Inflation — A major problem of Macroeconomics and how to protect your wealth from it
Inflation has been a problem battled by numerous economies globally — both developing and developed, resulting in lowered purchasing power due to the eroding of the value of money and assets.
In the Euro area, over the past four(4) years(2015–2019), inflation has been on a steady rise, with the average annual inflation rate at 1.7% in 2018. This implies a net depreciation in purchasing power within the Euro area ceteris paribus.
Even the United States is not exempt from inflation as the annual inflation rate rose from 1.6% in June 1.8% in July 2019.
How to protect your wealth from inflation
Remembering the words of one of the most reputable investors alive, Warren Buffet, it is imperative to ensure losses are not incurred in the process of acquiring wealth. However, the indirect losses that arise as a result of holding cash or assets that do not appreciate over time, nor return an interest rate higher than the rate of inflation is a major issue many investors tend to overlook.
Investing in assets which have healthy growth potential and do not require maintenance nor incur other expenses for logistics and security would be one of the easiest ways to not only protect one’s wealth but also profit from inflation.
One of such assets/investments is unarguably GOLD — the blockchain-based cryptocurrency issued on Ethereum which is backed by fine gold high purity(99%).
Passive investment, steady growth?
One of the wealth lessons I have learned personally is to have a diversified investment portfolio. GOLD provides investors with the ideal opportunity to invest in not just one but two highly liquid markets (cryptocurrency and gold) with healthy growth potential.
The GOLD token issued on Ethereum is a token compliant with the ERC20 protocol. A GOLD token provides coverage to one gram of 99% fine gold. The price of GOLD is updated in real-time using the spot price of gold with minimal spread. Whenever a GOLD token is purchased, an equivalent amount of gold is committed physically to the Digital Gold Ltd’s vault.
In my previous article, I referred to the appreciation in the price of gold over the past ten years and how it serves a good means of protecting investments made in cryptocurrency. The cryptocurrency markets, using the two leading cryptocurrencies by market capitalization — Bitcoin and Ethereum are trading at about $10180 and $193 from about $3,400 and $84 respectively in February 2019.
Gold also has been steadily appreciating in value, recording an increase of over $220 per ounce between May and August 2019.
Although the cryptocurrency markets have recorded exponential growth, it is subject to very volatile price movements, increasing the potential risk for the short/midterm investor who is looking to profit from the price fluctuations within a short period. Gold being a physical asset with substantial market capitalization experiences only slight fluctuations within a short period (price stability) while creating the potential for profit over a long period.
In a bid to solving the major problems associated with investing in gold, Digital Gold LTD, a liquidity provider has introduced a working solution which incorporates blockchain technology, this solution is GOLD.
Loss of transactional value
One of the major problems associated with investing in gold is the inability to use gold for day to day settlement of debts even though it provides a good investment opportunity. GOLD eliminates this by ensuring that the monetary investment is still available for transactional purposes, even though it is invested in gold, making it easy to settle debts and make purchases using gold-backed GOLD tokens.
Capital intensive investment
Investing in gold is a capital intensive venture, making it difficult for individuals with little capital to make investments. GOLD bridges the divide between the various cadres of investors, enabling both small and large capital investors easily purchase gold through GOLD and benefit from its appreciation in value.
A lengthy purchasing process and expensive security measures
The issues associated with securing the physical metal to ensure that it is securely stored are numerous, not to mention the difficulty associated with purchasing physical gold. The filing of numerous paperwork and the absence of anonymity for gold investors are major challenges which are difficult to surmount.
With GOLD, however, these issues are non-existent as investors can make anonymous purchases instantly from the convenience of their smartphones or other internet-enabled devices.
GOLD eliminates these limitations/challenges and offers numerous value propositions.
To ensure transparency and accountability, Digital Gold Limited has ensured the following:
- Interactions via smart-contracts, ensuring that all transactions are recorded on the immutable blockchain, hence, transactions records cannot be falsified/altered.
- Regular auditing of the company’s vault by a reputable third-party BullionStar — to verify the vault’s gold content is commensurate with issued GOLD tokens.
- Audit of the project’s smart contract which is underway and is being handled by a note-worthy third-party.
These three major measures easily cast aside all shadows of doubt that may exist in the minds of investors because it answers most of the questions that may be asked like:
- How can I be assured of the gold purchase through GOLD?
- How sure am I of the vault’s content?
- Is the major means of interaction — the smart contract secure?
Conclusion
The internet and blockchain technology has revolutionized business interactions and created new markets for investments with immense growth potential. Gone are the days of filing numerous paperwork, hiring lawyers/third-parties for contract development and enforcement, just to invest.
As more individuals, businesses, sectors, and economies continue to embrace blockchain technology, GOLD will continue to see widespread acceptance as a more efficient means of investing in the highly liquid gold market which offers superior advantages over the existing means of investing.
Why work hard when you could work smart? Why spend more resources using traditional and outdated gold investment methods when a better alternative exists?
Why not find out more by visiting the website, or reading the whitepaper. You can also follow the project on social media platforms like Twitter, Facebook, and Telegram for updates and inquiries.
Article was written and published by KRB91 with 100% uniqueness.
