Digital Gold is a form of cryptocurrency backed by gold reserves, stored in private entities’ safes. Using this currency is relatively difficult due to its popularity and certain risks in management and exchange rates.
If you want more detailed and interesting information about the concept of Digital Gold, why not take a few minutes to follow upcoming content from AZCoin?
What is Digital Gold?
Digital Gold, more fully written as Digital Gold Currency (DGC), is a form of cryptocurrency backed by gold reserves. These gold reserves will be kept by authorized private agencies in safe deposit boxes with a significant physical reserve, reflecting 100% of the customer’s account.
Digital Gold was once seen as the best means to survive economic fluctuations due to its direct link to gold, a highly valuable asset. Besides, this cryptocurrency is not linked to any country’s monetary policy or economic system, thereby avoiding the risks of political fluctuations.
However, the truth is not at all like the above expectations, even though they appeared in the mid-1990s by its originator and leading name, E-Gold. Not long after that, a series of other names and organizations were also born with similar structures and ways of operating, but they all had one thing in common: they failed.
How does Digital Gold work?
As mentioned earlier, Digital Gold is a cryptocurrency offered and maintained by private organizations authorized to preserve gold. In other words, these organizations must ensure financial resources by keeping a physical reserve of gold.
When owning any unit of Digital Gold, its holder can make payments in gold or currency units representing gold held in the physical form provided by an authorized company. However, this use is not very common at present.
Why did Digital Gold fail?
Although it is trusted and continuously developed by many investors as well as large organizations, until now Digital Gold has completely failed. If you want to know the reasons leading to the failure of this cryptocurrency, here are the main reasons we collected:
- Too many risks arise from the loose network operated by independent private organizations authorized to preserve gold.
- Not widely accepted and used among the community and investors.
- Exchange rate risk is relatively high because the value of gold fluctuates much more than other currencies.
- Not accepted by the laws and regulations of many countries.
- More popularity and reliability from Bitcoin.
In short, the reason for Digital Gold’s current failure comes from the fact that it has too many investment risks but is not yet popular and widely accepted. Add to that the emergence of stronger and safer cryptocurrencies like Bitcoin, which is currently trusted by many famous investors like Michael Saylor, Winklevoss,…
Is there any future for Digital Gold?
At present, the concept of Digital Gold or Digital Gold Currency (DGC) is not popular and is somewhat forgotten. However, this is not quite the end for cryptocurrency that operates on the value of gold.
The birth and end of Digital Gold itself was the foundation for organizations and investors to later learn and thereby form Stable Coins whose value is anchored to the price of gold. And not only gold but also other valuable assets such as USD, EUR, oil,…
In general, the failure of Digital Gold is the foundation for us to have the current Stable Coins, which is the next step for an extremely volatile financial system.
Conclusion
So we have come to the end of the journey of content surrounding Digital Gold, an unfortunately failed currency. Hopefully, from this content, we have given you a broader view. Thank you for taking the time to follow and, if possible, see you again in other content from AZcoin.
I am Tony Vu, living in California, USA. I am currently the co-founder of AZCoin company, with many years of experience in the cryptocurrency market, I hope to bring you useful information and knowledge about virtual currency investment.
Email: [email protected]
