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What is the Gold Spot Price?

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The gold spot price refers to the current price of gold. If, for example, you were about to buy gold there and then, the spot price is what you would pay for the specified amount.

So, why do we use the term spot and how does it differ from other ways of valuing gold? If you’ve ever wondered what separates spot price from other asset valuations, our guide is here to set the record straight. Use the links below to navigate or read on below to learn more.

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What Exactly is a Spot Price and How Is It Determined?

A spot price is an immediate valuation of how much it would cost to acquire an asset. Think of it as a right-now price, which shows the value of a commodity if you were to buy it that instant.

We use spot pricing to differentiate current and future values. For example, the spot price of gold could be very different from the futures price; we’ll talk more about the relationship between these later in the guide.

The gold spot price, specifically, refers to the price it would cost to buy one ounce of gold that instant. And since gold values can fluctuate considerably, the per-ounce spot price can vary from one day – even hour – to the next.

How is the Gold Spot Price Determined?

So, how are gold spot prices determined? This is where things can get a little technical, so bear with us while we explain.

Gold spot prices are based on previous futures contracts, which is essentially a determination of how much gold is likely to cost in the coming month or months. The futures contracts themselves are affected by a range of factors, not least the volatility of gold values during a specific period.

Young man investing or trading on laptop

Why are futures contrasts used to determine the gold spot price? Essentially, it gives an indication of how much gold is currently worth based on future values and demand, which are taken from historic economic data.

For example, at the time of writing, the gold spot price is $1,852 per ounce. To reach this figure, you need to look at previous future prices contracts, which give a clear indication of how much an ounce of gold is likely to cost in the months ahead.

Typically, to refine the gold spot price, the futures contract with the highest volume is used to calculate the value. Referred to as the spot month, this is the time when gold trading is predicted to be at its highest, based on a range of factors including historical trading data.

What Affects the Gold Spot Price?

As touched on above, the gold spot price is subject to frequent change, so the price you see today is unlikely to be the same the next. Indeed, in periods when the value of gold is highly volatile and liable to move, the spot price can change hourly, so traders must keep their finger on the pulse to buy and sell at the right time.

So, what exactly affects the spot gold price?

While gold is generally considered one of the safest and most predictable asset classes, its value can still be affected by a range of external forces. From economic data and forecasting based on historic sales patterns, to geopolitical events, comments from high-profile investors, and unanticipated action or involvement from the Federal Reserve; the value of gold can rise and dip based on several key influences.

What controls the gold spot price, monitoring and discovering key trends that affect its per-ounce cost day-to-day? The answer lies in price discovery and trading platforms, like the New York COMEX exchange.

man working on laptop

Such exchanges are designed to monitor gold around the clock, allowing traders to see real-time gold spot prices wherever they’re based around the world. The COMEX exchange is also where investors trade futures contracts, which effectively offer some security over the future price of gold for a specified amount.

Remember, gold is traded on an international scale, so over a 24-hour period, gold transactions are happening in different regions around the world. Having a standard gold spot price ensures global trading can operate smoothly around the clock.

What’s the Difference Been Spot and Futures Gold Pricing?

When looking at current gold prices on market sites and exchange platforms, you might notice a spot price and a futures price. These figures are often different, so what sets them apart?

The spot price is the per-ounce cost of gold if you were to acquire it right now. The futures price, on the other hand, refers to how much the same quantity of gold would be for a period in the future – taking into account interest rates, contract dates, and the strength of market demand at the requested time of acquisition.

The difference between the spot price and future price is often expressed as the forward rate. This allows traders more insights into the best time to buy gold.

 

Glint is a payments platform that enables its clients to buy, sell, save, send and spend real allocated gold and other currencies. Glint is not a trading platform.

At Glint, we make every effort to demonstrate a balanced conversation between gold, crypto and fiat currencies when it comes to purchasing power and, while we strongly believe that gold is the fairest and most reliable currency on the planet, we need to point out that it isn’t 100% risk free. While we have seen a steady increase over time, the value of gold can fall, which means that its purchasing power can also decline.
 
To learn more, visit our homepage or give us a call at +44(0)203 915 8111.

A Guide to Spending Money Abroad

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woman using card to pay

Want more bang for your bucks on vacation? Avoid hidden fees with this handy guide on spending money abroad and getting the most of your money…

 

Slowly but surely, summer is on the way. And whether you’re taking the family abroad, planning a solo vacation, or doing a spot of international business, getting the most out of your money is just as important as packing sunscreen.

Spending money in other countries can spread your hard-earned cash a little thin. What you thought was a good chunk of change can quickly get hit by all kinds of different fees, leaving you with less spending money than you originally planned.

Want your money to go further while on vacation? You’re in the right place. From cash to cards, we’ll show you how to avoid being hit with unexpected extras during your upcoming trip.

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Is it Better to Take Cash or Card Abroad?

That depends. Some people like the security of using a card abroad. Not everyone will be happy about hopping on a plane and walking around a new country with physical money. And nothing says “tourist” like opening a wallet stuffed full of bills for all to see. All it takes is a sneaky distraction, a fleet-footed thief, and your money can be gone in seconds.

With that said, having cash on you could certainly come in useful. Not everywhere accepts cards, and you don’t want to get caught short when the final bill comes. It can also be easier to stick to a budget with physical money. If you’re a little on the spend-heavy side, it’s easy to get carried away and put everything straight on the credit card.

In general, though, the plastic approach is safer. If your card is stolen or goes missing, it’s a simple case of contacting your provider and canceling it immediately (something you can now do in most banking apps). But as this article will show, there’s a snag or two when using cards abroad that you’ll need to watch out for.

man using foreign currency on holiday

Taking Cash Abroad

If you’re thinking of taking cash with you, then you should convert it ahead of your trip. It might be tempting to change your money at the airport, but these often have the worst exchange rates. The same goes for trading money at hotel or currency kiosks at your destination. They can be pricey, and usually have poor rates and high fees.

The safest, least-expensive places to convert your cash include local banks and credit unions, as these tend to offer the best rates. Major banks, such as Chase or Bank of America, offer similar rates, plus they have the added benefit of having ATMs overseas, which is always handy if you’re running low on funds.

Online bureaus and currency converters, such as Travelex, can also help, but remember: ordering cash online means you could be hit with delivery charges and the exchange rate won’t be as strong as with your bank.

Using a Prepaid Travel Card Abroad

Think of prepaid travel cards as the new travelers’ cheques. Like credit and ATM cards, they can be used to withdraw cash, or you can simply hand them over at the checkout. You’ll be given a PIN to do both things.

The only difference is that you put money onto the card in advance. This means there’s no chance of going into debt. Need more money? All you need to do is top it up online or by text while you’re at the beach, in a museum, or sipping something refreshing at a bar.

There are a couple of catches to watch out for, of course. Certain prepaid cards charge you every time you load the card, spend on it, or withdraw cash. Based on how much you’ll be using, you could be racking a high amount of extra fees by the time you’re back home.

Worse yet, some cards will even charge you an inactivity fee if you leave money on them after your vacation’s over – and that’s on top of a fee to close the card down so you can get what’s left on it back. Be sure to steer clear of these and go for something from FairFX, Caxton, and Travelex instead.

girl paying with smartphone

Using a Credit Card Abroad

Credit card payments abroad are just as seamless as they are on home soil. But there’s an obvious price to pay – and that’s extra fees you can be hit by during your travels.

Luckily, some planning ahead of time can help minimize these hidden charges. For starters, use a credit card with no foreign transaction fee (which can range from 1% to 3% of each purchase). If your credit card is your only means of spending, then that’s a cost that’ll soon build up. Check your credit and ATM card agreements to see if you’ll be hit with these. If so, apply for a card that won’t; just be sure to apply far enough in advance of your vacation.

Once that’s done, call your credit card issuer before you jet off and let them know where you’re going and how long for. If you don’t, they may assume something suspicious is happening and block payments or suspend your card.

Watch out for dynamic currency conversion too. While the idea of paying for foreign purchases using the dollar sounds great in theory, certain merchants can be a little unscrupulous when dealing with tourists. They’ll have no problem quoting the final price in US dollars, only to make the conversion at an exchange rate that’s less than competitive.

man using smartphone and card for online banking

Using Gold Abroad

If you’re a Glint customer, you can use your Glint Mastercard in more than 150 countries around the world, so there’s no need to withdraw cash or transfer funds to a prepaid card. And with the Glint app at your fingertips, you can easily keep track of overseas transactions and fees, while also having the ability to select between different currencies at the touch of a button. If your card gets stolen, or if you lose it while you’re away, simply freeze it using your Glint app – find it again, then just as easily unfreeze and you can continue to use as before.

When it comes to spending abroad, it’s important to weigh up the best options that will make your cash go further. A little research before your trip can pay off when it comes to avoiding fees and protecting your money.

 

At Glint, we make every effort to demonstrate a balanced conversation between gold, crypto, and fiat currencies when it comes to purchasing power and, while we strongly believe that gold is the fairest and most reliable currency on the planet, we need to point out that it isn’t 100% risk-free. While we have seen a steady increase over time, the value of gold can fall, which means that its purchasing power can also decline. To learn more, visit our homepage or give us a call at +44(0)203 915 8111.

The Most Luxurious Airports in the US and Around the World

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Booking flights this summer? Treat yourself on your travels with a stop at one of these luxury airports, thanks to our original research…

If you’ve spent the last two years or so dreaming of far-flung places, the good news is that international travel is back on the agenda, and summer vacations are a go once more. With overseas travel heavily restricted for the past 24 months, then now’s the time to truly do it style. We’re big believers in making sure every aspect of your vacation is as on point and opulent as it needs to be – including the airports you’re landing at.

To make sure that happens, we’ve searched far and wide for the airports across the globe that give travelers the chance to splash out this summer. Need some inspiration? Check out the results of our research below…

Identifying the world’s most luxurious airports: What we did

To discover which airports from around the globe were the most extravagant, we collated and then narrowed down approximately 100 top global airports. We then pin-pointed certain attributes each airport featured, which allowed us to assign each with a final score.

These attributes were as follows…

  • Star rating: From our list of airports, we looked at Skytrax’s star ratings that each airport had been assigned.
  • No. of luxury brands sold: Using each airport’s website, we tallied the number of luxury brands, as opposed to stores, that were stocked there. We also discounted brands that were common across the US.
  • No. of table service restaurants: Next, we looked for restaurants in which food is brought to patrons. Fast-food outlets, coffee chains, and bars that didn’t sell food were discounted, as well as anywhere customers had to queue at a counter and then collect their food.
  • No. of lounges: We then counted the number of areas that travelers could relax in while waiting for flights.
  • Cleanliness rating: Using Skytrax once again, we noted the cleanliness of public areas across each airport.
  • Google review score: Finally, we threw each airport into Google to identify the star rating as shown in their Google reviews.

Using these data points gave us a final score which we assigned to each airport, so we could identify the world’s most luxurious transport hubs.

The World’s Top 10 Luxury Airports

list of world's best luxury airports

The World’s Worst 10 Luxury Airports

list of world's worst luxury airports

With a total index score of 85/100, Hong Kong International is officially the world’s most luxurious airport. Busy it may be, but Google reviews also note that it’s surprisingly quiet, very clean, and has a welcoming atmosphere. “Possibly my personal favorite airport in the world” said one reviewer, which says it all.

The US boasts two airports in the world’s top 10, with New York JFK and Dallas/Fort Worth both garnering scores of 60/100. The former was even deemed “THE hub for all-around travel, holding a highly distinguished place in my traveling heart”. Not bad at all, especially when you consider that none of our airports feature in the top 10 worst airport list.

Unfortunately, the same couldn’t be said of Manila Ninoy Aquino International Airport. With a score of just 29/100, the Philippines-based airport is officially the worst luxury offering on our list, and when one review recommends “[avoiding] this airport in the future”, it’s easy to see why.

The World’s Best Airports for Designer Shopping

best luxury airports list

No one’s got style like Hong Kong. And when its airport rates 20/20 for Designer Shopping, it’s hard to argue with a statement like that. For the fashion-minded passing through, the likes of Balenciaga, Cartier, and Dior are on hand to give their vacation wardrobe a real step up.

It shouldn’t be too surprising that Paris CDG took second place. Retaining its place as the fashion capital of the world, it certainly makes sense that Paris’ airport would be stocked with everything from Louis Vuitton to heavy hitters like Rolex and Fendi. Milan Malpensi, Rome Fiumicino, Dubai International, and Singapore Changi are also rated highly for their array of expensive and exclusive designer pieces.

The World’s Best Airports for Exclusive Lounges 

Hong Kong once again comes out on top here. Lounges across the airport feature an array of shower facilities, food and drink outlet, TV, internet, and even beauty and massage services – just what you need after a long flight.

Sharing the number one spot, however, is Frankfurt Airport. With “exclusivity, individuality, and discretion as standard”, its lounges feature VIP services, where staff wait hand on foot for guests. And when you’re ready to depart, your very own luxury limousine will drive you directly to your flight!

The World’s Cleanest (and Least Clean) Airports

Rest assured, if you’re traveling to any of the airports in our top ten, you’re sure to be met with cleaner-than-clean facilities. Six of our top ten featured a cleanliness score of 20/20, while the lowest score – courtesy of Japan’s Tokyo Narita International Airport – still racked up an impressive score of 18/20.

The same can’t be said of Ninoy Aquino International Airport. With a score of just 1/20, it’s far and away the dirtiest airport on our list.

The Best Airports for Restaurant Choice

With a restaurant score of 20/20, Dallas/Fort Worth International Airport is the airport to dine in on our list. From Pappadeaux Seafood Bar to the rustic flavors of Maggiano’s Little Italy, travelers can dine on a range of incredible cuisines from around the world – great news for anyone who skipped the in-flight meal.

In fact, the USA’s food offerings accounted for the top five places in our list, with Atlanta, New York, Denver, New Jersey, and Denver representing the States very well indeed.

The Best Airports for Customer Satisfaction

If strong customer service is what you look for in your airport experience, then Asia has got you covered. Four of the top 10, including Singapore, Seoul Incheon, Hong Kong, and Tokyo Haneda, were based in the continent, with Singapore and Seoul Incheon sharing the top spot. Singapore was especially singled out for praise. One reviewer noted: “intentionally sensitive to people’s needs”, while another gushed “[you’d] need a lifetime to explore the options here”.

Unfortunately, no US airports landed in the top 10 for customer satisfaction.

The USA’s Top 10 Luxury Airports

USA best luxury airports

With a total score of 60/100 each, both Dallas/Fort Worth and New York JFK share the top spot for the USA’s top luxury airports. Described as “amazing and iconic”, New York JFK came in for special praise, with customers singling out its retro-inspired design, numerous food options, and plentiful space.

The USA’s Top 5 Luxury Airports for Designer Shopping

usa luxury airport list

Although it wouldn’t touch the likes of Paris CDG, Hong Kong International, or the airports found in Milan and Rome, New York JFK still styled and profiled its way to the US’ top spot for designer shopping. If it’s a fresh wardrobe you’re looking for then the likes of BVLGARI, Cartier, and Kate Spade may be able to help with that.

The USA’s Top 5 Luxury Airports for Exclusive Lounges

Over on the West Coast, Los Angeles International Airport caters to travelers looking for some well-earned rest, scoring 16/20 for its number of airport lounges. Their Premium Lounges offer up plenty of peace and quiet away from the hustle and bustle of its more standard terminal lounges.

With shower and spa facilities on offer, they’re the perfect place to relax and unwind. Meanwhile, at the higher end of things, guests can make use of en-suite bedrooms and a mini cinema, or if you want to get the pulse racing, then why not pump some iron inside their gym area?

The USA’s Top 5 Cleanest Luxury Airports

Los Angeles comes out on top here too, though this time, it’s also sharing first place with Chicago, Denver, and Las Vegas, with all four scoring a more than respectable 15/20.

The USA’s Best Luxury Airports for Restaurant Choice

After its performance on the world stage, it’s no surprise that Dallas/Fort Worth offers the US’ best when it comes to restaurant choice, but overall, the top five generally serve up plenty of variety for guests looking to satisfy their hunger between slights. In particular, Newark’s Abruzzo Italian Steakhouse should satisfy even the most carnivorous of cravings.

Want to find out more about the world’s best luxury airports? Explore the results of our study in full below…

Glint: Luxury Airports Index (USA & World – US Copy)
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We hope our study into the world’s most luxurious airports inspires your travels in 2022 and beyond. If you’re looking for a safe, reliable, and affordable way to spend money while traveling, trust in Glint. Up to 6x cheaper than banks and with no hidden fees, the Glint Mastercard can be used in more than 150 countries – and all with no overseas ATM costs.
 
To learn more, visit our homepage.

What is Investment Risk and Why is it Important?

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Defining investment risk might sound simple – it’s the threat of losing money, right?

Well, while potential monetary loss forms the basis of risk, there’s more to the story. Because risk takes many forms in the field of investing, and there are a whole host of threats that are unique to different types of investments.

So, to fully understand the definition of investment risk, you need to consider a broad range of factors. In this guide, while we’re not offering you financial or investment advice, we will show you what investment risk is and why it’s important, before offering some tips on how to effectively minimize risk when investing. Remember, Glint isn’t an investment platform, so we’re able to remain completely neutral on the subject.

Use the links below to navigate or read on for the full guide.

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What Is Investment Risk?

Investment risk isn’t just the threat of losing money. It encapsulates all the factors that can affect your return on investment – whether that’s market conditions, geopolitical events, changing legislation, economic performance, or even things like climate change and extreme weather.

To this end, the consequences of investment risk aren’t purely limited to losing money. From dwindling returns to watching investments fail to grow, the repercussions of investment risk can be detrimental, so it’s important to do everything you can to mitigate risk where possible (more on this later).

To further complicate the issue of investment risk; there’s a fine line between being too exposed to risk and too risk-averse.

Exposing yourself to risk can lead to loss and dwindling returns. But remember, investing is never without risk, so by not taking enough calculated risks, you could effectively weaken your position and potentially lose more money than you otherwise would have.

Getting investment risk right, then, is something of a balancing act. You need to take some risks to ensure you’re not losing out unnecessarily, while also being aware of your limitations and exposure to external forces.

Why Is Investment Risk Important?

Understanding and accepting investment risk is important for several reasons, including:

  • Allows you to set your own risk parameters – knowing the risks you face as an investor puts you in a powerful position wherein you can set your own parameters and level of exposure to risk. For instance, if you’re happy to accept the calculated risk of losing money, you may seek high-risk, high-reward opportunities. If, however, you don’t want to lose any money, this will also dictate the investments available to you.
  • Demonstrates both sides of the investment coin – those new to investing may see some opportunities as overly risky, or even reckless. But with experience and a clearer understanding of investment risk, you can make calculated decisions and avoid allowing an aversion to risk stop you from taking on a project that could prove lucrative in the long run.
  • Shows you which investments may be most suitable for you – when you understand the different types of investment risk, you’ll be better placed to decide on the opportunities that are right for you. For example, typically high-risk investments like cryptocurrencies and commodities may be better suited to some types of investors than others due to the risks involved, while things like bonds and shares may be a good option for the more risk-averse.

What Are the Main Types of Investment Risk?

As an investor, there are two main risk types that you need to be aware of: systematic investment risks and unsystematic investment risks. We’ll cover what these are and their characteristics below.

What is Systematic Investment Risk?

Systematic investment risk generally covers threats affecting the broader economy and market. Often referred to as market risks, these are factors that disrupt economic performance and market conditions, and put the success and returns of individual investments in jeopardy.

Examples of systematic investment risk include geopolitical events, economic uncertainty, rising inflation, and socio-political activity. It can be difficult to avoid and mitigate systematic risk, since they affect the broader market and can directly affect a broad range of industries at any one time.

What is Unsystematic Investment Risk?

 Unsystematic investment risk is any threat faced by an individual industry, sector, or business. These kinds of risks don’t arise from broader market conditions but are instead prompted by industry-specific events and activity. In short, they’re anything that can affect a business’ ability to turn a profit and thus offer a return to its shareholders, including things like:

  • Regulatory changes or legal action
  • A change in management or senior personnel
  • Product recalls or errors
  • Bad PR and reputational damage
  • The emergence of new competitors within the market

Unsystematic investment risk can be damaging, with the potential for investors to lose everything should the outcome be particularly detrimental. However, there are ways to protect yourself against unsystematic investment risk, including asset portfolio diversification.

How Do You Minimize Risk When Investing?

While it’s impossible to remove investment risk altogether, there are plenty of things you can do to mitigate it and protect yourself from financial loss. Below, we offer a few essential tips on how to minimize investment risk.

  • Diversify your investment portfolio – as touched on above, one of the best ways to mitigate investment risk is to diversify your portfolio. The proverb “never put all your eggs in one basket” is perhaps the best way to sum up the benefit of diversification; it’s all about spreading the risk across multiple assets to minimize threats regardless of market conditions.
  • Invest in pooled funds – if you want to diversify your assets with minimal legwork, putting money in a pooled fund can be effective. Essentially, this is when you give a lump sum to a fund manager, who will spread it out across multiple assets to manage your desired level of risk and return.

  • Invest globally – one way to mitigate systematic risk is to invest on an international scale. This means that your money won’t be so easily affected by economic disruption in a single country.
  • Assess your investments regularly – to make sure you’re always hitting the sweet spot between risk exposure and risk aversion, assess your portfolio regularly to see how your investments are performing. If things have slowed, you may consider that it could be time to look at new, potentially riskier options; if there’s trouble brewing in the wider economy, you may choose to dial things back.

At Glint, we make every effort to demonstrate a balanced conversation between gold, crypto and fiat currencies when it comes to purchasing power and, while we strongly believe that gold is the fairest and most reliable currency on the planet, we need to point out that it isn’t 100% risk free. While we have seen a steady increase over time, the value of gold can fall, which means that its purchasing power can also decline.  

While explaining Investment risk, we are giving you the information to help you make up your own mind. Glint does not offer any financial or investment advice and would not ever make a suggestion that you should enter into a situation that would put you or your money at risk. Your money is at risk with all investments.
 
To learn more, visit our homepage or give us a call at +44(0)203 915 8111.

8 Alternative Ways to Save Money

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8 alternative savings methods

Amid rising interest rates, soaring inflation, and global economic uncertainty, cash alternatives are proving a popular place for savers to store their money. But which of these left-field savings options provides the best solution? And what risks and rewards should you consider before moving your money?

To help you navigate the often confusing, at times risky world of alternative savings, we’ll look at 8 of the more unconventional ways to save money in 2022.

Please be aware that this is NOT financial advice.

1.    Equities

Equities like stocks and shares remain a popular place for savers to put their cash, and generally speaking, such assets perform better than cash savings over long periods. Of course, there are risks involved in equity investing, so careful research and due diligence are needed before you part ways with your hard-earned savings pot.

Pros

  • On average, equities perform better than cash over the equivalent period
  • You can spread the risk of losing money by investing in a range of equities
  • Potential to make significant earnings on your investment

Cons 

  • Equities are considered a high-risk savings strategy, and you could lose some or all your savings
  • Equities don’t perform as well when interest rates are rising
  • The value of stocks and shares can be influenced by a huge range of forces, making them especially volatile

2.    Exchange-Traded Funds (ETFs)

Those looking to invest on the stock market in a low-risk way should consider exchange-traded funds (ETFs). This is when you effectively invest in a package of stocks across a broad range of industries, providing greater protection should sector-specific crashes affect share prices. A benefit of ETFs is that you can choose your level of risk, so there’s more certainty about retaining overall asset value.

Pros

  • A simple way to invest on the stock market while diversifying your assets
  • A broad range of ETF options means you can choose your level of risk
  • Diversification means reduced risk of losing money

Cons 

  • ETFs carry the same risks as general equities; you could still lose all your money by investing poorly
  • When investing in a gold ETF, the asset is not owned by you but by the trustee.

Looking for new ways to save

3.    Unit and Investment Trusts

Unit and investment trusts are similar to ETFs, with the key difference being that they operate through a trust. The trust or fund manager will pool resources from trustees and invest in well-performing assets, including a mix of bonds, shares, and property funds. Typically, trustees receive a quarterly or biannually income on all earnings made across the portfolio of assets.

Pros 

  • Fund managers typically target well-performing assets
  • Potential to make gains and receive an additional income

Cons 

  • Earnings aren’t always guaranteed, as trusts tend to focus on low-risk assets
  • As with other investments of this kind, there’s still the chance of losing money

4.    Government or Corporate Bonds

Bonds have long been a popular way of storing money with the added bonus of earning interest on the money you lend. Typically, governments or companies request money which you issue to them as a loan, which they then pay back within an agreed timeframe with added interest.

Pros

  • Predictable returns over a set period of time, so you get tight control of your money
  • Lower risk than shares and stocks, particularly when dealing with stable organisations
  • Potential to make sizeable earnings as interest

Cons 

  • If you want to make significant earnings on your savings, bonds may not be the most lucrative option
  • Dealing with unstable organisations carries a risk

5.    Peer-to-Peer Lending

Peer-to-peer (P2P) lending is comparable to bonds with the key difference being that you’re lending money to individuals, and not just governmental bodies and businesses. You can still earn interest on the loans you issue, but there are more risks involved. Peer-to-peer lending is generally managed by P2P platforms, through which you can easily manage different loans and revenue streams.

Pros

  • Potential to make steady earnings
  • Growing number of P2P platforms offers lots of opportunities to invest
  • Most P2P platforms are now regulated by the FCA

Cons 

  • Riskier than bonds since you’re dealing with individual lenders
  • P2P platforms aren’t covered by the Financial Services Compensation Scheme, so you could lose everything if a platform were to collapse
  • Requires careful management, and can be a steep learning curve for those unfamiliar with this type of lending

New saving methods

6.    Crowdfunding

The popularity of crowdfunding has risen astronomically in recent years, and could be considered a high-risk way to put money aside for the future. It essentially involves speculating on new and upcoming businesses and projects, backing them through crowdfunding sites to help them realise their ambitions for growth. Get it right, and it can be one of the fastest ways to grow your money.

Pros

  • Allows you to support the businesses, projects, and initiatives you care about
  • Potential to make sizeable earnings if the company gets off the ground
  • You might receive gifts, products, and early access to new tech by supporting some funds

Cons

  • No guarantee of future earnings
  • Crowdfunding is speculative, so there’s a risk of losing money

7.    Cryptocurrency

Cryptocurrency may remain a volatile and highly divisive asset class, but there’s no denying that these types of digital currencies have made a lasting impact on the economic landscape. If you’re interested in investing in crypto, you need to consider the risks involved and perform the appropriate due diligence before parting ways with your cash.

Pros

  • High risk, high reward savings opportunity
  • Blockchain technology that underpins cryptocurrency is generally very secure
  • Since the value of crypto is based on global demand as opposed to national inflation, it could help you stave off the negative effects of rising inflation

Cons

  • Volatile and highly risky investment, with the potential to lose all your money
  • Not proven as a secure, long-term investment
  • Steep learning curve attached to understanding and investing in cryptocurrencies

Alternative saving methods

8.    Gold and Precious Metals

Gold and precious metals have been used as a means of hedging against inflation for decades, and they are largely considered one of the safest places to store your money in times of economic uncertainty.

Pros

  • Gold and precious metals are among the best lines of defence against inflation
  • Reliable money that will hold its value over time

Cons

  • Gold doesn’t offer the earnings potential of other investment assets
  • The value of gold can go up or down, meaning its spending power could also be worth less.

At Glint, we make every effort to demonstrate a balanced conversation between gold, crypto and fiat currencies when it comes to purchasing power and, while we strongly believe that gold is the fairest and most reliable currency on the planet, we need to point out that it isn’t 100% risk free. While we have seen a steady increase over time, the value of gold can fall, which means that its purchasing power can also decline.
 
To learn more, visit our homepage or give us a call at +44(0)203 915 8111.

What Does it Mean to Have a Stable Currency?

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What is a stable currency

Some of the most vocal critics of cryptocurrencies and other emerging forms of money question their stability. But what does it actually mean for a currency to be stable? And what factors contribute to it?

Throughout the world, there are many traditional fiat currencies that could be described as stable, including the US dollar, pound sterling, Swiss franc, and Japanese yen. What separates these currencies from emerging, often volatile cryptocurrencies isn’t a secret, unknown entity; it’s simply the fact that they’ve been around much longer, and therefore their ability to maintain value is better tried and trusted.

In this guide, we’ll take a closer look at what makes a currency stable, considering how different types of money accrue stability and how the gold standard has contributed to the formation of some of the world’s most stable forms of currency.

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What is a Stable Currency and How Does Money Become Stable?

A stable currency is a form of money whose value hasn’t changed significantly for a long period of time. It’s any currency that is in mainstream use, with a proven track record in sustaining value and providing a trusted form of money for day-to-day consumers.

One of the first things to know about stable currencies is that they take years to reach the point at which they can be defined as ‘stable’. The US dollar, for example, took over a century to reach the stability threshold, while other, older types of money including the British pound sterling have been in circulation – and thus moving towards stability – since the 1600s.

What is a stable currency

Secondly, much of what makes a currency stable stems from the fact that they’re backed by strong economies and governments. From the US dollar to the Swiss franc, the world’s most stable currencies are linked to countries with solid economies and governance, which contributes to them being safe, stable, and often used by other countries in a foreign exchange capacity.

As well as benefiting from the backing of a strong economic power, stable currencies often originate in countries that formerly used the gold standard – a system that pegged day-to-day money against a nation’s gold reserves. We’ll talk more about the link between stable currencies later in the guide, but suffice to say it’s no coincidence that the world’s most valuable precious metal has strong ties with currency stability.

How Did the Gold Standard Influence the Formation of Stable Currencies?

Gold has fascinated us for over 5,000 years, but it wasn’t until the 19th century that the gold standard was introduced. First adopted by England in 1821, the system worked by using gold to back the value of money, and was quickly adopted by most developed nations as a means of regulating value and standardizing monetary systems.

Reaching its zenith in the late 19th and early 20th centuries, the gold standard began to decline in the wake of World War One, when global government finances were in a state of disarray. Therefore, an alternative system was developed to reduce countries’ reliance on gold reserves, resulting in the emergence of ‘fiat money’ – currencies not backed by gold but instead defined as legal tender under government decree.

Although the ‘true’ gold standard only existed for 50 years or so, its legacy can still be felt within stable financial currency systems today. Indeed, gold remains a critical financial asset for countries and central banks around the world, and remains one of the most widely used indicators of a nation’s economic health and prosperity. As such, its long-standing affiliation to fiat money means that currencies like the US dollar are viewed as stable since they remain connected to the value of gold – one of the world’s most coveted and easily recognized assets.

Benefits of a stable currency

How Could Cryptocurrencies Become Stable Currencies?

When defining stable currencies, it’s worth considering what many people view as their antithesis: cryptocurrencies. With a short history and a volatile value profile, these new digital currencies are far removed from the likes of the US dollar and the British pound. The question is: could they ever achieve stability comparable to fiat money? And what would it take to get them there?

Though becoming increasingly popular, cryptocurrencies like Bitcoin aren’t as widely used or trusted enough to be considered ‘stable’. For them to accrue stability, they would need to be more widely used, both by day-to-day consumers and as a viable form of value exchange between businesses, organizations, and countries.

In short, the more people use cryptocurrencies, the stronger and more stable they’ll become. Just as the US dollar, the Japanese yen, and the British pound grew from nothing over many decades, so too could cryptocurrencies – in theory, at least.

Another way that cryptocurrencies could become stable currencies is through their use as a hedge against inflation. Much like gold has long been used as a line of defense against declines in monetary power, cryptocurrencies could serve a similar purpose.

How? Since cryptocurrencies can’t be easily manipulated, like fiat currencies, they have the potential to bring stability and provide protection against inflation. Like gold, it’s impossible for a single government or entity to make more cryptocurrency, so it has the potential to become an effective inflation hedge.

Time will tell how stable cryptocurrency becomes in the future. Right now, it’s not entirely clear how resistant some digital currencies are to manipulation. And with crypto not yet in widespread, regular use, the likes of Bitcoin aren’t yet building the trust and exposure needed to become true stable currencies.

What is a stable curency

Is Gold the Most Stable Currency in the World?

While the era of the gold standard may have ended decades ago, its legacy can still be felt in the world’s strongest economies. And since gold is still recognized as the only international form of currency whose value can’t be debased, manipulated, or altered, it remains one of the strongest, most stable currencies in the world, and one which millions of people look to as a safe, secure, and unwavering store of value.

At Glint, we make every effort to demonstrate a balanced conversation between gold, crypto and fiat currencies when it comes to purchasing power and, while we strongly believe that gold is the fairest and most reliable currency on the planet, we need to point out that it isn’t 100% risk free. While we have seen a steady increase over time, the value of gold can fall, which means that its purchasing power can also decline.
 
To learn more, visit our homepage or give us a call at +44(0)203 915 8111.

A Guide to CBDCs

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Could I use CBDCs

CBDCs, or central bank digital currencies, are on the rise, with nine already launched and more than 60 in development. But what are these new forms of bank-backed digital money? And how might they affect you?

Driven by the rise of crypto, CBDCs are being heralded by some governments as a safe, stable form of digital money. But there’s still a long way to go before they become an accepted form of day-to-day public money, and questions remain over their safety, ethics, and integrity.

To help get you up to speed on CBDCs, we’ve put together this essential resource. Covering what they are, why they’re needed, and their risks and advantages, our guide is the perfect introduction for anyone looking to learn more about how central bank digital currencies could affect their money in the future.

Use the links below to navigate or read on the for the full guide.

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What Are CBDCs?

CBDCs are central bank- and government-backed digital currencies that are designed to offer a safer alternative to cryptocurrency. They aim to bring the advantages associated with crypto to a wider public, ensuring that fiat currencies aren’t outstripped by rapidly emerging digital private challengers.

While CBDCs can generally be compared with cryptocurrencies like Bitcoin, there are distinct differences. For one, crypto relies on a decentralized database known as blockchain. While early CBDCs utilize similar technology, the central banks that control them manage the blockchain themselves, making them a private and not decentralized form of currency exchange.

Up until now, the development of CBDCs has been slow, with only a handful of countries moving forward with the initiative into its advanced stages. But with major financial players like China among the early adopters of CBDCs, it won’t be long before we see other digital currencies emerging in developed countries around the world.

It’s a similar case in other Western nations too. In the US, the Federal Reserve is currently exploring the costs, benefits, and limitations of CBDCs, with a view to publishing its findings in the near future, and the UK’s ‘Britcoin’ is currently being explored by the Bank of England.

A Guide to CBDCs

Why Are Governments Looking to Develop CBDCs?

So, exactly why are world governments looking to develop CBDCs?

The move comes in response to two major global challenges, the first of which being the astronomic rise of crypto. While the development and take-up of cryptocurrencies was initially slow, investment has risen dramatically over the past two or so years, as a growing number of people look to buy into digital money (still only 23% of Americans and 6% of Brits own crypto, but this is growing yoy).

The rise and rise of crypto presents several challenges to governments and central banks. Chiefly, they’re concerned that digital currencies could begin to outstrip regulatory powers, and thus elude government oversight.

What’s more, there are geopolitical factors to consider. As the devastating war continues to play out in Ukraine and the world looks to find its feet in the wake of the COVID-19 pandemic, governments are looking to shore up their respective economies and put money into initiatives that provide better protection in times of financial uncertainty.

As well as these overarching considerations, governments and central banks are also seeking to maintain protections for consumers and businesses. There are concerns that unregulated digital currencies could ultimately threaten financial stability, harming the welfare of individuals and enterprises in the long term. The introduction of CBDCs is seen as a means of embracing cryptocurrencies without  potentially harmful effects.

What Are the Advantages of CBDCs?

When it comes to a viable means of competing with digital currencies and crypto, CBDCs may be the solution that central banks have been looking for. In early versions of the technology, which include China’s e-yuan and the Bahamas’ Sand Dollar, several advantages have been identified which could ultimately help the technology to proliferate on a global scale.

What is a CBDC

Let’s take a closer look at the benefits of CBDCs below.

  • It’s hoped that the introduction of CBDCs could help to reinvigorate and bolster the crypto ecosystem, leading to greater competition, innovation, and growth. The benefits of this would spill over into other areas, not least the technology sector, helping to generate economic growth.
  • Like other blockchain-enabled currencies, CBDCs can provide streamlined and rapid payments and settlement, as well as efficient overseas payments. Because they lack intermediaries, they support fast, liquid payments and transfers – which is one of the key reasons why cryptocurrencies have proven so popular. That said, it’s worth remembering that crypto transactions can be quite slow and expensive, depending on the blockchain and currency.
  • As countries around the world continue to move towards a ‘cashless society’ status, CBDCs present a secure, fast, and efficient alternative to traditional card payments. For governments seeking faster progress towards the phasing out of coins and notes, central bank-backed digital currencies have a role to play in post-cash economies.

How CBDC works

What Are the Risks of CBDCs?

Of course, CBDCs aren’t without their risks, which is why nations like the US and UK are making such a thorough job of vetting their viability. Among the risks associated with CBDCs are:

  • Currently, CBDCs have a major geographical flaw, in that they’re only accepted in their country of origin. This could prove a barrier to their long-term functionality and uses, unless a solution is put in place.
  • Some experts fear that CBDCs could lead to major bank runs, in which lots of customers withdraw money at a similar time. The impact of this can drive banks into insolvency, meaning reduced competition and the threat of central bank buyouts, which can put a squeeze on the public purse.
  • In some instances, there have been debates about the ethics of CBDCs, with concerns that central banks could gain too much control over consumer spending. Some experts argue that CBDCs are essentially programmable currencies, which erode free choice and consumer rights.
  • There’s also the issue of inclusion, with concerns about how well older generations will access CBDCs if they become a mainstream currency option. For example, how easy will it be to access CBDC technology on older devices? And, some may ask, is it really fair to expect old or vulnerable people to access their money through ‘digital wallets’?
  • A further worry concerns privacy. Would a CBDC give a government easier or greater access to individuals’ data? This is a major concern about China’s e-yuan for instance; it gives central government tremendous surveillance possibilities.

At Glint, we make every effort to demonstrate a balanced conversation between gold, crypto and fiat currencies when it comes to purchasing power and, while we strongly believe that gold is the fairest and most reliable currency on the planet, we need to point out that it isn’t 100% risk free. While we have seen a steady increase over time, the value of gold can fall, which means that its purchasing power can also decline.
 
To learn more, visit our homepage or give us a call at +44(0)203 915 8111.

How is the US Dollar and Gold Linked?

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Does gold affect the US dollar

Gold remains one of the world’s most coveted commodities, much as it has for thousands of years. But why is the precious metal so highly prized? And what connection does it have to the US dollar and the value of day-to-day currency?

To find out, we’re taking an in-depth look at gold and its relationship with the US dollar. We’ll trace its history and background, highlighting how it has helped shape our economy, and why it’s still considered such an important resource today.

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What is Gold’s Role in Modern Currency Systems?

Gold remains a universal wealth and value indicator around the world. Since ancient times, it has proven an efficient, reliable, durable, and consistent source of value, and so it is still widely accepted as a global barometer of economic and political health.

When an economy is struggling, the value of gold has historically been seen to increase. This is through increased demand for what many see as a stable and consistent asset, and one not easily shaken by geopolitical turmoil or governmental weakness.

The same is usually true in reverse when an economy is prospering. In peacetime, when a fiat currency is performing with no signs of recession or inflation, the value of gold tends to drop. This is through decreased demand.

Interested to learn more about what affects the price of gold and how it relates to global currency systems? Read our comprehensive guide.

How is the US dollar and gold links

How Are Gold and the US Dollar Linked?

Gold has long been associated with the US dollar. Indeed, the precious metal is currently denominated in dollars, no matter where in the world it’s traded.

The US first adopted the gold standard in 1834. This meant that the government agreed to convert a fixed amount of gold into paper money, for the purposes of day-to-day use.

The gold standard is considered a stable and efficient means of controlling inflation, ensuring that the issuance of money is maintained in the long term. However, in 1931 the US stopped using the gold standard, with the system phased out completely by 1973. In between, the Bretton Woods Agreement established the first international currency exchange, which pegged the US dollar to the value of gold at a fixed rate of $35 per ounce. Though relatively short-lived, the agreement led to the creation of the International Monetary Fund (IMF) as well as the World Bank.

In 1973, the US gold standard was replaced by fiat money, which effectively means that government issued money, not backed by gold, is accepted as a means of payment.

Still, even after the abandonment of the gold standard, gold and the US dollar remain closely linked. The per-ounce cost of gold is directly affected by the value of USD; when the dollar is high, demand for gold (and therefore value) is likely to drop; when the dollar is weak and inflation is rising, gold prices tend to leap as investors look to protect their assets from diminishing fiat values.

Links between gold and US dollar

While there is no official relationship between gold and USD, the values of each tend to oppose one another. This is largely down to external factors like economic performance, monetary policy, and supply and demand, not to mention overall investor sentiment.

At Glint, we make every effort to demonstrate a balanced conversation between gold, crypto and fiat currencies when it comes to purchasing power and, while we strongly believe that gold is the fairest and most reliable currency on the planet, we need to point out that it isn’t 100% risk free. While we have seen a steady increase over time, the value of gold can fall, which means that its purchasing power can also decline.
 
To learn more, visit our homepage or give us a call at +44(0)203 915 8111.

5 Ways to Protect Yourself Against Financial Fraud

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Investor or not, financial fraud is a risk to everyone. In 2021 alone, cases of global fraud rose by a staggering 149%, with many blaming the unique conditions of the COVID-19 pandemic for this dramatic increase.

As an individual, it can be hard to stay abreast of the latest anti-fraud best practices. After all, cyber-attacks and phishing scams are becoming ever more sophisticated, so the average person may lack the knowledge and expertise to adequately protect themselves from these growing threats.

To help you safeguard your assets against fraud, scams, and cybercrime, we’ve put together this essential guide on protecting yourself against financial fraud. Because while it’s impossible to guarantee 100% protection against fraud, a proactive approach can certainly help.

1. Know How to Identify Common Scams

Cybercriminals will use any means at their disposal to steal your personal information and financial data. This applies to a range of channels, including fraudulent phone calls, text messages, and emails, as well as online banking and investment scams.

While scams differ across these channels and platforms, criminals typically use comparable tactics to try to access your financial records. Familiarizing yourself with these commonly used strategies can help you to spot scams – and take action – before they materialize.

Common signs of financial scams include:

  • Requests to provide sensitive personal or financial information
  • ‘Urgent or ‘act now’ messaging
  • Prompts to call unfamiliar numbers; always cross-reference contact information against a bank or organization’s official contact details
  • Requests to provide your card’s PIN for ID purposes
  • Not using your full name or providing any other identifying information in email or text correspondence
  • Suspicious links to dubious-looking web pages, often with a spelling mistake or error to differentiate it from a bank’s official site

For further advice on spotting financial scams, visit the USA.gov fraud portal.

Protecting against financial fraud

2. Familiarize Yourself with Your Bank’s Privacy Policy

Banks and other financial institutions take a proactive role in keeping customer information safe. They understand that security standards are a major concern for users, so it’s in their best interest to provide as secure a service as possible.

To help you discern scams from genuine correspondence, banks provide no-nonsense information on the types of requests and information they typically ask for. Though rules differ between organizations, financial institutions will generally never:

  • Ask you for personal information over the phone or online
  • Request that you transfer money into a separate account, even if you’re a victim of fraud
  • Ask you to withdraw funds and hand them over for safekeeping
  • Request digits from your debit or credit card, particularly the three numbers from the privacy strip
  • Pressurize you or use urgent messaging

3. Never Click on Suspicious Links in an Email or Text Message

Phishing scams often take the form of urgent messaging prompting you to click on suspicious links. Don’t. These bogus links lead nowhere and can often end in you handing over personal details or providing inadvertent access to cybercriminals.

Banks and financial institutions rarely send correspondence that contain links. So, if you do receive a message which includes a link, always treat it with suspicion.

The easiest way to spot a bogus link is to hover over the hyperlink until the forwarding address appears; on mobile devices, you can long-press the link to see the same details. If you don’t recognize the address, never click the link.

Alternatively, if you’re worried about clicking a link by mistake, simply contact the organization in question. They should be able to confirm whether or not the message or email is genuine.

Phishing scams like these are among the most prevalent forms of financial fraud out there; they’re also the most effective. Our advice is to treat every email or message with suspicion, confirming all the facts before taking action.

Protecting your business against financial fraud

4. Know the Signs of Investment Scams

Interest in investing has exploded over the past decade, and the emergence of new asset classes, platforms, and opportunities has, inadvertently, given rise to a wave of investment scammers. Like general banking scams, investment fraud is becoming increasingly sophisticated, so you need to perform the appropriate due diligence at every stage of your investment journey.

Understanding the common signs of investment fraud is a good starting point for developing a sound working knowledge of the typical threats that investors face. Warning signs to look for include:

  • Unsolicited contact – cold-calling in any form should arouse suspicion, so proceed with caution.
  • Improbable returns – if a deal sounds too good to be true, it usually is. Question every aspect of a proposition to validate its legitimacy.
  • Pressure – a common tactic used by investment scammers is to pressurize you towards a decision. This typically takes the form of a deadline or deal expiration, at which time you’ll no longer get the same favorable rates. Never feel pressured to make any investment decisions.
  • Requesting remote access to your devices – some scammers may request remote access to your device to show you a specific app or piece of software. Let them in, however, and they could easily swipe your personal information or lock you out of your device altogether.
  • False authority – the shrewdest scammers go to great pains to make their materials look as convincing as possible, using doctored logos, messaging, and regulatory wording to add authenticity to their pitch. Such scams are among the hardest to spot, but as we touched on earlier, you should treat all unfamiliar correspondence with suspicion.

Businessman protecting against financial fraud

5. Listen to Your Instincts

If you’re reading this guide, you’re already halfway to making yourself less of a target of financial fraud. But there’s only so far guides, advice, and security software can protect you and your money; the rest is up to you.

When it comes to managing your money – either through a bank or investment portal – you need to stay sharp, smart, and switched on. Common sense and gut feeling are as important as security protocols when managing money online, so never let your guard down.

Whether you’re an investor or a bank customer, there are times when complacency can creep into day-to-day asset management. You may start being less careful with your everyday apps and software, making it easier to miss the warning signs of incoming threats.

What’s more, it’s often difficult for the average person to keep up to date with the latest security threats and fraud tactics. With complex new strategies emerging all the time, a careful and consistent approach is needed.

If you are the victim of financial fraud, it’s important to report this to your local government. They pass all fraud cases to the federal government, which in turn tracks scam patterns, updating guidance accordingly. This ensures that security protocols remain in step with the latest threats.

At Glint, we make every effort to demonstrate a balanced conversation between gold, crypto and fiat currencies when it comes to purchasing power and, while we strongly believe that gold is the fairest and most reliable currency on the planet, we need to point out that it isn’t 100% risk free. While we have seen a steady increase over time, the value of gold can fall, which means that its purchasing power can also decline.
 
To learn more, visit our homepage or give us a call at +44(0)203 915 8111.

What is Blockchain? The Technology Behind Cryptocurrencies Explained

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Despite some false starts and bad press, cryptocurrencies are on the rise. But how exactly do these new digital currencies work? And what powers them? The answer lies in blockchain, a technology many will have heard of without fully understanding what it is and how it works.

If you’re interested in investing in cryptocurrencies like Bitcoin or Ether (Ether or ETH is the cryptocurrency of the Ethereum blockchain), you should first familiarise yourself with blockchain. Understanding how the technology relates to digital currencies will help you to better understand how they work, and the risks and rewards involved.

To get you up to speed, we’ve put together a need-to-know guide to blockchain. Use the links below to find the help you need or read on for the full guide.

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What is Blockchain?

Blockchain is a type of distributed database that stores information in a digital format, sharing it among nodes within a network. The technology plays a critical role in cryptocurrencies, helping to keep digital currencies secure, decentralized, and reliable.

The nature of blockchain technology means that it’s very difficult to hack, cheat or change the system – making it perfect for handling digital currencies. Think of it like a digital ledger, wherein transactions are duplicated and distributed across an entire computer network.

As a standalone facility, blockchain is categorized as a distributed ledger technology, or DLT. This essentially refers to any technology that is managed and monitored by multiple participants, i.e., investors in the case of cryptocurrencies.

Since emerging in the early 1990s, blockchain and its applications have exploded in popularity, with the technology used predominantly in conjunction with cryptocurrencies.

A guide to blockchain technology

How Does Blockchain Work?

For those not versed in advanced computer tech, blockchain can be difficult to get your head around. But it’s certainly worth gaining an understanding of how the technology works, so you can approach cryptocurrency investment with greater confidence.

The primary goal of a blockchain is to keep the information contained within safe, secure, and incorruptible. Because the technology uses duplication and distribution to safeguard data, it’s almost impossible to tamper with, as would-be hackers would need to change every block of data within the chain – an improbable undertaking.

To help you understand the benefit of using blockchain to support digital cryptocurrencies, here’s a brief analogy. Say a company operated over 1,000 servers from a single location, using them to store business-critical data. While they would enjoy full control and ready access to each server, there is one major weakness: the data is at risk from external problems that jeopardize its integrity and security.

Because a blockchain duplicates and distributes data across a global network, there’s no such single point of failure. Instead, the information is secure, safe, and mobile, accessible by all invested parties but not exposed to external influences and threats.

From a cryptocurrency point of view, blockchain is essential in maintaining the currency’s value and security. And as a blockchain gets longer, it only gets more secure, which is why well-established digital currencies such as Bitcoin are so valuable and in demand.

To further inform your understanding of blockchain, here’s a breakdown of how a cryptocurrency blockchain transaction happens in practice.

  1. When an investor buys, sells or trades cryptocurrency, a new transaction is entered in the blockchain.
  2. Details of the transaction are transmitted to a peer-to-peer network, distributed to computers and servers all around the world.
  3. From here, the network uses algorithms to solve complex equations relating to the transaction, confirming its validity and accuracy.
  4. After confirmation, the network clusters these transactions into blocks – hence the term ‘block’
  5. Next, these blocks are ‘chained’ together, resulting in a complete history of all transactions within a single blockchain.
  6. After which, the transaction is finalized and complete.

Using blockchain technology

Why is Blockchain Used for Cryptocurrencies?

Cryptocurrencies rely on blockchain. But why is the technology such a good fit for digital currencies? Let’s take a look at some of its key attributes and capabilities.

  • Network-wide transparency – when a new investor buys into an existing cryptocurrency blockchain, they’re granted access to the chain’s ledger, which details transactions old and new. This is important for transparency and trust, helping to maintain the currency’s perceptible value.
  • Anonymous – the personal details of individual investors are kept private and anonymous within the blockchain, further enhancing security and data protection.
  • Irreversible changes – once a transaction is submitted to a blockchain, it cannot be changed or amended. This improves accountability and security, while ensuring accurate and complete data logs.
  • Time-stamped data entry – all logged transactions within a blockchain are time-stamped for security and authenticity. This improves the validity and makes it easier to track changes and developments.
  • Individual encryption – data encryption provides outstanding security, with all records protected from end to end.
  • Programmable – for a blockchain to work in conjunction with cryptocurrencies, it must be programmable. This allows for direct manipulation of records within a chain from individual users, which is an essential part of buying, selling and trading digital currencies.

How Safe is Blockchain?

There is much debate around the safety, security, and viability of blockchain as it relates to digital currencies. And while many remain skeptical about the technology, there’s no denying its strength and robustness in protecting crypto investors from data theft and cybercrime.

As touched on above, blockchain’s key strength lies in decentralization. With data distributed across innumerable global devices, a blockchain is almost impervious to direct, location-specific cyberattacks, as well as external influences like power loss or natural disaster.

What is blockchain

What’s more, the nature of the technology also lends itself to maintaining tight security for investors and stakeholders. With new blocks of data always added to the chain in a chronological, linear fashion, users can easily spot inaccuracies and anomalies, while hacking such a system would require an extraordinary amount of time and money.

Of course, as with any alternative currency, you need to think carefully before investing in blockchain-supported crypto. There are risks involved with all cryptocurrencies, including mainstream variants like Bitcoin, so be sure to carry out the appropriate due diligence before parting with your cash.

At Glint, we make every effort to demonstrate a balanced conversation between gold, crypto and fiat currencies when it comes to purchasing power and, while we strongly believe that gold is the fairest and most reliable currency on the planet, we need to point out that it isn’t 100% risk free. While we have seen a steady increase over time, the value of gold can fall, which means that its purchasing power can also decline.

To learn more, visit our homepage or give us a call at +44(0)203 915 8111.