Digix is a digital marketplace for gold bullion. Each Digix asset is supported by a bullion bar sitting in the custodian vaults of Digix, Singapore. The marketplace is leveraged by Distributed Leverage Technology. It relies on the users of the Digix market network to confirm the transactions in the distributed system. The blockchain of information is transparently stored on every computer in the distributed network as there is no centralized server or control in the Digix network. Each node acts as an independent transaction terminal.
Digix Technology Works On Ethereum
Ethereum is a blockchain based distributed computing system, powered by open source technology which provides an intelligent virtual machine called Ethereum Virtual Machine. When we say distributed computer system, there is no centralized control of the network, like a server as in traditional networks. You must have heard about cryptocurrencies like Bitcoin, which are a digital replacement for paper currencies. Ethereum provides one such cryptocurrency called ‘Ether’.
In fact, Ethereum was initially suggested by a bitcoin programmer who thought the bitcoin system was specific to a scripting language, and he wanted to introduce a more common scripting language. This digital currency can be transferred from one account to another account like normal cash. But as always, the security and scalability of cryptocurrencies were under suspicion.
Digix Global Creators
Digix Global is the company that introduced the digital cryptocurrency known as Digix. DigixGlobal is the first company built on the Ethereum virtual network that tokenizes gold onto the Ethereum blockchain.
They tokenize 99.99% London Bullion Market Association (LBMA) approved Gold bars through a protocol called Proof of Asset (PoAs).
How Do Digix Tokens Work
Digix DAO is the first major Ethereum based ‘Distributed Autonomous Organization’. There are two types of tokens in DigixDAO and both are live. Digix tokens or Digix assets are traded but not in the Digix system. They are traded in other p2p exchange platforms, such as EtherEx.
DGX is a token backed by physical gold. This is owned by DigixDAO. 1 DGX is equivalent to 1 gram of gold, and you can transact or redeem DGX if you possess them. You can redeem them for the equivalent gold through DigixGlobal, which is a certified gold bullion dealer. Your DGX is backed by an equal amount of gold in Digix’s vault in Singapore. This is similar to the governments reserve equivalent gold when they print currency. Each Ethereum transaction using DGX will cost you a 0.13% transaction fee, capped at 0.0013 DGX. This is the revenue source for DigixDAO.
DGD is another token owned by DigixDAO. You can submit your DGD tokens to a smart contract quarterly and get a passive income of X/2,000,000 of the transaction fee where X is the number of DGD tokens you own. The reward will be given as DGX tokens, which can be redeemed against gold.
- If the distributed system on which Digix work fails due to any reason, the balance of DGX will be re-issued
- Can be converted to gold at any point in time
- Safe way to secure your assets in a safe vault in Singapore
- Quick purchase of digital gold
Digix Global Conclusion
In the near future, the world economy will change to a cashless digital economy with different digital currencies like Bit Coins, Digix, and many more. Bitcoin was the first successfully launched cryptocurrency, which introduced the concept of integrating a timestamp and some other transaction details in the currency and implemented a distributed ledger. But the power of Digix is that it’s the only cryptocurrency supported by a physical asset like gold which can be redeemed at any time. Many countries in the world have already accepted cryptocurrency as a valid medium of financial transactions.
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