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AnthemGold simplifies gold trading via the blockchain

Tony Zerucha

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Anthem Blanchard’s experience has him well-prepared to run AnthemGold, a company allowing investors to exchange and electronically buy gold via blockchain technology.

The online retailer of precious metals has long seen the benefit of alternative finance systems for his own company. AnthemGold accepts Bitcoin for payment and also uses Factom as a way to deal directly with his customers while also reducing accounting and banking costs.

Mr. Blanchard operates several successful businesses, yet that didn’t stop mainstream banks from deeming his operation higher risk because it was a designated money services business dealing in international settlements. If there were going to be more cryptocurrency transactions beyond a certain threshold the bank’s risk officer said they needed to charge higher fees.

“If you’re not deemed too risky, it’s a privilege not a right, for a bank gets to decide who opens an account,” Mr. Blanchard said.

That forced him to de-risk that company by spinning out anything related to cryptocurrency into AnthemGold, whose purpose is to create a gold stablecoin pegged to fiat not Bitcoin. In developing the concept, a SWOT analysis revealed many competitors so how would AnthemGold differentiate itself?

Data quality would be the way, and the blockchain would help, Mr. Blanchard said.

“Ultimately you can only trust the numbers and the integrity of the data,” Mr.Blanchard explained. “There’s the immutability of the data…because with a public blockchain consensus is formed among a distributed number of computers.”

The numbers are further verified by an auditor employing GAAP principles, Mr. Blanchard added.

Each coin represents ownership of a piece of an actual gold bar which is secured with multiple identification touchpoints and a class 3 vaulting system. The bars are assayed electromagnetically with a calibrated spectrometer before extensive testing occurs. All results are uploaded to Hercules, a decentralized blockchain protocol platform enabling users to operate a fully functioning supply chain utilizing proof of human work to validate transactions.

That was an important step, Mr. Blanchard said.

“We had to get Hercules up first. Without it there was no differentiation between Anthem and all gold measures. It doesn’t matter who you are. Excel, SAP, software, there’s no data integrity. Zero. There’s no way for one party to know what is being by the other party is true.”

Take Bitcoin, which is based upon the world’s most secure data base, and combine it with Hercules and you are on to something, Mr. Blanchard said. Hercules functions like a Dewey decimal system where data is distributed throughout the network, creating a global supply chain repository which provides a complete list of all trackable assets to anyone with permission access. Factom’s blockchain then serves as a digital notary public by providing a single version of the truth through a decentralized network of authority.

That is a game changer, Mr. Blanchard said.

“The application layer wasn’t secured before Bitcoin. Bitcoin enabled the security and application layers by tying them together – they’re codependent.

“No one is introducing anything not in the fiduciary best interest because they’ll be removed from the process.”

Tony Zerucha

Tony Zerucha is an alternative finance journalist with more than seven years experience in the space. The author of more than 1,000 articles, Tony was named LendIt's 2018 Journalist of the Year.

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