What is blockchain technology? Impact on the traditional precious metal industry

Think of a blockchain as a novel, digital form of record-keeping. This article explores how this revolutionary blockchain technology has had such a great impact on the finance market, particularly the traditional precious metal industries. How does digital currencies utilise blockchain technology? What are the opportunities for precious metals on blockchain?

BLOCKCHAIN EXPLAINED: A QUICK OVERVIEW

• A blockchain is a database that stores encrypted blocks of data then chains them together to form a chronological single-source-of-truth for the data.
• A blockchain can record information about cryptocurrency transactions, NFT ownership or DeFi smart contracts.
• Decentralised blockchains are immutable, which means that the data entered is irreversible, also allowing full real-time access and transparency to the public.
• Blockchain technology is used for many purchases including cryptocurrency; banking; assets transfer; smart contracts; supply chain monitoring and voting.
• The key advantages of blockchain are higher accuracy of transactions; no need for intermediaries; extra security; more efficient transfers.

Key Elements of a Blockchain

Blockchain is a shared, immutable ledger of all transactions across a peer-to-peer network, that is duplicated and distributed across the entire network of computer systems on the blockchain. IBM explained the success of a blockchain consist three main elements included:

Distributed Ledger Technology (DLT)

All network participants have access to the distributed ledger and its immutable record of transactions. With this shared ledger, transactions are recorded only once, eliminating the duplication of effort that’s typical of traditional business networks.

Immutable Records

No participant can change or tamper with a transaction after it’s been recorded to the shared ledger. If a transaction record includes an error, a new transaction must be added to reverse the error, and both transactions are then visible.

‍Smart Contracts

A smart contract is a self-executing contract with the terms of the agreement between buyer and seller being directly written into lines of code. The code and the agreements contained therein exist across a distributed, decentralised blockchain network.

Unlimited Opportunities: Precious Metals on the Blockchain

Combining gold with crypto through tokenisation could solve the current incapability of using gold for making distance-payments without middle-men. Extending this concept into the power of smart contracts and DeFi systems could simply revolutionise the precious metals market as we know it, if done right.

xbullion took the opportunity and created a global network for the settlement of physical gold and silver bullion. Applying the benefits of blockchain to bring transparency, efficiency and accessibility for users to access the largest bullion marketplaces in the world, without charging ongoing custody fees. xbullion provides best practices around insurance, quality control, storage and auditing, working with world class suppliers to bring an institutional grade bullion storage solution. But what is xbullion GOLD?

“Blockchain technology means we can democratise access to precious metals for everyday investors. The combined benefits of accessibility, simplicity, security and liquidity are compelling.” - CEO of xbullion Australia, David Lightfoot

Leveraging the Combined Power of Precious Metals and Digital Gold

Gold and other precious metals have served as key investment avenues for those looking to hedge their bets against market trends. Because precious metals are rare, the supply remains low, which means that price tends to go up over time.

Moreover, precious metal prices don’t follow the market. In 2020, under the economic pressures of the pandemic, investors flocked to precious metals with gold and palladium going up more than 20% in value, while silver went up 47% and platinum went up 10%. Read more: Why Is Gold Bullish When Bitcoin Cryptocurrency Dips?

With its emergence as a high-value commodity, cryptocurrency has been referred to as “digital gold.” Much like precious metals, it offers an investment opportunity that is insulated from traditional markets. At the same time, crypto also comes with the added benefit that it is a currency that can be used in place of fiat currencies. This is where it offers huge possibilities for precious metal vendors: it can solve the problems associated with traditional payment options, while increasing their market and decreasing overhead.

Broadening Market, Increase Security While Lowering Overhead

Precious metals and crypto have both become attractive to customers looking to capitalise outside of traditional markets. This means that there’s a market overlap and customers buying precious metals are also buying crypto. xbullion offers 27/7/365 access to global liquidity and our distributors are able to access institutional market depth and pricing through official APRs. The ability to pay in crypto draws in customers who might not otherwise purchase products with traditional payment options. Click here to find out more about how xbullion works.

With historical hacking, crypto exploit and scams have lead to mistrust in cryptocurrency, to ensure the bridging between traditional and digital market, xbullion provides best practices around insurance, quality control, storage and auditing, working with world class suppliers to bring an institutional grade bullion storage solution. Xbullion is built on Ethereum blockchain to ensure a decentralised, immutable ledger of transactions publicly available. Comprehensive, regular and independent audits will be conducted to ensure the equivalent underlying value of the tokens on issue.

If you are interested in owning digital bullion, visit A guide to gold ownership or contact us directly.