A few days ago I wrote an article called "How to escape the winter (Part 3)" (feel free to check it out.) and in it I looked at how backed crypto currencies can offer a form of shelter to the winter. But, towards the end I began to realise something. If you bought GBPT (Pound Token) then it would have the same effect as buying GBP. Why would you just buy GBPT and not GBP an obviously more risky choice? And if they had the same effect then was GBPT really a crypto at all?
The definition of a crypto currency, as by Oxford is "a digital currency in which transactions are verified and records maintained by a decentralized system using cryptography, rather than by a centralized authority." This just blurs the line even more.
For example, KuCoin uses peer-to-peer trading rather than having to wait for it to be recorded on the block chain. Does this make KuCoin the middle man that crypto is trying to remove?
Its the same with gold backed crypto like that of PAXG. Is it really crypto or a digital IOU?
There are hundreds of other backed cryptos out there but until the definition of a crypto currency gets changed it may be up to you to decide.
QUICK DISCLAIMER!!!
This was not intended to be investment advice! This article was written by an incompetent fool who has no idea what they are writing about. Please always do your own research and double check all the facts you read about.
