Co-Founder, Block 5
It is an interesting question: Bitcoin in relation to gold. We are talking about the only two store-of-value assets in the world that are not centrally issued. I know both industries very well, as I have a 17‑year history in the precious market. I think there is a lot we can do to jointly market or push forward access to new retail markets in gold via this new technology. That is my focus of what I will be talking about here: how we can increase the current addressable market of gold by embracing these new technologies.
We are starting to see a waning interest in ICOs or the format of raising money that way. We are going to see a new wave of products, like security tokens, NFTs non-fungible tokens and asset-backed projects – projects that have an asset-backing in a fractional ownership of real estate, for example, or ownership of gold, tokenised. This area is really interesting because the generation under me – like millennials and below – have a real grasp for that technology. They are interested in it. The idea of being self-custodian and your own bank vibes with that generation, so there are some opportunities where I think an interesting asset-backed gold project would increase gold’s market.
By providing a reliable solution to tracking gold from origin, imagine we had the ability to have a distributed database, starting with the mining process, where we know the gold’s origin and then we are able to track that through the parent relationship of Blockchain, creating a private key based on that information coming out of the ground and into a refinery, tracking the gold where it has been refined, and moving up the chain into storage and into banks. The gold bar is melted, lets say it is a large bar and we create kilo bars off of that. We can create a private key that is the parent of the original bar. We basically have a way to transparently track gold from its origin all the way to its end use, whether it be in jewellery or in a central-bank vault. That is the idea of the request for proposal (RFP) that the LBMA has done: the idea of provenance. We can then know with certainty and we can eliminate areas where have sanctioned gold. The ability for that gold to enter the system will become near-impossible because we have tracked everything on a blockchain up until a certain point. It is a fascinating project. It is one that I am interested in assisting the LBMA with and it will redefine how the industry works.
I am a big fan of and believer in increasing gold’s addressable market via this technology, tokenising gold and pushing it out to a younger generation, with the idea of provenance. This supply-chain-provenance idea is not only affecting the gold market but will affect pretty much every market out there. There was recent news about two months where Walmart, one of the world’s largest retailers, put out an RFP to its produce partners, saying, ‘If you are going to provide produce for Walmart, we would like that done on a blockchain, so we have absolute confidence and we can track the traceability. If we need to do a recall, we can take a look.’ It will affect the auto industry. Pretty much every industry on the planet will be involved in the supply chain. This is not an LBMA-specific thing. I hope that answers your question.
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