Post
Topic
Board Bitcoin Discussion
Re: Gold forum
by
gentlemand
on 07/06/2019, 10:22:13 UTC
It's partly about the ability to easily hedge, trade and collateralize positions. If ounces of gold and barrels of oil were tokenized, they could be traded and collateralized just as easily as cryptocurrency is today instead of traders being limited to buying and selling exchange-issued futures contracts.

There may also be privacy benefits. Tokenization -- assuming the tokens are issued on a decentralized blockchain like Ethereum -- ensures the existence of secondary markets and the ability to avoid centralized exchanges and KYC. Regulations around stablecoins and cryptocurrencies (at least for now) are much more lax than those governing securities.

So, if you want to trade gold and do it away from prying eyes, this might be one avenue. It obviously doesn't solve the trust issue (it's essentially paper gold) but it brings other benefits.

Maybe I was being too literal minded.

A gold token, why not? A gold coin as an alternative to a dollar coin for trading, I wasn't getting it.

Since gold has long gone full paper then there's no particular reason not to. It may be less offensive than full paper gold but in no way will it tempt committed gold bugs and rightly so.