The Advantages of Tokenized Real-World Assets
Zaid Ismail, the COO of Mintlayer, a future-proof blockchain platform, believes that tokenized real-world assets (RWAs) have significant advantages over traditional exchange-traded funds (ETFs). Unlike regular ETFs, trading of tokenized RWAs is not limited to normal working hours, offering 24/7 accessibility. In addition, tokenized RWAs provide improved liquidity, global accessibility, real-time transactions, increased transparency, reduced costs, and direct ownership. These attributes make tokenized RWAs a more versatile and appealing choice for modern investors seeking portfolio diversification.
The Role of Regulation and Traditional Financial Institutions
However, the success of tokenized RWAs relies on global regulatory collaboration and the standardization of rules governing such assets. Traditional financial institutions embracing this new way of handling valuable assets will also be crucial to the success of tokenized RWAs, according to Ismail.
Why Developers Should Consider Building Defi Apps on the Bitcoin Network
In an interview with Bitcoin.com News, Zaid Ismail explains why developers should consider creating decentralized finance (defi) apps on the Bitcoin network. Ismail highlights the advantages of the Bitcoin ecosystem, including its large user base, liquidity, and recognized status. He also emphasizes the decentralized nature of the Bitcoin network, which offers security and trust, and the accessibility to Bitcoin's substantial liquidity pool. Building defi applications on the Bitcoin ecosystem can tap into these advantages, potentially leading to higher adoption rates and greater network effects.
Overcoming Blockchain Challenges for Asset Tokenization
Ismail acknowledges the challenges faced by blockchain infrastructure, such as network congestion, high transaction fees, and the difficulty of running nodes. However, he believes that layer 2 solutions like Mintlayer are changing the landscape and making blockchain ready for the tokenization of real-world assets at scale. Layer 2 solutions address these challenges by offloading transactions and operations from the main chain, reducing congestion and fees. Mintlayer's architecture allows transaction batching, atomic swaps, and lightning network integration, enhancing scalability and throughput. The low node requirements of Mintlayer foster a more inclusive and decentralized network, allowing a wider range of participants to contribute to network security and consensus processes.
The Future of Tokenized RWAs
Tokenized RWAs offer significant advantages over traditional ETFs, but their success depends on global regulatory collaboration, the standardization of rules, and the adoption of traditional financial institutions. With the advancement of layer 2 solutions like Mintlayer, the blockchain infrastructure is becoming ready to handle the tokenization of real-world assets at scale. Developers should consider building defi apps on the Bitcoin ecosystem to tap into its large user base, liquidity, and decentralized nature. The future of tokenized RWAs looks promising, offering modern investors a more versatile and appealing choice for portfolio diversification.
What are your thoughts about this interview? Let us know what you think in the comments section below.
Frequently Asked Questions
How does gold perform as an investment?
The supply and the demand for gold determine how much gold is worth. Interest rates can also affect the gold price.
Due to the limited supply of gold, prices for gold are highly volatile. You must also store physical gold somewhere to avoid the risk of it becoming stale.
How to Open a Precious Metal IRA
First, you must decide if your Individual Retirement Account (IRA) is what you want. To open the account, complete Form 8606. For you to determine the type and eligibility for which IRA, you need Form 5204. You must complete this form within 60 days of opening your account. Once this has been completed, you can begin investing. You can also choose to pay your salary directly by making a payroll deduction.
Complete Form 8903 if your Roth IRA option is chosen. Otherwise, the process will look identical to an existing IRA.
To be eligible for a precious metals IRA, you will need to meet certain requirements. You must be at least 18 years of age and have earned income to qualify for a precious metals IRA. You can't earn more than $110,000 per annum ($220,000 in married filing jointly) for any given tax year. And, you have to make contributions regularly. These rules apply to contributions made directly or through employer sponsorship.
An IRA for precious metals allows you to invest in gold and silver as well as platinum, rhodium, and even platinum. However, you won't be able purchase physical bullion. This means you won't be allowed to trade shares of stock or bonds.
Your precious metals IRA may also be used to invest in precious-metal companies. This option can be provided by some IRA companies.
An IRA is a great way to invest in precious metals. However, there are two important drawbacks. First, they're not as liquid as stocks or bonds. It is therefore harder to sell them when required. Second, they don’t produce dividends like stocks or bonds. So, you'll lose money over time rather than gain it.
Who holds the gold in a gold IRA?
An individual who has gold is considered to be a “form of money” by the IRS and subject to taxation.
You must have gold at least $10,000 and it must be stored for at the least five years in order to take advantage of this tax-free status.
Although gold can help to prevent inflation and price volatility, it's not sensible to have it if it's not going to be used.
If you plan to eventually sell the gold, you'll need a report on its value. This could impact the amount of capital gains taxes your owe if you cash in your investments.
A financial planner or accountant should be consulted to discuss your options.
Are You Ready to Invest in Gold?
The answer depends on how much money you have saved and whether gold was an investment option available when you started saving. You can invest in both options if you aren't sure which option is best for you.
In addition to being a safe investment, gold also offers potential returns. It's a great investment for retirees.
While most investments offer fixed rates of return, gold tends to fluctuate. Its value fluctuates over time.
This doesn't mean that you should not invest in gold. It just means that you need to factor in fluctuations to your overall portfolio.
Another benefit of gold is that it's a tangible asset. Gold is much easier to store than bonds and stocks. It is also easily portable.
You can always access gold as long your place it safe. You don't have to pay storage fees for physical gold.
Investing in gold can help protect against inflation. You can hedge against rising costs by investing in gold, which tends to rise alongside other commodities.
It's also a good idea to have a portion your savings invested in something which isn't losing value. Gold usually rises when the stock market falls.
Another advantage to investing in gold is the ability to sell it whenever you wish. Just like stocks, you can liquidate your position whenever you need cash. You don't even need to wait for your retirement.
If you do decide to invest in gold, make sure to diversify your holdings. Don't place all your eggs in the same basket.
Don't buy too many at once. Start small, buying only a few ounces. You can add more as you need.
Keep in mind that the goal is not to quickly become wealthy. Instead, the goal here is to build enough wealth to not need to rely upon Social Security benefits.
While gold may not be the best investment, it can be a great addition to any retirement plan.
Statistics
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
- Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
External Links
bbb.org
law.cornell.edu
- 7 U.S. Code SS7 – Designation Boards of Trade as Contract Markets
- 26 U.S. Code SS 408 – Individual retirement plans
irs.gov
forbes.com
- Gold IRA: Add Some Sparkle To Your Retirement Nest Egg
- Understanding China's Evergrande Crisis – Forbes Advisor
How To
Guidelines for Gold Roth IRA
The best way to invest for retirement is by starting early. You should start as soon as you are eligible (usually at age 50) and continue saving throughout your career. It's vital to contribute enough money each year to ensure adequate growth on an ongoing basis.
Additionally, tax-free opportunities like a traditional 401k or SEP IRA are available. These savings vehicles permit you to make contributions, but not pay any tax until your earnings are withdrawn. These savings vehicles can be a great option for individuals who don't qualify for employer matching funds.
It is important to save consistently over time. You will lose any potential tax advantages if you don't contribute enough.
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By: Terence Zimwara
Title: Tokenized Real-World Assets (RWAs) Outperform Traditional ETFs, Says Mintlayer COO
Sourced From: news.bitcoin.com/tokenized-real-world-assets-an-appealing-portfolio-diversification-strategy-for-modern-investors-zaid-ismail/
Published Date: Mon, 15 Jan 2024 12:30:29 +0000
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