Silvertoken is a digital currency that claims to be redeemable for real, physical silver. Find out how it works today in our review.
What Is Silvertoken?
Silvertoken, found online at Silvertoken.com, is a combination of silver and digital currency. The company claims that each Silvertoken coin represents real, physical silver.
The goal of Silvertoken is to create a digital currency with less volatility than a traditional currency. Today, cryptocurrencies are notorious for their volatility. Some companies claim that by basing cryptocurrencies on a physical asset like gold or silver, we can reduce volatility and increase the legitimacy of digital currencies.
With that in mind, Silvertoken aims to “create a bridge between the intangible ecosystem of cryptocurrencies and the enduringly tangible world of silver.” Let’s take a closer look at how Silvertoken works.
How Does Silvertoken Work?
Silvertoken is an ERC20 token built on the Ethereum blockchain. Each Silvertoken is purportedly backed by real, physical silver.
Every time a transaction takes place on the Silvertoken network, a fee is added to that transaction. Parts of this fee are used to fund storage and operating costs for the real, physical silver, while other parts of the fee are used to purchase more physical silver. As Silvertoken becomes more popular, and more transactions are processed on the network, the value of the silver reserve should grow.
As the value of the silver reserve grows, each Silvertoken will increase in value, although the purchasing power “remains stable or increases,” explains the official website (no, I don’t understand what they mean by this statement either).
Silvertoken also claims that Silvertokens can be redeemed for physical silver. So if you hold Silvertokens, then you can contact the company to claim your silver.
Overall, there’s limited technical information about Silvertoken available anywhere online. The whitepaper is just 10 pages long, and the website has very little information about the project.
Here are some of the advertised features for Silvertoken:
Purchase silver with your choice of available currencies, then receive a Silvertoken coin as proof of your purchase.
Silvertokens can be kept in any ERC20 wallet of your choice, just like an ordinary ERC20 token.
The silver you purchased is allocated and stored in a high security vault on your behalf.
Silvertoken charges a 1% fee for each Silvertoken transaction. A portion of the fee is used to cover storage costs (for securely storing the silver), while another portion of the fee is used to buy more silver.
Redeem Silver Any Time:
Silvertoken allows investors to redeem their silver at any time, or watch their silver grow over time.
Long Term Growth:
Silvertoken is advertising its token as an investment opportunity “for long term growth”. You can hold onto the token as a long-term investment. As Silvertoken’s network usage increases, the value of the silver reserves will increase. This means each token will become more valuable, because it represents more silver than before.
Linked To Real Physical Silver:
Each Silvertoken represents 0.999 fine silver stored in a high security vault. The rate will be set at 1 Silvertoken = 1 ounce of 0.999 pure silver. However, the website mentions that this rate may change over time. “More tokens may be created over time but they will merely represent the purchase of more silver, never diluting the token’s value.” In other words, the company will only issue new tokens when they have more silver.
Silvertoken aims to provide better stability over traditional cryptocurrencies. By linking the value of the cryptocurrency to a real asset, Silvertoken aims to stabilize the value of the token, enhancing its use as a daily currency.
Silvertoken’s development team has outlined a roadmap for the project. The project launched in Q1 2017. Token sales took place in November and December. By January 2018, Silvertoken plans to launch its “silver redemption platform”, with a mobile application and a Silvertoken debit card scheduled to launch later that year.
Where Will Silvertoken Store Its Silver?
Silvertoken does not disclose the location of its physical silver reserves. The whitepaper mentions that all vaults will be Class 3 UL Rated, which means they can withstand 120 minutes of resistance to torches and other destructive tools. Facilities will also be located no more than 5km from an international airport to allow for easy withdrawals and deposits.
In terms of the location of these mysterious vaults, the company claims that they’ll be “located in financial hubs of neutral countries with no import or export tariffs on precious metals.” Those countries would also have no taxes on income, sales, or capital gains.
Silvertoken claims that all silver stored will be insured by Lloyds of London. Several vault and storage companies are listed in the Silvertoken whitepaper, including The Royal Mint, World Mint Gold, The Perth Mint Australia, and Scottsdale Mint. However, it’s unclear how Silvertoken is connected to these companies.
Who’s Behind Silvertoken?
Silvertoken’s website prominently features the images of well-known figures like Ron Paul, Thomas Jefferson, and Robert Kiyosaki. As you may have guessed, former US president Thomas Jefferson has not endorsed Silvertoken. Instead, his image is used on the page with some random quote about the value of silver.
Aside from a few random images, we can’t find any information about the Silvertoken development team available online. Neither the website nor the whitepaper explain anything about who’s building the project.
Not all crypto projects disclose team information. However, combined with the awkward whitepaper and poorly-explained concept, it’s certainly a red flag.
A phone number on the Silvertoken website appears to be based in Orange Park, Florida. However, there’s no further contact information available online.
Silvertoken is an unusual project. The company emphasizes stable prices for its cryptocurrency. However, they’re also telling investors to expect the value of the token to increase. The company claims that each Silvertoken represents 1 ounce of 0.999 fine silver, yet they also claim that the value of the token will rise as more silver is added to the reserve – despite the fact that the ratio isn’t changing.
How can the value of the token change if it’s tied to 1 ounce of 0.999 fine silver? I have no idea. However, there are certainly some unusual things about Silvertoken. The whitepaper is just 10 pages long and explains few technical details about the project. The company refuses to disclose team information or vault locations. We also don’t understand why someone would use a currency that comes with a built-in 1% transaction fee.
Overall, until more information comes online, it’s hard to understand the value behind Silvertoken.