DigitalTangible, a company which offers gold and cryptocurrency brokering services via blockchain-based promissory notes, has successfully launched its gold-Bitcoin exchange, and, at the time of publication, broken $190,000 worth of precious metal in sales.
The exchange exists in partnership with Amagi Metals, a Better-Business-Bureau-accredited precious metal broker. The theory is pretty straightforward: Both the gold and Bitcoin markets are in a state of considerable flux right now, producing a lot of interest in speculating on both. However, gold transactions that physically move the gold are extremely high latency, gold being inherently heavy and prone to being stolen if moved casually. That makes it impossible to reliably profit on short-term swings of the network.
The solution here, in the eyes of DigitalTangible, is to provide a service by which they sell gold to users (gold which is secured at a variety of trusted depositories). The company then issues users an equivalent number of units of a gold-backed cryptocurrency. This cryptocurrency can then be exchanged for Bitcoin at a relatively high rate of speed, to allow speculators to attempt to profit on short-term market volatility. When the users want to get out, they can redeem the promissory note for either gold or Bitcoin, which can then be shipped to them.
The CEO, Taariq Lewis, says:
“The strong demand and immense success of our initial sales volumes push us to expand our capabilities in serving the customer who lacks a well-established marketplace for buying and selling gold with speed, transparency and liquidity. Online gold marketplaces already exist, but we are now lowering the marketplace transaction costs borne by investors; something that was previously impossible to deliver.”
The launch coincides with the creation of a Bitcoin-denominated precious-metal price tracker, a first of its kind that may or may not prove to actually be useful.