Blockchain and CoinShares, which are part of a consortium of companies, have launched a special token called Digital Gold. It is a part of the Bitcoin cryptocurrency sidechain and is backed by $20 million worth of physical gold. The project was launched on 10/15/19. The network’s assets include gold bullion and coins worth $20 million. They are stored in the vault of the Swiss custodian RAMP. There they were tokenized in the Bitcoin Ocean sidechain. For those who don’t know, this is a network that was developed by a blockchain company called CommerceBlock. This network was created on the same code base as Liquid from Blockstream. It is worth noting that Liquid is considered a federated sidechain. In other words, this is when there is a separate group of people who act as intermediaries between the parent Bitcoin blockchain and the network itself. But according to CommerceBlock, they were able to completely eliminate the need for this second level of trust. This approach allows asset custodians to issue tokens in managed sidechains. Moreover, they can control them. And then, these networks can be connected to the Bitcoin blockchain using a protocol called MainStay CommerceBlock. “The immutability of the sidechain through the MainStay protocol is ensured by constantly confirming the most recent Ocean block hash on the Bitcoin network and linking the input of each subsequent confirmation to the output of the previous one, which allows you to track the “StayChain” confirmation down to the zero block and prove that there is only one valid block chain at any given time,” CommerceBlock states. CoinShares believes that it is thanks to the use of MainStay and Ocean that they were able to combine the traditional value of gold with the best qualities of Bitcoin. “DGLD combines the stability of the world’s longest-lasting asset, gold, with the security of the world’s most secure blockchain, Bitcoin,” said CoinShares President Danny Masters. The price for each of these tokens will be equal to one 1/10th of a troy ounce of gold held in the RAMR vault. By the way, the DGLD consortium assures that the token cannot be subject to the same regulatory restrictions as traditional gold-based investment products. It is commonly classified as a “category 5” product in the Swiss Financial Market Supervisory Authority’s (FINMA) stablecoin taxonomy. This category was put on reserve for various cryptocurrency projects. Moreover, those that are directly related to exchange products that have property rights. The Digital Gold press release also emphasized that institutional and retail investors must first buy the token. And only through the Blockchain.com exchange – The PIT. In fact, the exact release date is still not known for certain. However, the consortium assures that the token will become available only at the end of 2019.

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