By Rebecca Campbell
A research report by Celent has looked at whether or not gold could be brought back as a means of exchange through bitcoin’s underlying technology, the blockchain.
The report, Micro Gold: Assessing the Use Case of DLT and Physical Gold, determined that the blockchain could transform the way gold is utilized as a form of currency, delivering the benefits associated with bitcoin.
According to senior analyst in Celent’s securities and investment practice, John Dwyer, a currency needs to have three qualities, reports EuroMoney. These are a store of value, a medium of exchange, and a unit of account for valuing goods and services.
Even though gold may have been used as a form of currency in the past, that is no longer the case in today’s society. Not only that, but the cost of storing it is too high for practicality.
Blockchain technology, however, could hold the answer.
Dwyer states that putting gold on a distributed ledger means that the ownership of gold can be broken down into small amounts. He mentions Goldmoney, a fintech firm that holds gold in vaults and offers a MasterCard through which payments can be made, as an example.