It seems like it wasn’t that long ago when people were wary of moving from the gold standard - when the dollar was of a fixed value relative to gold and assets held by the government - to floating currencies that were subject to changing value.
How far we have come since then is amazing considering that public understanding and adoption has progressed all the way from changing to floating currencies, to now using cryptocurrencies.
Despite the amount of progress that has been made in terms of public perception and acceptance of cryptocurrencies, there are still a few major common concerns. These mirror the same concerns when the dollar left the gold standard.
Where is the Value?
The road to mainstream crypto adoption seems to be a long, winding and tedious one. One of the biggest setbacks to this cause is not only general misinformation, but a concern about lack of intrinsic value or tangible assets. It seems that the greatest barrier to use of cryptocurrencies and tokens by new users, is their fear that market volatility and price fluctuations may eradicate a cryptocurrency, due to its lack of value outside of its own circulation.
Society has long since accepted that fiat currencies hold value because the government reassures us that it will continue to do so. It’s taking far longer for people to realise that cryptocurrencies can achieve the same stability if enough consumers place their confidence in it.
This is where Jinbi has potential to shake up the scene and inspire confidence. Jinbi was actually first created, not with gold backed currency in mind, but rather as a modern and secure approach to buying and selling gold.
The creators realised that it is a very complex and onerous ordeal to purchase your own gold. With so many people looking to divest from more volatile assets into the world’s most stable form of security, it was clear that there needed to be a better solution.
The legal landscape associated with purchasing gold through conventional means can be very rocky. Onerous contracts and ambiguous obligations make it an unpractical step to take for average consumers.
Jinbi token takes a total start to finish approach at fixing this. The way it works is quite simple in theory in process.
- Jinbi holds what is known as an off-take agreement with the gold producer.
- The gold is mined and packaged (produced) and prepared for transporting.
- The gold then goes to be refined at PAMP or Kaloti.
- Following the production and refinement of the gold it is then transported to storage facilities.
- Bureau Veritas are without a doubt, the worlds best known and largest independent verification and supply auditing companies.
- Once Bureau Veritas have confirmed and verified that the appropriate gold reserves are being held, this is where the real magic happens.
This essentially means that Jinbi have bought a fixed amount of the producers future production. It can be thought of as a contract of sale prior to the object being sold, even being created. It creates a binding obligation between both parties so that quantities and prices have to be honoured in the future. It’s an ideal way for Jinbi to have guaranteed gold reserves, without needing to purchase it all up-front.
Kaloti is the middle East’s largest refinery. Based in Dubai they have an almost 30 year history of refining gold for consumers all over the world. PAMP SA has a prestigious history as one of the worlds more renowned refineries, being European owned for over 30 years. They have storage facilities in Switzerland, New York and New Delhi.
The gold is stored securely and is insured. Jinbi seem to have taken many measures in ensuring the quality of their supply chain.
Their services range all the way from non-destructive of minerals and resources at the exploration and mining phases and expand all the way out to assessing and verifying manufacturing factories for third party clients who are dealing with overseas suppliers. According to Jinbi, it will be the role of Bureau Veritas to conduct quarterly audits on Jinbi’s gold quantity, quality and their record keeping. It becomes apparent that Jinbi are very determined to prove the transparency of their processes.
The Jinbi token is an ERC20 compliant token that utilizes the Ethereum smart contracts platform to run its smart contracts.
When purchasing Jinbi tokens, the end user can have confidence for many reasons. Jinbi uses a network of custodian vaults to store the gold that comes from Kaloti, or from PAMP which are considered one of the worlds best bullion brands.
The insured gold that has been verified in quantity and quality by Bureau Veritas is then bought and sold on the strength of Ethereum smart contracts. The world’s most robust and well adopted smart contracts processing engine is at the heart of all good tokens and blockchain based companies. Jinbi is no different.
To Conclude - Back to the Gold Standard
What started as a cutting edge way of trading and transacting gold, has led to one of the most promising tokens available in 2018. Gold is considered to be recession proof. Whenever there is turmoil, political or economic, the price of gold can usually be seen to increase. Macro economics dictate that when more complex asset classes are being considered risky, the price of gold will increase as people divest from other assets and return their money into gold.
Gold prices will generally only go down when consumer confidence and global economic activity is once again increasing. This is the reason so many people are considering it important to not only be able to buy gold readily, but to also have a reliable and stable token that is gold backed.
It may have taken decades for the cycle of things to come full circle, but it has become evident that there is a place and a need for asset backed currencies alongside fiat currencies and general cryptos.
Whether you’re looking for a better way of purchasing gold, or you think that current stablecoins are still lacking in security, Jinbi may well be worth your while.
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