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Commodities, Explained

2.

The main characteristic is pricing.

This market is totally dependent on supply and demand. Commodities have no producers on the market, all the companies looks the same and do not differ significantly. So, the price is set based on demand and market opportunities. This fact attracts a large number of speculators.

Another feature is standardization. Every commodity must have something that is common for every unit, i.e., weight, density, size and so on. That’s why some products, for example, diamonds are not commodities. The diamonds are unique, they have cut, density, size and color that are different for each gem.

These features are used in money mechanism.

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Why Are GoldMint Launching Their ICO After Chinese Hungry Ghost Festival?

Do you believe in ghosts? The seventh month in the traditional Chinese calendar is celebrated as a ‘Hungry Ghost Festival’. In Mandarin Chinese, this festival is called 中元普度, or ZhongYuan PuDu.

This year, the festival started on Aug. 22 and will end on Sept. 19. Whether you believe in ghosts or not, the cultural significance of this festival is immense and is celebrated across East Asia and South East Asia, where people believe that the gates of hell are opened and spirits walk the earth.

However, the hungry ghost festival is not just about vengeful spirits or scary apparitions, it is a time to revel and make merry as well.

During this period there are many cultural events that can be enjoyed if you are near a Chinese community, but there are several taboos as well.

The festival has an impact on decisions like investments and it’s why GoldMint have decided to launch their initial coin offering (ICO) on a very special day. We’ve already covered what GoldMint is about at Cointelegraph, and how they plan to revolutionise the digital gold landscape.

When spirits walk free

It is said that the Buddha Shakyamuni had a disciple, who had special powers. The student was able to see his deceased mother, who’d been born as a hungry ghost in another realm with divine vision.

Even though the disciple would try to feed his dead mother, she could not eat because the food would turn to coals before it reached her mouth. Sorrowfully, the student asked Buddha for help. Buddha suggested that on the fifteenth day of the seventh lunar month, the student assemble monks and offer them food and five fruits, and also make other offerings.

This would enable his mother to escape the torment she was in.

Ever since then, it’s believed that in the seventh month, making offerings to gods, praying for ancestors and treating the hungry ghosts would liberate dead ancestors from suffering. This is how the spirits would be able to walk free from their suffering.

In writing this piece, we talked with Willie Tan, our very own China expert at Cointelegraph, who revealed that the Chinese burn incense, candles, hell notes (fake paper money) and other offerings as tokens of kindness and offerings to hungry spirits.

Entertaining visitors from hell

During the Hungry Ghost Festival, several nightly entertainments are organised for the benefit of the spirit visitors. Getai, or Chinese variety shows, are organised and filled with live performances.

Altars are also set up for the King of Hell called Tai Su Yeah, who is based on the Hindu and Buddhist King of Hell, Lord Yama. Everyone can visit these performances and enjoy, although they are known to be loud and boisterous.

It’s a great taboo to sit in the front row because those seats are reserved for special ghost visitors, who like to enjoy a show now and then.

It is also possible to witness the burning of the effigy of Tai Su Yeah and other deities, as well as paper items offered to them near midnight, after the period of outdoor celebration has finished.

The schedules can vary from place to place and from community to community.

There is no ghost in the Goldmint machine

The month during which the Hungry Ghost Festival is celebrated is considered to inauspicious for launching new businesses.

It is only when the month is over, i.e. on Sept. 20, that it is be considered a good time to launch a new venture. In keeping with the traditions of the Chinese people and a great majority of Asian people, GoldMint have decided to launch their crowdsale on the first day of the eighth lunar month.

It’s not that they are superstitious, but rather so that the crowdsale can be more inclusive and people from diverse cultures and backgrounds can participate.

Talking to us about the decision to start the crowdsale after the Hungry Ghost Festival, Dmitry Plushchevsky, the co-founder of GoldMint project explains,

“As we know, some Chinese people who honor the tradition tend to avoid investing in stock markets during the ghost month, as it might attract bad luck in the future. I wouldn’t say that our team is prone to prejudice. What`s true is  that our ideas have much potential across Asia. There are no ghosts in the Goldmint way.”

Goldmint crowdsale will unlock gold for everyone

As the crowdsale begins on Sept. 20, 2017, it will be the first day of the eighth month of the Chinese calendar. Goldmint will put 10 mln MNT tokens on sale, out of which seven mln are being sold through the ICO. They have released a detailed whitepaper on the sale, which covers the technical aspects, as well as has information on the usage of funds.

The launch of MNT is the first step that Goldmint are taking in order to create a gold-backed crypto token in the future. MNT will allow funds to be raised for Custody Bot, which is an automated safe-type device that allows for assessment, storage and transmission of digital gold through the use of Blockchain technology.

GoldMint plans to bring transparency to the way the precious metal is handled by pawnbrokers and others, which will in turn enable greater use of gold as a currency, and make it inherently more usable than it is today for everyone. Even for hungry ghosts from hell.

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Goldmint Is Unlocking Liquidity in Gold to Allow P2P Lending

Businesses and ordinary people can suffer from cash crunches, and the need to borrow money may take them to various financial institutions, but it’s not necessarily guaranteed that they’d be able to secure credit when they need it.

It’s therefore no surprise that pawnshops have an important role to play in the daily lives of many individuals and small businesses. You may think that pawnshops have a limited role to play in a modern setting, but you’d be mistaken.

Recently, a Time article revealed that 28 percent of college educated millennials between the ages of 23-55 have accessed short-term lending from pawnshops and payday loan providers in the last five years.

While pawnshops may be catering to an unserved category, they themselves being mostly cash-based businesses have difficulty finding credit for their business needs.

Dmitry Plushchevsky, the co-founder of GoldMint project, has been working on this problem by using a peer-to-peer lending mechanism.

GoldMint is distilled from its founders’ experience

Dmitry has had an eye on the pawnshop segment since 2015, when he noticed that while the pawnshop business was immensely profitable, it was void of technological progress. He worked with a team of four people in 2016 to address the four main issues that faced the pawnshop businesses:

  • realization of unclaimed pledges
  • wired payments
  • funding of pawnshops (lending)
  • the introduction of unified standards (consolidation)

The co-founder of GoldMint worked with a network of 140 pawnshops in Russia to try to solve the challenges facing them.

As an example, for addressing unclaimed pledges Dmitry helped build Lot-Zoloto, which became a profitable business with a turnover of nearly US$ 10 mln per month.

In order to bring transparency to the industry, he introduced a specialised pre-paid MasterCard by the name of Bogatstvo, which can be issued by pawnshops and used at any Russian bank ATM without commission.

GoldMint is the next logical step in solving issues related to wired payments and unified standards.

GoldMint will change the way P2P lending works

GoldMint is a comprehensive P2P solution that allows businesses like pawnshops to raise credit.

Plushchevsky explains the scale of the problem:

“In Russia alone the portfolio of pawnshops (the collateral value of things in pawnshops) amounts to $1 bln and, naturally, in other countries it is not too small either: in Spain – $3 bln; in Great Britain – six bln pounds. This is a colossal amount!”

These humongous portfolios are themselves what GoldMint aims to transform into a credit raising opportunity.

Barriers like international borders, will dissipate with the ushering in of GoldMint, and people or entities will be able to lend to pawnshops and get returns on their extended loans.

Custody Bot is the solution that GoldMint wants to use, to make sure that the collateral offered by pawnshops can be audited and verified. Custody Bot is a type of safe-like device with a built in spectrometer and hydrostatic balance. 

Once the gold is assessed by the Custody Bot, it can be stored safely till the time it is retrieved by the way of a special code unique to each item stored.  

The use of Custody Bot makes the whole process not only verifiable, but the device will also be able to relay information through to a Blockchain in a trustworthy manner.

Lenders will profit, either as the owner will reclaim the stored gold in Custody Bot, or in the case of an unclaimed pledge it can be sold off by the pawnshop.

GoldMint crowdsale can provide investors with regular income

GoldMint is holding an initial coin offering (ICO) in less than a week’s time starting Sept. 20, 2017. They have published a detailed whitepaper which lays the details of their crowdsale.

The token they are offering on sale is called MNT. Out of the 10 mln MNT, seven mln will be on sale in the crowdsale. MNT gives owners an opportunity to generate a ‘regular income’ by offering computing power.

Plushchevsky explains:

“In the usual proof-of-chain projects, the miner is chosen on a contest basis, so great processing capacity is required. We have a different approach – each owner of MNT tokens is guaranteed to receive commission for the approval of each transaction, according to the number of MNT tokens available in it, as a percentage of the total number.”

In the first half of 2018, GoldMint plans to launch another token by the name of GOLD, which will be tied to the price of its namesake precious metal. MNT Token will provide the right to approve the transactions of these GOLD tokens, and will give the holders the right to receive a reward for doing so.

While MNT will have a transactional nature, GOLD will come in handy to provide liquidity, which can then be sent to various pawnshops.

Liquidity is real spin of GoldMint

GoldMint is moving in a direction that will unlock the potential liquidity in Gold, particularly one hidden in unclaimed pledges lying in pawnshops. In the future, GoldMint plans to bring Custody Bots to places like gas stations where they will play the same role on a wider basis.

The next logical step for them is to create a home version of the device that will allow people to assess gold at home and use its value even as it is stored safely at home.

All of these steps will basically change gold from dead metal lying in safes, to a dynamic store of value that can be used to conduct transactions on a fast Blockchain, use as a hedging tool to reduce risks, bridge the gap between fiat and cryptocurrencies – but most importantly be used for peer-to-peer lending.

In that sense GoldMint is liquid gold.

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

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Why Proof of Stake Is Power of Saving

In a proof of work (PoW) system, a reward is given for undertaking complex computational work involving solving problems. This exercise is termed mining and people who undertake this work are called miners. Miners compete with each other to find solutions to problems and are rewarded whenever they are able to do so first.

In theory, this is a wonderful principle but it requires complex hardware and a lot of electricity to run this hardware.

On the other hand in a proof of stake (PoS) system, the creator of each block is determined by the wealth it holds, there are no rewards involved, so the miners get the transaction fee.

The cost-effectiveness of PoS is immense compared with PoW.

GoldMint is a platform that operates a Blockchain based cryptoasset called GOLD and they deploy a proof of stake system unlike proof of work, which is used by some other Blockchains like Bitcoin. GoldMint has taken an innovative approach to handling a precious commodity.

Cointelegraph has already written in detail about their Custody Bot apparatus that will help in the transfer of gold to Blockchain.

As Dmitry Pluschevsky, Founder, CEO GoldMint explains the rationale behind picking PoS:

“The most important thing is the speed of transactions as well as low producing costs for miners owning MNT. With PoS they don’t need to buy expensive hardware neither to pay a lot for the electricity. Due to these benefits, the attraction to the GoldMint Blockchain for miners will increase.  In other words, PoS is faster and more economical than PoW, as it reduces energy costs and makes it possible to mine using an ordinary laptop.”

PoS + Graphene = Friends

There are reasons why proof of stake models are becoming more commonplace. It is already being used in Blockchains such as Graphene which include Steem/Steemit/GOLOS social networks, NXT (Including Waves) etc.

Ethereum too is planning a move to PoS, all of which are indicators that PoS is mature and production ready.  

There are also other cryptocurrencies that are trying a hybrid approach which combines PoS + PoW, Steem being one of them. GoldMint has chosen the Graphene Blockchain.

Dmitry Pluschevsky tells us the reason for making this particular choice:

“Implementing PoS “from scratch” can be very difficult and time-consuming. That is why GoldMint has chosen Graphene as a basis for its Blockchain. Graphene is a time-proven solution and has a large community of developers.”

How can you get MNT and GOLD tokens?

In order to get hold of GoldMint’s MNT and Gold tokens, you won’t have to wait very long since their crowdsale is all set to begin in just two weeks on Sept. 20, 2017, the successful pre-ICO in June 2017 has already raised over $600,000 in less than 36 hours.

The token on sale is called MNT and it is a precursor to the token GOLD, whose value would be based on its namesake precious metal. MNT is an ‘internal token’ and is used to confirm GOLD cryptoasset transactions, and there is a maximum cap of 10 mln MNT tokens that will exist. This is in line with the PoS concept that the number of coins usually stay fixed.

So how do both of GoldMint’s currencies work? Investors who participate in the crowdsale will be receiving MNT.

Revealing the benefits the holders of MNT tokens would be able to reap, Pluschevsky tells us:

“The relation between GOLD and MNT is for now only related to the miners operations.  Cause Miners (who own MNT tokens) will earn as much as 75 percent in GOLD commissions for validated transactions.”

GOLD can be purchased at the moment with fiat currencies like the US dollar. In the future when GOLD is listed on exchanges, users will be able to buy it with major cryptocurrencies including MNT. GoldMint guarantees Gold cryptoassets buyback for fiat according to the principle:

The buyback price for one GOLD equals one ounce of gold of 999 quality on the LBMA + Q%. GoldMint will be updating prices in real time on its site. In case money is accessed by MasterCard/VISA credit cards or PayPal, standard commissions of these payment systems are charged.

The redemption of GOLD leads to burning of corresponding units after they are transferred from a GoldMint wallet to a special GoldMint account. The equivalent amount in fiat currency is then transferred to the client.

What is good for miners is good for the environment

The choice of proof of stake model is good for another reason as well. Proof of stake involves using far less electricity than proof of work.

Medium estimated that the entire Bitcoin network (PoW) would consume 835.4 kilowatts or 7.31 gigawatt-hours per year, which is about the yearly consumption of 674.5 American homes.

Talking to us about the environmental consequences of mining Pluschevsky explains:

“Nowadays Blockchain industry is spending no less than 0.3 percent of all electrical PoWer on mining. Therefore it is accordingly responsible for the proportional amount of harmful atmosphere pollution.

It is unacceptable for electronic technology of the XXI century. Therefore, changing for PoS is inevitable and we in GoldMint will try our best to facilitate this process.”

An innovative approach backed by solid experience

The idea of using PoS will also lead to more opportunities for holders of MNT tokens to capitalize on gold transactions.

Pluschevsky during his stint at LOT-ZOLOTO already helped pawn shops in Russia convert 450 kg of 595-carat gold a month and delivered a revenue stream of ₽500 mln per month.

His experience with LOT-ZOLOTO and relationships with the pawnshop industry in Russia can help GoldMint turn Gold into a hedgeable and easily transferable commodity.

Their technical approach of using a future ready PoS model thus fits in nicely and makes sense to both investors and future users of GoldMint.

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.