About Pax Gold (PAXG)

Pax Gold Frequently Asked Questions (FAQ)

What is Pax Gold and how does it relate to traditional gold investing?


Pax Gold (PAXG) is a digital asset or cryptocurrency, each token of which represents one fine troy ounce of a 400 oz London Good Delivery gold bar, stored in Brink's gold vaults. It allows investors to purchase and hold gold in a digital format, providing the ease of online transactions and the option to own fractions of a gold bar. This relates to traditional gold investing by offering a more accessible and divisible means of owning gold, while also leveraging blockchain technology for security and transparency, without forgoing the underlying value of real physical gold.




Who is the founder of Pax Gold and what is his background?


The founder of Pax Gold is Charles Cascarilla. His background includes extensive experience in financial services, including work with Goldman Sachs and as a portfolio manager. Cascarilla is also a co-founder of Paxos, the blockchain infrastructure platform behind Pax Gold, and has been involved in the cryptocurrency space for many years.




How does Pax Gold differentiate itself from other ERC-20 tokens?


Pax Gold (PAXG) differentiates itself from other ERC-20 tokens by representing physical gold, where each token is backed by one fine troy ounce of a 400 oz London Good Delivery gold bar. PAXG offers the portability, divisibility, and affordability of blockchain assets while maintaining the value and stability of gold. Unlike other digital assets, PAXG holders own tangible gold, offering a unique blend of digital and real-world asset benefits.




What is the significance of each PAXG token being backed by London Good Delivery gold bars?


The backing of each PAXG token with London Good Delivery gold bars ensures that the token has real, physical gold's intrinsic value. This standard of gold is recognized for its quality and consistency, making PAXG a secure and reliable digital representation of physical gold ownership, enabling easy trading, holding, and ownership verification.




Can Pax Gold be launched on blockchains other than Ethereum, and if so, under what conditions?


Yes, Pax Gold (PAXG) can in principle be launched on blockchains other than Ethereum. This would require Paxos, the company behind PAXG, to create and issue the tokens on another blockchain that supports smart contracts and assets pegged to physical commodities. The conditions for such a launch would include complying with regulatory requirements, establishing the necessary security protocols, and ensuring the availability of a compatible infrastructure for the operation and governance of PAXG on the new blockchain.




How does the proof-of-work model secure the Pax Gold network and what are its implications?


Pax Gold (PAXG) does not use a proof-of-work (PoW) model as it is an asset-backed token, not a blockchain network with its own consensus mechanism. Instead, PAXG is built on the Ethereum blockchain, which uses a different mechanism for consensus. Pax Gold's security relies on the underlying Ethereum network, which has transitioned from PoW to a proof-of-stake (PoS) model as of the Ethereum 2.0 upgrade. Therefore, PAXG benefits from the security provided by Ethereum's PoS model, which involves validators staking ether (ETH) to validate transactions and maintain network integrity. This reduces energy consumption compared to PoW and mitigates the risk of centralization due to the high cost of mining equipment.




What is the role of Brink's gold vaults in relation to Pax Gold?


Brink's gold vaults are responsible for the secure storage of physical gold that backs the Pax Gold (PAXG) tokens. Each PAXG token represents ownership of a specific amount of physical gold, and this gold is custodied in Brink's vaults, ensuring the token's value is redeemable and verifiable.




How does the Pax Gold network adapt with Ethereum's transition to proof-of-stake?


As Pax Gold (PAXG) is an ERC-20 token on the Ethereum blockchain, it will naturally adapt to any changes in Ethereum's consensus mechanism without needing any direct action from PAXG itself. With Ethereum's transition to proof-of-stake (PoS) through the Ethereum 2.0 upgrade, Pax Gold tokens will continue to operate on the updated network. The transition is seamless for ERC-20 tokens, so PAXG holders do not need to take any specific steps in response to the change.




What was the intention behind creating Pax Gold according to the official whitepaper?


The intention behind creating Pax Gold was to provide a digital asset that offers the benefits of physical gold ownership along with the speed and mobility of a digital asset. It aims to make gold more accessible and transactable by enabling investors to own and trade fractional amounts of gold, secured by blockchain technology, without the drawbacks of traditional gold investment methods, such as high storage costs and limited accessibility.