So the first thing to mention is that Goldchip Investments is a legit gold mining company that is already mining gold in Zimbabwe. The company was awarded by the Zimbabwe Investment Authority as a runner up in the mining sector at the 2016 Investor Awards. This is of course important to mention because the cryptocurrency space is full of a lot of get rich quick schemes and accompanying con theatrics.
Second thing to mention is that I am not an investment nor financial nor technology expert. I am not an expert on anything period. This is important to mention because you need to make your own decisions about these things and consider your own advisors. Be careful though because cryptocurrencies are a new thing and hence ‘expert advisors’ may not be expert advisors at all.
With that out of the way, let me tell you about the Goldchip Mining Asset (GMA).
Simply put the GMA is a digital asset backed by the most trusted physical asset: gold. GMA is a cryptocurrency token just like bitcoin. This token will be issued soon by the mining company, Goldchip Investments.
Who are these guys?
Goldchip Investments have a gold mine and claims in the gold rich vicinity of Chakari (close to Chegutu). They have been mining the precious metal since 2014.
So why are they doing an ICO?
Just in case you are embarrassed to ask: ICO stands for Initial Coin Offering. This is how new cryptocurrencies come to life. This is quite similar to how a business gets to list on the stock exchange through an Initial Public Offering (IPO). As with an IPO, the cryptocurrency is first sold to larger investors before it can be acquired by the general public.
Goldchip are doing an ICO so they can raise funds to expand their operations and increase their current gold mining capacity. Generally ICO’s make it easier to raise funds than alternate routes for example listing.
Why would a person buy this GMA token?
Buying the token means you’re kind of investing in gold indirectly. Holders of the token will get a 5% royalty every quarter from the Goldchip Investments profits for that respective quarter.
What can we compare this to?
The best comparison for this token in the non crypto world is a redeemable preference share.
I’m glad you asked: Reddemable preference shares are shares that you buy to finance a company and in return the company will give an agreed portion of their profits at agreed intervals (yearly, quarterly…) as long as you hold these shares. The company reserves the right to buy back these shares from you in the future.
This is very similar to what the GMA token affords you. Goldchip also reserves the right to buy back the tokens at the market value within 8 years of the ICO.
What currency will they pay the royalty in?
The royalty will be paid out in Ether (the Ethereum cryptocurrency). Etherhas the second highest market capitalisation in the world after bitcoin. It is currently the second most popular token after bitcoin.
This is good for investors
Paying out in ether is good for investors especially external investors because this allows them to access proceeds from their investment much easier and to transfer that money outside Zimbabwe. We all know that moving money is not so easy in Zimbabwe right now and the last thing you want is to receive your money into a local bank account.
This is good for the government
No fiat currency whether it’s the bond note or the US dollar will leave the Zimbabwean market. Goldchip are currently selling their gold output to Fidelity Printers and they promise to continue doing so. Obviously because this is the law.
Investors get their money in digital currency and thus there is no remittance of money at least money as our government understand it outside the country.
When can you buy the GMA token?
The public ICO will start early June. Right now the token is being sold privately mainly to large investors.
This could be confusing…
I know this could be a little too much to process if you are not too conversant with cryptocurrencies and the blockchain in general. I don’t expect this to be the only time we talk about Goldchip Investments and their coming cryptocurrency so hang in there…
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Anything with “Crypto-currency” is not good for anyone.
Look at the energy wasted to mine 1 BC.
We are very close to an age of Bitcoin Global warming. Wait, the age is here.
Then we have an imaginary currency with a value that is also imaginary and only backed by Celebrity endorsements.
With Bitcoin’s instability, it’s a bad gamble to invest in. The crypto-currency model is – Give us your real money that you can use anywhere and instead, take this fake money ( sound familiar? Bond notes) that you can’t use anywhere.
We now have Bitcoin, Biitcoin, BarberCoin ( yes, to pay your barber), OneCoin, plus 100 others. This is bad. Fragmentation is never healthy.
Gold is one. Gold is tested. Gold is thousands of years old. Gold’s value doesn’t drop from $20,000 to $7,000 for no reason. Nobody gets scammed out of $90 million worth of gold everyday.
Crypto-currency is the new big scam and ib a few years it is going to crash and burn.
It’l be fun to watch where this goes.
*said by a gold miner, economist and tech-preneur.
To be honest I don’t know if cryptocurrencies will exist. I usually say that. What I am confident in is the blockchain as a technology. Now that is a game changer
I think asset backed coins also have a chance because they are just the digital equivalence of share certificates, I O U certificates etc based on the blockchain
Mr. Chigwada,
I disagree with your position and claims.
You begin your premise by generalizing that “Anything with “Crypto-currency is not good for anyone”. The example you point out “Look at the energy wasted to mine 1 BC” is an unsupported position with no research cited to support your claim. How does one know that what you are claiming is accurate or inaccurate?
I will make my own claims by stating and citing the following:
1. Crypto-currency is good for some people because it has created many jobs in the marketplace. (Forbes, How Cryptocurrency Has Introduced New Careers In Tech, Dec, 18, 2017) . For example, Goldchip/Goldma (in business four years) currently employs 70 Zimbabweans based on gold mining and Goldchip’s vision of introducing the GMA token as a cryptocurrency into Zimbabwe’s marketplace. Is it your contention that employing local Zimbabweans – not good for any of them and their families?
2. There is absolutely no relationship between mining Bitcoin and the utilization of the GMA token(cryptocurrency.) When you cite bitcoin in relationship to this article , it exposes your uniformed position regarding how the GMA token works. The GMA token (as it states on Goldma.io) is based on the Waves platform not Bitcoin. (Waves Platform, wavesplatform.com ,2018)
3. You also state :“Then we have an imaginary currency with a value that is also imaginary and only backed by Celebrity endorsements.” We have no celebrity endorsements, and the value we cite is based on Value based pricing principles. (Wikipedia, Value-based-pricing, 4 April, 2018)
4. You also claim, “With Bitcoin’s instability, it’s a bad gamble to invest in.” For me, bitcoin has been a great investment. My return on investment has been phenomenal. If you, Mr. Chigwada would have invested a mere $1,000 back in Feb, 2012 (Like I did). You would be a millionaire. (https://www.cryptoground.com/what-if, 2018)
5. Finally, you state, “Gold’s value doesn’t drop from $20,000 to $7,000 for no reason. Nobody gets scammed out of $90 million worth of gold everyday. Crypto-currency is the new big scam and in a few years it is going to crash and burn.” I agree gold has proven to be a great store of value. However, you infer that the market price of Bitcoin drops for no reason. May I enlighten you that all things are subject to the law of cause and effect. I also challenge you to present evidence of $90 million dollars scammed ‘everyday’ as it relates to cryptocurrency.
Mr. Chigwada, I submit to you that it is ‘Blockchain technology’ that gave birth to cryptocurrency, among other innovative, beneficial tools for individuals, businesses and governments. (https://usethebitcoin.com/4-blockchain-technology-benefits-apart-cryptocurrencies/, Jan 2018)
So, if you looked/researched beyond your subjective viewpoint regarding cryptocurrency, you could possibly envision the benefits of Blockchain technology and how it has enhanced countries like Estonia among other countries. (https://boatscoin.com/estonia-cryptocurrency-case-study/, Mar 2018)
*said by a gold mining CEO, registered investor in Zimbabwe, Cryptocurrency launcher and tech-preneur
I like the time you spent to respond to me, but you need to dig deeper.
Find out why Google distanced themselves from Crypto-currency, then maybe we can talk my friend.
Really “Find out why google distanced themselves from crypto currency” so that’s actually an argument smh. .
Thank you for the disclaimer in the article that I have been advocating for a long time… Note it does not seem biased… Generally agree with van… And you tinashe…. The block chain is the technology but being paid in ether is substituting one bond for another
I share the same guarded outlook on cryptos but not really because they are representative of assets and not assets themselves.
First off: the paper currency we use initially was just a receipt representing gold deposited somewhere. They started printing more of it (yes the USD) than the gold actually available and in the late 60’s into the early 70’s the world economy was on the brink of collapse when European countries led by France started returning the USD (receipts) to the USA and demanding their gold back. As these requests were honoured more requests were made and the whole thing was gonna tank because there just wasn’t the gold enough.
The solution: the USD and basically every currency on the planet was turned into fiat. Instead of it being a receipt that represented ownership of a real asset: gold, the USD and all paper money became just paper. It derives its value from ‘faith in the US government’ that it honours its debts and that it will remain in perpetuity. Unfortunately fiat currencies have a nasty history. From the BC days to date, no fiat has withstood time.
Why? Fiat can just be printed and thus reduce in value. This is and has been happening. In the US, $20 could fill up your shopping trolley in 1998. 20 years later, it buys a handful of items. After the global financial crisis of 2008, the US bankers (banking is not equal to government contrary to what we think) went on a printing spree which they called quantitative easing.
So in all essence the USD is more of a bond note than a gold based crypto is don’t you think? It is fiat that is not backed by anything.
However, even the gold based crypto is a risk primarily because we don’t know which way regulation will go. The idea of GMA itself is very sound. More sound than the USD but that may not be enough….
Tinashe, you lied.
You said you aren’t an economist then proceed to detail exactly how money works.
This is a nice and in-depth comment.
Also, you confirm that Gold backed Ether is better than non-backed Cryptos right?
Van Lee amana…
No I am not an economist for real.
Yes, I think gold backed ether is better than non backed cryptos but this is strictly my opinion
Finally the disclaimer in bitcoin is clear. Well done… But I got to agree with van one bond for another bond
I share the same guarded outlook on cryptos but not really because they are representative of assets and not assets themselves.
First off: the paper currency we use initially was just a receipt representing gold deposited somewhere. They started printing more of it (yes the USD) than the gold actually available and in the late 60’s into the early 70’s the world economy was on the brink of collapse when European countries led by France started returning the USD (receipts) to the USA and demanding their gold back. As these requests were honoured more requests were made and the whole thing was gonna tank because there just wasn’t the gold enough.
The solution: the USD and basically every currency on the planet was turned into fiat. Instead of it being a receipt that represented ownership of a real asset: gold, the USD and all paper money became just paper. It derives its value from ‘faith in the US government’ that it honours its debts and that it will remain in perpetuity. Unfortunately fiat currencies have a nasty history. From the BC days to date, no fiat has withstood time.
Why? Fiat can just be printed and thus reduce in value. This is and has been happening. In the US, $20 could fill up your shopping trolley in 1998. 20 years later, it buys a handful of items. After the global financial crisis of 2008, the US bankers (banking is not equal to government contrary to what we think) went on a printing spree which they called quantitative easing.
So in all essence the USD is more of a bond note than a gold based crypto is don’t you think? It is fiat that is not backed by anything.
However, even the gold based crypto is a risk primarily because we don’t know which way regulation will go. The idea of GMA itself is very sound. More sound than the USD but that may not be enough….