Blog Technology Why we digitize your investments

Why we digitize your investments

date March 18, 2019 time 4 min read 351 views

Money has changed little in the past thousand years. While the world has become more global, mobile, and digital, money has refused to budge. Perhaps because it has been under the control of central banks and governments too big to fail or change.

Whatever the reason, the arrival of blockchain technology has hit the reset button. Now, value itself can be securely digitized, stored, and traded as easily as sending an email. While banks cling to their gilded past, innovators are freeing money and making it more useful.

We believe your money should work harder for you. It should be flexible, globally accessible, and grow at rates worth celebrating. We make your money become digital investments by creating a digital asset to represent it — one that matches the value of the world’s reserve currency, USD. That way, we protect the value of your digital investments and help them grow.

What does digitization mean and why is it important?

Digitization is taking something physical and making it digital. Compare vinyl records and Spotify.  A vinyl record is a physical disk, the grooves in which create sound.

Spotify, on the other hand, stores sound on its servers as bits and bytes, the building blocks of data. Spotify streams that data over the internet and your device (smartphone, smart speaker, and so on) interprets it as sound.

From grooves to data: From grooves to data

Lots of things have been digitized over the years — photographs, software (yes, computer programs used to be programmed by moving levers and switches), movies, newspapers, magazines, calculators, music, typewriters, games, books, even pets. With the rise of the internet, digitization has grown even more popular. Today, almost everything we do touches on digitization — and the benefits are huge.

Digitization means we no longer need to use as many raw materials to create the things we’ve digitized (which saves a ton of time and money). Think of all that plastic, paper, metal, chemicals, and other resources used to create the list above.

But perhaps the greatest benefit of digitization is freedom. Once we’ve digitized something, we can change, move, or otherwise manipulate it easily and at very low cost.

How does digitization of money work?

In many ways, the money we use is already digital. Credit cards as well as services like PayPal allow you to spend money digitally instead of paying cash in person. However, we’ve yet to see banks and other financial institutions leverage digitization to the benefit of its customers.

When you deposit cash into a bank account, for example, your money loses its physical identity and takes on a digital one. In other words, your money becomes numbers on a bank’s electronic database (often managed by IBM mainframes from the 1980s). Your bank then loans out your and others’ deposits (for profit) while ensuring it remains liquid enough to honor any withdrawal requests.

Until the arrival of blockchain, your money was stuck inside this centralized banking system, hobbled by administrative inefficiency and outdated technology. The whole system was designed for a world much less-connected than today. That’s why moving your money across borders is slow and expensive, and banks tend to pay low interest rates unless you take more risk.

Blockchain, on the other hand, is better for the digitization of money in almost every way. It is an immutable, globally distributed ledger, so everyone has access to the transaction history, everyone can submit transactions, and users — not institutions — collectively validate changes. Digital assets created on blockchain are therefore tamperproof, borderless, and leave an indelible audit trail.

How we digitize your investment

We digitize your investment by creating a digital asset on the blockchain that represents your principal and profit. That digital asset is called MyConstant.

Constant’s value matches that of the US Dollar, the world reserve currency. When you invest money into one of our Investment Plans, we create an equal value in MyConstant to match it. When you withdraw your principal and profit as fiat currency, we destroy your MyConstant. Therefore, the value of MyConstant always remains the same, and your principal is protected against inflationary devaluation.

Constant lives on the Ethereum blockchain, which is distributed across the world, much like the internet. Since Ethereum is peer-to-peer, there are no third parties getting in the way — not even us — so no additional layers of cost or complexity. And since anyone on the network has access, you can send MyConstant to anyone, anytime, near-instantly, and for zero cost.

While your digital investments on (Constant) grow, your principal lies in the MyConstant Vault — a trust fund managed by Prime Trust, an accredited US financial institution. Prime Trust is a recognized authority in the escrow business — they’re regulated under US law, and your investment is FDIC-insured to $250,000. 

I must stress that we cannot access the MyConstant Vault. Everything is managed by a smart contract — a program on the blockchain that performs an action once certain criteria are met. Our smart contract issues new MyConstant, burns withdrawn MyConstant, and manages the transfer of your principal and profit into and out of the MyConstant Vault.

Why is the smart contract important? Well, for one, it means we can’t ever run off with your money (not that we’d want to!). It also ensures the supply of MyConstant matches the value inside the MyConstant Vault. But crucially, it means you can withdraw, invest, or transfer MyConstant at any time of day, from any place in the world, and at extremely low cost. All you need is an internet connection. 

Digitizing Money makes it possible to transcend its physical roots to become more mobile, global, and useful. And this is a good thing for a world that continues to connect in new and exciting ways.

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Chris Roper

Chris Roper

Communications Manager

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