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What is Pax Gold or PAXG? Pax Gold (PAXG) is a digital currency backed by physical gold. This ERC-20 token was launched by Paxos in September 2019 and operates on the Ethereum blockchain. According to the announcement provided by Paxos, each PAXG token that is sold is equivalent to one ounce of gold kept in Brink’s vaults. Therefore, buyers of PAXG actually become owners of the equivalent amount of gold in this treasury. Each PAXG token is equivalent to one ounce of gold (about 31.5 grams) and its main purpose is to facilitate gold transactions among the general public.
Currently, many investors use gold as a store of value to preserve the value of their assets. But the physical purchase and storage of this precious metal comes with problems, including restrictions on buying and selling and transportation problems. For this reason, Pexos has introduced a gold-backed digital asset to give people easy exposure to the gold market. The main goals of this project are:
Providing the possibility of buying and selling gold without restrictions using the PAXG token
Integrating blockchain security and transparency with the gold trading market
Employment of traditional investors of the gold market to the blockchain and cryptocurrencies market
Encouraging investors to enter the blockchain and cryptocurrencies market
The cryptocurrency market has high ease and liquidity, which allows investors to trade easily and without any time limit. On the other hand, the gold market is not active 24 hours a day, 7 days a week. But the PAXG token allows people to trade gold easily and without any time limit.
One of the problems of gold buyers is the issue of transportation and storage, which becomes more difficult with the increase in the amount of gold purchased. But by using PAXG token, this problem is completely solved and people can easily store and carry PAXG token in their digital wallet without any worries.
Buying and selling gold may involve risks, including the possibility of fraud by the seller. But in case of using PAXG token, each token is equivalent to one ounce of gold, this possibility is minimized and traders can trade PAXG token with peace of mind.
Physical gold, by its nature, cannot be divided into components, and even if it is possible, it must be done according to specified standards. For this reason, to buy gold, the investor needs to have a certain minimum budget. But buying Pax Gold allows you to buy from a very small amount, like 0.01 Pax Gold, to higher amounts (no limit).
Keeping an asset safe is the main priority of every investor. As a precious metal, gold has faced dangers over the years, from fraudulent practices to armed robberies. But with the advent of blockchain and the anonymity of people, this problem has been solved to a large extent. Today, you can store this digital gold in your wallet without any worries by buying Pax Gold token. However, you should note that the security of your digital assets is completely dependent on the security of your wallet’s private key. Losing this key means losing your property.
The fee structure for issuing and redeeming Pax Gold tokens is very competitive. In the Pexos wallet, the Ethereum chain transaction fee is 0.2% and the storage fee is zero. But like other ERC-20 tokens, Ethereum Gas fees apply to on-chain transactions. On the other hand, the transaction fee for physical gold is around 7%, which sometimes reduces the profit of physical gold transactions drastically with the deduction of tax.
One of the things that should be considered when investing and buying Pax Gold is the price and future of this digital currency. Because the value of Pax Gold is somehow tied to gold, the fluctuations of the gold market play an important role in the future of this currency. Factors that can affect the future of Pax Gold include wars, economic confrontations, people’s demand to buy gold, uncertain economic conditions, health crises, etc. Therefore, it is somewhat difficult to predict the price and future of Pax Gold. According to the inflationary conditions of the world economy, some experts predict a growing trend for the price of gold and Pax Gold in the coming years.
