GoldFinX: Can a Fintech Change the Fortunes of Artisanal Gold Mining?
If you consider yourself an Economy and Technology enthusiast just like me, surely you have noticed how in all sorts of media outlets there has been a recurring subject on display, and coincidently, one that has also been present since at least the Bronze Age: Gold.
I find it fascinating how in spite of constant technological advances, the prominence of oil, and other financial alternatives, gold continues to be a fundamental basis for the prosperity of nations worldwide. Sure, there is a logical explanation for this. After the emergence of the fiat monetary system and numerous crises throughout history, gold has been proven to be the perfect hedge. Think about it: a precious non-corrosive metal that has been linked to both the celestial and terrestrial dimensions since the ancient times.
Whatever virtues you associate gold with, whether it's respect, devotion, or power, its value perceived value is indisputable. And still, the current pace of life and the benefits of modernity have allowed us to take it for granted, and simultaneously ignoring the industry behind it. And no, I'm not talking about big mining corporations.
According to the World Gold Council, amid energy and food crises and huge unemployment rates, artisanal gold mining is directly responsible for the economy of more than 100 million people -generating at least USD 171 billion a year.
Unfortunately, there is darker side to this data: on the one hand, a handful of large players in the industry are currently threatening to end artisanal activity. Meanwhile, on its own, artisanal practices seem to be doomed due to the elevated pollution rates it creates. Processes such as deforestation, chemical purification methods that contaminate land and water, and unhealthy general working conditions all generate potentially fatal consequences for the workers' health.
Such a scenario creates a dilemma: Should the artisanal mining industry be rescued? Or, on the contrary, is it time to aim to modern alternatives by large corporations? Surprisingly, the solution to this question could fall somewhere in between.
A new gold mining standard
After investigating the subject in depth, I found numerous articles with thought-provoking headlines. It wasn’t long until I stumbled upon an interesting project that attempts to combine a decentralized financing strategy with a protected-value digital coin.
The Atlas Group of Companies, a private equity firm founded in the '90s with a presence in the main global markets, had recently launched a Protected Coin Offering (PCO) by the name of GoldFinX.
The purpose of this ambitious project is to raise funds with the intent to turn artisanal gold mining into a clean and extremely profitable activity, increasing its viability by using up-to-date mining tools while guaranteeing the subsistence of all the people involved within this troubled industry. But, in exchange for what? GoldFinX will receive a percentage of the collected gold for the life of the gold mine, and this gold will act as protection for the value of its digital coin, GiX, bought by both institutional and retail investors.
With my skepticism intact, but determined to continue to find out more, I dug a little deeper with my research. It turns out that media outlets like Financial News Today have been reporting on a novel movement within the cryptocurrency market. It seems an innovative new-generation digital asset, unlike conventional Utility and Security tokens, has figured out a way to combine the benefits of a high-growth, freely-tradable digital coin with the guarantees usually associated with asset-backed coins. In theory, this Protected Coin shouldn’t suffer from wild price fluctuations like most cryptocurrencies.
And GoldFinX is leading the charge. Armed by a creative business plan, the accumulating Gold reserve in the Swiss vaults will be documented by supply-chain blockchain technology, and in so doing will also be able to validate the origin of the Gold. This latter point is not an insignificant one, and is a huge problem in the artisanal gold mining world.
In short, this is an eloquent solution that would not only solve the problem regarding funding, a huge disadvantage compared to the initiatives of large mining companies, but also implies that ordinary people can participate in the investment process and benefit from "the currency of the future."
The faces behind the project
Executives Jean-Michel Alfieri and Philippe Bednarek are the individuals behind the execution of the GoldFinX business model. They believe that the economy and its fundamental growth drivers have remained static for the average retail investor, and that in fact it is possible to create hybrid models that democratize financial privileges - which in the long run signifies a positive impact on societies around the world.
"Everyone in the blockchain ecosystem is interested in maintaining top security, and new creative solutions in all aspects of the business are emerging as a result," said the CEO Philippe Bednarek to Forbes.
Additionally, I had the opportunity to briefly interview both leaders exclusively to help me draw my own conclusions:
What made you interested in artisanal gold mining?
PB: Ever since we founded the Atlas Group of Companies in 1994, our intention was always to not only give a preference to those projects aimed at bringing financial value to the economy but to society in general. At the same time, during the last 25 years, we have also been part of the ups and downs of the gold mining industry on different occasions, and have seen firsthand the devastation created by artisanal practices for the sake of survival, especially for those depending on its existence. It wasn't until the arrival of the blockchain technology and the decentralized market that we saw a real opportunity to make a change. We finally had an opportunity to raise funds for an industry that can never seem to catch a break. For me, GoldfinX is hope, philanthropy, profitability, all wrapped up in one project.
Why make GoldfinX a Protected Coin Offering?
JMA: First of all, we are firm believers in the benefits of the blockchain, beyond the superficial concept of a "hyperinflated cryptocurrency." The technology it's based on is fascinating. Coin Offerings are nowadays one of the most effective methods to collect funds because it is not overly regulated operation, and the projects base on sound business models can offer high growth success for the investor. However, we are not pursuing the traditional ICO (Initial Coin Offering) anymore. GoldFinX will have its own category as a Protected Coin Offering (PCO). That way we can provide even more safeties, protecting the coin holder's investment with the accumulated gold in Swiss vaults in the case of a global regulatory crackdown or other unforeseen event. Imagine having access to a digital coin that offers the best of the Utility and Security market segment. We believe we found the holy grail model of the cryptocurrency world, and we’re steadfastly in the process of implementing it down to the very last detail.
Could you explain a bit about the plan behind GoldFinX?
PB: We have just finishing the last stages of our pre-sale phase (June 30, 2019), which means a new phase will begin soon. We plan to raise 250 million Euros and it will go towards funding 15 high-potential artisanal mines located in more than a dozen countries. The great thing about our model is that its totally scalable according to the proportion of funds coming in. It really is the Uber of Gold mine financing. GolfFinX is a platform joining two worlds, the retail investor with small gold mining operations, and bringing them together in ways totally unthinkable in the not so distant past. We really think everyone, from crypto enthusiasts to institutional and retail investors, will recognize what an incredible opportunity this is and come along for the ride. We are now in the last stage of our private sale phase, and the GiX, our crypto coin will be available to the public in July 2019.
To answer the question posited in the main title of this article, in theory, I believe GoldfinX has all the characteristics to become a breakthrough venture that stands out among the crowded digital currency offers and blockchain projects. Those who have been have cautious with cryptocurrencies in the past should feel drawn towards this unique proposal based on tangible resources. For the time being, I will continue to monitor the progress of the Fintech and analyze its continued strategy implementation.
For more information about GoldFinX, you can go to their home page: https://goldfinx.com