íàçâàíèå

Diamond-Backed StableCoin CEO Talks Blockchain For Storing Value

Diamond-Backed StableCoin CEO Talks Blockchain For Storing Value

Bitcoinist spoke with Jeremy Dahan, founder and CEO of diamDexx, a diamond-backed stablecoin that promises to make cryptocurrencies more practical for everyday use.

In the decade since the 2008 financial crisis, the monetary system has changed tremendously. Once unshakable pillars of the industry no longer exist, and new financial instruments, like digital currencies, have become more accessible.

At its peak, Bitcoin and hundreds of other digital currencies achieved a market cap of nearly $800 billion. But despite a well-publicized price drop, these tokens continue to be popular investment vehicles in the digital age.

Of course, that doesnt mean that they are fulfilling their purpose. Bitcoin was initially intended to serve as a borderless, decentralized currency that could facilitate commerce in the digital age. However, its erratic valuations, and broad speculative interest has made it more akin to digital gold than to usable currency.

Consequently, a cadre of asset-backed stablecoins have emerged that combine the functionality of digitization with the reliability of fiat.

While stablecoins can address many of the shortcomings in todays cryptocurrency ecosystem, they have had their own share of problems. This is something that diamDEXX is striving to solve by backing their token with diamond assets and offering convertibility with real diamonds.


Jeremy Dahan is the CEO of diamDEXX, and we had an opportunity to chat with him about the role of blockchain in the future of finance and how asset-backed tokens could make crypto more practical for everyday use.

There is significant debate right now about the role of digital currencies in the economy. To what extent has volatility stifled crypto adoption or made it less likely to be used at checkout?

Volatility has played an essential role in the usability of crypto. Its basically the start of a vicious cycle that impacts cryptocurrency on all fronts from regulations to the ways users interact with it. Companies, on their side, also dont want to use and transact in unregulated assets that are also terribly volatile and can quickly put them in the red. Its just not a wise way to do business.

But volatility is actually whats attracting new users. Its arguably the biggest use-case at the moment with many transactions being to/from exchanges. Why would investors be interested in a stable diamond-backed digital token?

Speculation, as you say, has so far been the main driver of the crypto industry and, just as in today’s financial markets, will always exist. However, if we want to achieve crypto adoption and disrupt the current financial systems, we need to establish cryptocurencies as an everyday solution. For that, we need stability. Investors, can use this kind of currencies to both safeguard their profits and pay for products and services.

The blockchain is quickly catching on as the go-to technology for tracking and conveying financial assets. What makes this technology so beneficial in this regard?

People have always tried to create trusted institutions and to appoint figures of authority to verify that everyone follows the rules of the games we play, whether thats in finance, law, or even actual games.

This has been true digitally as well. With the internet and now the blockchain weve managed to create decentralized, incorruptible ledgers that codify and embed our rules into a trustless system, and I think thats extremely valuable.

At the end of the day, code cant be bribed and doesnt make emotional decisions. It just does what its supposed to do, and anyone with the necessary knowledge can verify its integrity or point out flaws on it.

For those just becoming familiar with the idea of using digital tokens to store physical value, whats the most significant benefit of tokenization?

Tokenization is not a new concept. Public companies have been doing it for ages in the form of shares and stocks. However, the blockchain has drastically changed the game by giving everyone the power to access these financial tools without having to go through the hoops imposed by traditional financial institutions.

In many ways, youre now able to act and profit like a Fortune 500 company from your living room if you have something of value to offer to the world.

There are many so-called stablecoins coming to market that offer similar solutions to cryptos well-documented volatility. What makes diamDEXXs diamond-backed solution superior to the efforts of these other platforms?

The very first thing that sets the DIAM ‘Coinsistent’ apart from its competitors is token-to-stone redeemability. Thanks to this feature, DIAM users can obtain physical diamonds from their tokens worth of cryptocurrency. They can either receive a shipment or delegate these diamonds custody.

Thanks to this, were digitalizing, liquidizing, and ultimately creating the ultimate store of value. Its also important that users take a look at diamonds as asset classes and realize their true value. Basically, were talking about the most crisis-resistant, best-performing asset of the last decades.

Saying something is ‘backed’ by an asset is a bit inaccurate. One must trust a third-party to actually deliver the asset if the user wants to claim it just like it used to be with gold-backed paper money.

Since our coin will also be listed on exchanges, it is on our best interest to create as many incentives as possible for people to hold and redeem DIAM. Our partnership with IDEX, a world leader in online diamond trading, has allowed us to create a platform where users can obtain diamonds directly from 8,000 manufacturers, saving them money by avoiding intermediaries’ commissions and cuts. IDEX is also our monthly auditor, which means we have yet another incentive to honor our commitment to transparency.

How can asset-backed tokens overcome the transparency problem that has plagued so many other platforms?

Precisely by providing transparency. Users should be very wary of anyone not wanting to comply with audits, documents, and proof of funds. The Internet, scanners, the blockchain, the cloud, and many more tools are there to make this easier than ever. Those who wont comply with minimum requirements, Im afraid, have something to hide.

IDEX is a fully regulated and reputable company, and it oversees the auditing of our diamond vaults. Every month, our stock reserves’ value is being audited, with reports publicly available on our website.

What implications might that have for the broad crypto ecosystem? And to the economy itself?

The right asset-backed token might be a groundbreaker for the overall economy and for crypto. For the first time, we would be facing something thats more valuable than fiat currency, both in the fundamental, ideological, and financial way.

What happens if such an asset is created? Only time would tell, but in my mind that can only mean that our competitors (even if those are government themselves) either try to shut us down or try to catch up to the trend. Eventually, great technology always wins.

Whats the point of using a blockchain (if it doesn’t remove trust) when one can simply ‘tokenize’ an asset using a centralized database?

A blockchain, of course, keeps a public track of every transaction, making the issuing, handling and burning of tokens transparent. It’s also reliant on Ethereum, a platform which users trust and know. On a centralized database, this level of transparency can’t exist.

Why is a native token needed? A sidechain like Liquid, for example, can harness the immutability and decentralization of Bitcoin. Why use less secure blockchains that are prone to 51% attacks and other vulnerabilities.

Our project relies on the fact that the dollar value of the diamonds in our vaults perfectly matches the amount of tokens to issue. Without a native token, the smart contract that regulates both the vaults and the amount of tokens cannot perform it’s functions, and we can’t ensure the consistency of our currency.

Having an ERC-20 token, on another hand, protects us from 51% attacks, since the Ethereum blockchain is strong enough to prevent these attacks.

The post Diamond-Backed StableCoin CEO Talks Blockchain For Storing Value appeared first on Bitcoinist.com.

06.06.2019 / 18:30 49
Bank of Russia: We are Opposed to Crypto, But May Consider Gold-Backed Digi-Asset Bank of Russia: We are Opposed to
According to local news publication TASS, the Bank of Russia will consider a gold-backed digital currency for use in international settlements.
diamDEXX Lets You Buy Physical Diamonds with Crypto diamDEXX Lets You Buy Physical Diamonds
Although the cryptocurrency markets are significantly less volatile than they once were, volatility is still a major issue for investors. This is
Gold-Backed Stablecoin Makes List of Best Investment Advice Gold-Backed Stablecoin Makes List of
Cryptocurrency, Stablecoins–The last two weeks have been a tumultuous time for cryptocurrency investors and advocates, who have watched the market
Ethereum Stablecoin Will Migrate to Upgraded Bitcoin Cash Network Ethereum Stablecoin Will Migrate to
DiamCoin, not to be confused with Diamco.in, a similar token by different folks, is intended to be a version of a stablecoin that is pegged to the
New Zealand Fiat-Backed Stablecoin to Make a Comeback in 2019 New Zealand Fiat-Backed Stablecoin to
The New Zealand Dollar pegged virtual currency would return in the first quarter of 2019 after its suspension last year. New Zealand Stablecoin to
Circle’s CEO Allaire: Every World Currency Will Soon Have a Digital Version Circle’s CEO Allaire: Every World
The CEO of fintech firm Circle claims that every world currency will one day have their own digital version. Jeremy Allaire spoke to CNBC in an
Comments (0)
Add a comment
Comment on