Thomas is the Chief Executive Officer of Allocated Bullion Exchange.
In 2017, when the price of Bitcoin reached parity with gold (by the ounce), cryptocurrency grabbed the attention of gold investors around the world for the first time. The parity, however, was short-lived, as Bitcoin has drastically dropped in value since. In 2018 so far, Bitcoin has shed its price by more than 50 percent at times from its year-end price of $13,000 in 2017.
The age-old stability of gold, however, has survived the trials of time, consistently providing real value to all investments. Gold prices have been on an upward climb since 2011, and are expected to provide a profit opportunity of 300 percent by 2020 as investors flee to gold as a safe haven from market uncertainty and political turmoil.
The idea of a gold digital currency has always had an appeal for those looking for an alternative payment system, much before the era of bitcoin and blockchain technology. Not long after the internet went mainstream E-Gold emerged as the first digital currency backed entirely by gold in 1995. At its peak, millions of people around the world were using this service across hundreds of countries.
However, like other similar platforms that cropped up during the time, E-Gold’s downfall was inevitable. As the number of users increased, servers buckled under the growing traffic load, hanging transactions and frustrating users. Cyber scammers also entered the scene, launching a sortie of phishing attacks against users, tricking thousands of them into disclosing their E-Gold passwords before draining the accounts. The final nail to the coffin was the system being used for malicious activities such as money laundering, as users could anonymously permit users to open accounts and transfer funds without trace anywhere in the world.
Although the concept behind digitizing gold for transactions may not b...