Tuesday, November 12, 2019

OneGram – a Gold backed currency with revolutionary ideas

OneGram is looking to change the game by backing each coin with 1 gram of gold. Will it work?

We have seen hundreds of cryptocurrencies launch in the previous few months. Most of these remained obscured and quietly went away. Some of them became big competitors for the third or fourth spot in the cryptocurrency ranking. While most have simply been the same cryptocurrency but with different names, we have also seen some very important concepts emerge. People who are trying to cash in on the cryptocurrency craze are launching Bitcoin clones. Smart people who see the possibilities in cryptocurrencies are looking at Bitcoin’s faults and launching currencies that don’t have those faults.

OneGram is one such currency. The creators of OneGram took one of the most fundamental problems with Bitcoin and came up with a solution for it.

The Problem with Bitcoin and similar cryptocurrencies

Bitcoin is purely a digital cryptocurrency that is not ‘backed’ by any physical asset or any asset whatsoever. Bitcoin’s value is purely based on supply and demand. Most cryptocurrencies are based on the same idea. If more people want the cryptocurrency, the prices go up, if they don’t, then prices go down. The problem is that there is no ‘minimum’ value when it comes to these cryptocurrencies.

So while Bitcoin and other similar cryptocurrencies can soar to thousands of dollars in value, they can also come down to zero. You can have a portfolio of millions of dollars in cryptocurrencies and you can lose it all. Cryptocurrencies have no inherent value at all. Once they lose their transactional value they hold no other type of value. This worries people, as it creates unlimited risk.

Enter OneGram – backed by gold

That is why we are so interested in OneGram and want it means for the future of cryptocurrency. Each OneGram coin is backed by a gram of gold. This means that at a minimum, even if no one wants to buy OneGram or use OneGram for transactions, it has a minimum value equal to the price of gold. The price of one coin on OneGram can never go lower than the price of 1 gram of gold. This reduces the risks of the investors. You may lose some money, but there is a bottom floor of the value, below which OneGram will never go.  The good thing is that there is no similar ceiling – there is no limit on how high the price of OneGram can go, only on how low it can go.

Another very interesting thing is that the transaction fee is used to buy more gold as well – further increasing the gold backing of OneGram. There have been a few other asset backed currencies as well, but OneGram’s decision to use gold as backing makes it one of the most interesting ones around. We definitely want to see how the gold backed cryptocurrency performs.  Gold has long been a tried and tested way of backing currencies, and some of the biggest currencies we have right now were backed by gold at the start.

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