Investors who hold gold regard it as a safe haven. And when times get tough, they don't sell their gold, they pawn it.
Now a fintech company wants to revitalise pawnbroking by using cryptocurrency to create an international peer-to-peer network backed by gold.
Coin Telegraph reports on GoldMint, the brainchild of Dmitry Plushchevsky, a Russian citizen who has been working with a network of 140 Russian pawnshops since 2015. The technology is intended to address four key challenges faced by pawnbrokers
- realization of unclaimed pledges
- wired payments
- funding of pawnshops via p2p lending
- unified standards (consolidation)
If GoldMint can build a viable solution, the size of the pawnbroking industry means a share of the market is worth pursuing, says Plushchevsky::
“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!”
Is this a crazy idea? It's definitely high risk, but we couldn't tell you how much riskier than putting your money into (say) a craft brewery. As we've said before, it's very important to understand hat it is you end up owning. A stream of revenue from a large peer-to-peer lending network sounds very appealing. But who will be GoldMint's paying customers? Who will own the intellectual property in the technology - the so-called CustodyBot?
The fund-raising will be via an Initial Coin Offering (ICO) which introduces risks of its own. To read a white paper, and have the chance to join a mailing list ahead of the offering, which is due to open on September 20th, go to https://goldmint.io/