Denmark-based Bitcoin payment processor Coinify and Singapore-based digital assets company Digix have announced their plans to create crypto-assets based on Ethereum, International Business Times reports. Ethereum is a decentralized platform that runs applications without any issues encountered on the Internet today, such as downtime or third-party interference.
The CEO and co-founder of Digix, Kai Cheng Chng, explained the company has been looking for other solutions to review transaction history in the blockchain. The company started on the colored chain concept, which “colors” Bitcoins to designate different physical or financial assets. Chng explained that the Ethereum network would reduce transaction confirmation time to around 17 seconds compared to the 10 minutes on the Bitcoin network.
How the System Works
Chng explained that when someone buys gold with Bitcoin, the Ethereum blockchain would give the buyer a certificate. Next, the proof of asset protocol ensures the certificate is uploaded onto the InterPlanetary File System (IPFS) and permanently kept on the Internet. Following this, every entity in the chain of custody would need to use their digital key to sign into the blockchain to acknowledge the certificate.
The person holding the certificate could then use what’s called a “minter smart contract” to convert the gold asset into tokens.
Chng stated these assets can be traded through crypto-exchanges like Cryptsey or peer-2-peer through EtherEx. While the partnership is focusing on trading gold, the article stated that diamonds will be coming soon.
The Singapore-based company aims to unite the transactional properties of cryptocurrencies like Bitcoin with physical assets. In an interview earlier this month with Bitcoinist.com, Chng explained the three processes Digix uses to make their platform suitable for physical assets:
- Proof of Asset (PoA) Certification Process: Used to create PoA Asset Cars, which are certified using digital signals from the chain of custody.
- Minter Decentralized Autonomous Entity (DAE): Used to create DGX tokens that accept PoA Certificates.
- Recaster DAE: Used to convert DGX tokens back into PoA Asset Cards.
Featured (homepage) image (Ethereum logo) via ethereum.org/assets
Coinify logo via the Media Relations page of their website