Building a Gold backed private cryptocurrency for a store POS system
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Building a Gold backed private cryptocurrency for a store POS system

Sarah Scully

20 mins read

Of all the precious metals, gold is the most popular as an investment. Customers generally buy gold as a way of diversifying risks, especially through the use of futures contracts and derivatives. The gold market is subject to speculation and volatility as are other markets. Compared to other precious metals used for investment, gold has the most effective safe haven and hedging properties among a number of countries.

Gold’s relative scarcity, its portability (you can carry small bars, coins or jewellery), and its great demand in industrial applications, make it a highly desired commodity.

Cryptocurrency has adopted some of gold’s benefits with the creation of a bitcoin that is scarce: through the introduction of a digital coin that can be easily and effortlessly transmitted and by the creation of a distributed, decentralized blockchain that aids business. Cryptocurrency also adds value by making one's transactions fast, secure and transparent.

Recent cryptocurrency startups have succeeded in integrating physical gold into the blockchain. Gold has always been a difficult asset to move. People would have to buy gold blocks and place them into a secure vault. The process was clumsy, laborious, slow, expensive and vulnerable to hacking, among other problems. The blockchain makes the process quicker and easier helping to protect your gold, slashing expenses, allowing the asset to be moved effortlessly across borders, all the while shielding your investment from theft and loss.

To prove this concept we build Gold based cryptocurrency POC for a client Where he wants to use his own Gold backed private cryptocurrency in his internal POS system.

The requirements were, users will request cryptocurrency via fiat currency like USD, for the similar amount system will buy Gold via Gold exchange and store it in the vault and issue the cryptocurrency token to the user's wallet. Once the user buys anything from the store he can pay using that cryptocurrency and it will transfer tokens to the store wallet. If the user wants to redeem his gold/fiat currency back, he can request to do and system will pay him his amount and burn the similar amount from token total supply to maintain the trustworthiness and vault balance.

We Square Root IT solutions built POC according to it and proved the concept of Mint and Burn tokens using Ethereum based smart contracts.  You can see POC here and video explanation on this URL.

If you have a similar requirement or want to build blockchain based application why not give Square Root Solutions a call today to discuss your App development. Call us on 01-9081982 or alternatively why not pop us an email to discuss on [email protected]

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