegs its price to the U.S. dollar by holding an amount of fiat currency in reserve that is equal to the amount of USD Coin in circulation. The Centre Consortium, which consists of Circle and Coinbase, launched USD Coin in 2018. Circle is a regulated stablecoin because it is based in the U.S.

As of September 18th, 2022, USD Coin will have a market capitalization of $55.5 billion, and each coin will be worth $1.00. It ranked fourth in market cap and trading volume.10

4. Binance Coin (BNB)

Binance Coin is a cryptocurrency that can be used to pay for fees associated with trading on the Binance Exchange. The token can be used as a means of payment for the exchange and will result in a discount.

Binance Coin is the native currency of the Binance Chain blockchain platform. The Binance Chain is a decentralized exchange (DEX) that allows for the trading of digital assets and cryptocurrencies. The Binance Exchange was founded by Changpeng Zhao and is one of the most widely used cryptocurrency exchanges in the world based on trading volumes.

Binance Coin was initially an ERC-20 token that operated on the Ethereum blockchain. It has since been migrated to its own blockchain, Binance Chain. It eventually had its own mainnet launch. The network uses a PoS consensus model. As of September 18th, 2022, Binance Coin will have a market capitalization of 44.1 billion dollars. One BNB will be valued at 273.34 dollars.

5. Binance USD (BUSD)

Binance USD is a stablecoin that is pegged to the U.S. dollar and was created by the cryptocurrency exchange Binance. The stablecoin was approved by the New York State Department of Financial Services and is therefore regulated.

As of September 18th, 2022, the market value of BUSD was estimated at 20.5 billion dollars, with each coin being sold at 1 dollar.

6. XRP

XRP is the native token of the XRP Ledger, a payment system created by Ripple in 2012. The XRP Ledger uses a consensus mechanism called the XRP Ledger Consensus Protocol, which doesn’t use proof-of-work or proof-of-stake for consensus. Instead, this system uses a unique method for consensus and validation. Client applications send transactions to the ledger servers, which signs and sends the transaction. The servers checks the transactions and sees if they can be entered into the ledger.

The servers send the transaction candidates to validators, who make sure that the servers got the transactions right and record the ledger version.

On September 18th, 2022, XRP will have a market cap of $19.6 billion and will be trading around $0.39.

7. Cardano (ADA)

Ouroboros is a proof-of-stake algorithm that is used by the Cardano cryptocurrency. This algorithm is designed to allow cryptocurrencies to be secure and scalable. Charles Hoskinson, one of the five people who originally founded Ethereum, is one of the co-founders of this project. He left Ethereum because he disagreed with the direction it was going, and later helped create Cardano.

The team that created Cardano did so through a lot of trial and error, as well as research that was looked over by experts. The team of researchers working on the Cardano project have published over 120 papers on blockchain technology, covering a variety of topics.

Cardano is different from other PoS peers and cryptocurrencies because of its rigorous process. Cardano is sometimes called an “Ethereum killer” because it is said that its blockchain can do more. That said, Cardano is still in its early stages. Ethereum may have beat out Cardano in terms of moving to a proof-of-stake consensus model, but Cardano still has a lot of work to do in terms of decentralized finance applications.

8. Solana (SOL)

Solana is a blockchain platform that was founded in 2017. It is designed to support decentralized applications (dApps). Solana is a blockchain platform that can process more transactions per second than Ethereum. It is sometimes referred to as an ‘Ethereum killer.’ Additionally, it charges lower transaction fees than Ethereum.

Both Solana and Ethereum can utilize smart contracts to run cutting edge applications, including decentralized finance (DeFi) and non-fungible tokens (NFTs). However, the two have some fundamental differences.

Ethereum’s proof-of-work blockchain requires miners to solve complex puzzles in order to validate transactions. This makes the technology more energy-intensive and therefore more damaging to the environment. Solana uses a different system called proof of stake (PoS) which is supposed to be less damaging than proof of work (PoW).

The native cryptocurrency of the Solana blockchain is called Solana (SOL). Since its inception, its price has risen tremendously. Solana had a value of $32.46 on Sep. 18, 2022, making it the ninth-largest cryptocurrency by market value.

9. Dogecoin (DOGE)

Dogecoin (DOGE), which some people see as the original “memecoin,” became very popular in 2021 as its price went up a lot. Some major companies accept the coin, which uses an image of the Shiba Inu as its avatar, as a form of payment.

It was created by two software engineers in 2013. According to reports, Markus and Palmer created the coin as a joke, commenting on the wild speculation of the cryptocurrency market.

As of September 18, 2022, Dogecoin’s market capitalization was $7.9 billion, and one DOGE was valued at around $0.06, making it the 10th-largest cryptocurrency.