Digix Provides Users With Digital Tokens That Represent Legal Ownership of Assetsby Fintechnews Singapore October 14, 2015
Combining the oldest form of money and one of the most cutting-edge technologies, commodity-backed digital currencies have been praised for allowing users to safely store assets such as gold on the blockchain.
Unlike bitcoin or other cryptocurrencies which solely rely on demand and offer, they give an intrinsic value and tangibility to a digital token.
BitGold, Midas Reserv and DigitalTangible are only a few startups that are providing users with digital tokens that are representative of a certain amount of gold or silver.
Now, Singaporean startup DigixGlobal seeks to do just that with digital tokens that correspond to legal ownerships of physical assets.
One Digix Gold token represents a one gram share of a physical gold bar under the control of the company’s “Minter Decentralized Autonomous Entities,” a software that can perform the functions of an organization based on a pre-determined set of incorruptible business rules without any human involvement, also known as smart contracts.
Users can redeem Digix tokens any time or trade them on the Ethereum blockchain for goods, services or any other digital assets, including bitcoins, ether and Ethereum-based tokens on EtherEx, a decentralized cryptocurrency exchange built on the Ethereum platform.
These digital tokens are issued by individual users by giving ownership of a physical asset through a “Proof of Asset™ Digital Ownership Certificate.”
These certificates are Ethereum smart contracts that provide a legally and cryptographically binding determination of ownership of physical assets under the guardianship of a participating custodian on the Digix decentralized platform.
It also certifies the agreement between the user, the vendor, the custodian, and the independent auditor, and provides a complete history of the chain of control from all these parties.
“The digital Proof of Asset (PoA™) Digital Ownership Certificate brings together the modern blockchain technology paired with the stability and liquidity of gold bullion,” Philip Carl Mullan, senior advisor of Digix writes in a blog post.
Mullan, who has over 15 years of experience in the digital currency industry interacting with regulatory agencies and global digital currency system, joined the company last month to provide Digix with consultation on the integration of new decentralized currency technology within conventional financial structures.
“Similar to bitcoin, the online trading of Digix assets is a decentralized activity. Gold’s value, as secured by digital units, is traded through online person-to-person transactions without any central point of failure or requirement for an antiquated third party clearing agent. Decentralized Digix global asset transactions, backed by gold bullion, occur instantly and move securely along the Ethereum Blockchain. […] Digix gold represents the legal ownership of gold bullion held offline, making this new technology a very useful tool for global financial settlements.”
Digix is preparing a crowdsale of its tokens, expected to be announced soon. The company also plans to release an app that would be a full-featured Ethereum wallet designed to harness the full capabilities of the Digix Proof of Asset technology.
Watch Digix’ video presentation:
Image credit: Gold Bullion, Pixabay.