Digix: This New Crypto-currency Is Backed By Gold!

Gold investors have been slow and cautious to adopt crypto-currencies such as bitcoin…seeing them as false competition to real money such as gold and silver…The major argument from gold bugs has been that bitcoin is not backed by anything tangible [but] that has all changed with the recent introduction of Digix – the gold standard in peer-to-peer digital assets…because it is literally backed by gold.

• Digix employs a proof of asset (PoA) protocol to back Digix tokens (DGX) with “99.99% London Bullion Market Association (LBMA) approved gold. Each token is backed by 1 gram of gold, divisible to 0.001g. 
• Information regarding reserves are maintained on proof-of-asset cards in a decentralized database. 
• A triparty system is used to secure the gold with:
  • ValueMax Singapore, a publicly listed company, supplying the gold,
  • Bureau Veritas Inspectorate carrying out quarterly checks on the quality and quantity of gold in the vault and
  • MalcaAmit providing secure physical storage.

The contracts are fully on chain and autonomous. Our proof of asset protocol mitigates the risk of fraud. Deposit and withdrawal processes have to go through authorization procedures. We host quarterly independent audits, as well as allowing individuals to do a private audit of their bars.

Investors enthusiasm has been high. Digix held a crowd sale that sold out, raising a capped $5,500,000 only hours after the opening! Those that participated in the crowdsale receive tokens that given them a share of transaction fees from Digix. Those fees are paid in Digix, which requires the purchase of more physical gold.

DGD tokens are created for the crowdsale. They represent a share of the transaction fees from the DGX gold token system. The DGX tokens (1 gram gold tokens) are created through the Proof of Asset process where someone purchases a physical gold bar for storage at the participating custodian vaults.  

The users receive an Ethereum contract that represents the ownership of that physical gold bar that are signed by the Vendor, Custodian, and quarterly by the Auditor (documents are referenced by their IPFS file hash).

Digix is a completely new model of gold ownership that de-centralizes much of the process and limits counter-party risk. The thing with all digital gold systems, they are all being made in a privatized, centralized manner; their APIs feed directly back into the service of the digital gold company,” said Kai (co-founder and CEO of Digix). “Whereas in the case of building on Ethereum it’s just available for everyone to use since we are using the same standard token API that makes any digital assets on Ethereum tradable.

Digix itself represents the creation of digital gold tokens with the added transparency which hampered similar initiatives such as e-gold ten years ago.

• Digix tokens are each representative of 1g of real gold, with information regarding reserves maintained on proof-of-asset cards in a decentralized database. 
• Digix only focuses on high-value tangible assets and proving its existence not just by relying on paper trails.
  • Digix has an actual participating custodial vault that stores these tangible assets and
  • an independent auditor to verify this regularly.

Digix’ proof of asset certification is not only a paper acknowledgment of an underlying product, but also contains the legally valid digital signatures of all entities in the chain of custody that acknowledges the existence of the tangible asset.

While Digix is still in early phases…it:

• has the potential to disrupt the current methods of buying and storing physical gold…and
• will generate fresh demand for physical gold, moving a portion of demand away from manipulated paper gold schemes.

…Digix Gold…is not a replacement for owning physical gold in your possession, but it may be a complimentary method that allows you to diversify your storage locations (much like GoldMoney or BullionVault). The major difference with Digix is that it has the benefit of being easier to buy, sell and trade ownership digitally.