Physical gold has long been valued as an asset and a hedge against economic instability, while paper gold creates misconceptions about its true value.
Advantages of Physical Gold
Gold is a reliable asset and hedge against inflation. Unlike many other assets, physical gold cannot be easily counterfeited. It retains its value over centuries, and its scarcity makes it resilient against price manipulation.
History of the Gold Standard
The gold standard began to lose relevance with various economic measures, such as President Roosevelt's order in 1933, which led to significant changes in the US currency system and worldwide. The Bretton Woods system established in 1944 laid the groundwork for the dollar to serve as the world's reserve currency.
Issues with Paper Gold and the Advantages of Tokenization
While paper gold offers liquidity and access, it has its disadvantages, including counterparty risk and lack of physical ownership. Meanwhile, tokenization of physical assets like gold could bring transparency and improved liquidity to the market.
Physical gold remains an important asset for investors, but the rising popularity of tokenization may offer new solutions to old challenges.
