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How GoldMint is bringing technology to an old fashioned pawnbroking industry and changing the way we see gold today.
Businesses and ordinary people can suffer from cash crunches, and the need to borrow money may take them to various financial institutions, but it’s not necessarily guaranteed that they’d be able to secure credit when they need it.
It’s therefore no surprise that pawnshops have an important role to play in the daily lives of many individuals and small businesses. You may think that pawnshops have a limited role to play in a modern setting, but you’d be mistaken.
Recently, a Time article revealed that 28 percent of college educated millennials between the ages of 23-55 have accessed short-term lending from pawnshops and payday loan providers in the last five years.
While pawnshops may be catering to an unserved category, they themselves being mostly cash-based businesses have difficulty finding credit for their business needs.
Dmitry Plushchevsky, the co-founder of GoldMint project, has been working on this problem by using a peer-to-peer lending mechanism.
Dmitry has had an eye on the pawnshop segment since 2015, when he noticed that while the pawnshop business was immensely profitable, it was void of technological progress. He worked with a team of four people in 2016 to address the four main issues that faced the pawnshop businesses:
The co-founder of GoldMint worked with a network of 140 pawnshops in Russia to try to solve the challenges facing them.
As an example, for addressing unclaimed pledges Dmitry helped build Lot-Zoloto, which became a profitable business with a turnover of nearly US$ 10 mln per month.
In order to bring transparency to the industry, he introduced a specialised pre-paid MasterCard by the name of Bogatstvo, which can be issued by pawnshops and used at any Russian bank ATM without commission.
GoldMint is the next logical step in solving issues related to wired payments and unified standards.
GoldMint is a comprehensive P2P solution that allows businesses like pawnshops to raise credit.
Plushchevsky explains the scale of the problem:
“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!”
These humongous portfolios are themselves what GoldMint aims to transform into a credit raising opportunity.
Barriers like international borders, will dissipate with the ushering in of GoldMint, and people or entities will be able to lend to pawnshops and get returns on their extended loans.
Custody Bot is the solution that GoldMint wants to use, to make sure that the collateral offered by pawnshops can be audited and verified. Custody Bot is a type of safe-like device with a built in spectrometer and hydrostatic balance.
Once the gold is assessed by the Custody Bot, it can be stored safely till the time it is retrieved by the way of a special code unique to each item stored.
The use of Custody Bot makes the whole process not only verifiable, but the device will also be able to relay information through to a Blockchain in a trustworthy manner.
Lenders will profit, either as the owner will reclaim the stored gold in Custody Bot, or in the case of an unclaimed pledge it can be sold off by the pawnshop.
GoldMint is holding an initial coin offering (ICO) in less than a week’s time starting Sept. 20, 2017. They have published a detailed whitepaper which lays the details of their crowdsale.
The token they are offering on sale is called MNT. Out of the 10 mln MNT, seven mln will be on sale in the crowdsale. MNT gives owners an opportunity to generate a ‘regular income’ by offering computing power.
“In the usual proof-of-chain projects, the miner is chosen on a contest basis, so great processing capacity is required. We have a different approach - each owner of MNT tokens is guaranteed to receive commission for the approval of each transaction, according to the number of MNT tokens available in it, as a percentage of the total number.”
In the first half of 2018, GoldMint plans to launch another token by the name of GOLD, which will be tied to the price of its namesake precious metal. MNT Token will provide the right to approve the transactions of these GOLD tokens, and will give the holders the right to receive a reward for doing so.
While MNT will have a transactional nature, GOLD will come in handy to provide liquidity, which can then be sent to various pawnshops.
GoldMint is moving in a direction that will unlock the potential liquidity in Gold, particularly one hidden in unclaimed pledges lying in pawnshops. In the future, GoldMint plans to bring Custody Bots to places like gas stations where they will play the same role on a wider basis.
The next logical step for them is to create a home version of the device that will allow people to assess gold at home and use its value even as it is stored safely at home.
All of these steps will basically change gold from dead metal lying in safes, to a dynamic store of value that can be used to conduct transactions on a fast Blockchain, use as a hedging tool to reduce risks, bridge the gap between fiat and cryptocurrencies - but most importantly be used for peer-to-peer lending.
In that sense GoldMint is liquid gold.
Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.
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