To be a good investment, digital gold must combine physical and digital security – both cryptographic security and the physical security of a bullion vault. But as an investor, it is worth understanding what keeps your investment secure in more depth. Here, we’ll look at both, starting with the digital security.
Securing your digital gold
Digital gold tokens are secured on blockchains, a mechanism of encryption that uses a combination of cryptographic hashing and consensus protocols to provide best-in-class security. A blockchain is often described as a distributed, immutable ledger. It is distributed in that all transactions are publicly recorded, and each user keeps their own copy of the ledger – there is no ‘master copy’ that can be referred to. And it is immutable in that each block contains a hash (a summary) of the previous block, meaning transactions, once agreed upon, are irrevocable and tamperproof, since changing any single previous transaction would mean altering every subsequent transaction. This means that once they reach a certain mass, blockchains become un-hackable.
DuBois’ products, DAU and KBAR, are built on the Ethereum blockchain, the world’s largest and most robust. The Ethereum blockchain supports ‘smart contracts’, which are small computer programs intended to execute and document specific actions according to a pre-specified agreement. For example, smart contracts allow our clients to sell their gold easily. conveniently, and privately, via Peer-to-Peer transfer. As a DuBois client, you have a digital ‘wallet’ (identified by an address) on the Ethereum network, which holds the (encrypted) keys that secure your digital gold.
Secure mobile access to your wallet is provided via our DAU Vault mobile app. This is a ‘self-custody’ wallet that gives you full control of your digital assets, while being straightforward and easy to use. Self-custody means that you remain in full control of the private keys to your digital gold – DuBois does not have any access to them. The private key is what you use to authenticate that you are the legitimate owner of the wallet, and you wish to conduct a transaction on the Ethereum network. You can view real-time prices for all the digital assets in your portfolio, send and receive the assets, and verify your title to them. If desired, you can also use other secure wallet apps such as MetaMask, though we strongly recommend you use only the most reputable providers.
Alongside DAU Vault, we also provide a physical hardware wallet called DAU Key, which secures your private keys. This pairs seamlessly with DAU Vault and is a discreet and convenient way to add another layer of security to your digital assets. About the size of a credit card, DAU Key is a ‘cold wallet’ (also known as ‘cold storage’) that provides secure key management. A ‘cold wallet’ simply refers to offline storage of the private keys to a digital asset, i.e. storage which is not connected to the internet, meaning it is impossible for bad actors to gain access. Since private keys are the method by which identity is proven and ownership verified on the Ethereum network, it is critical to keep them securely. By keeping your private keys on the DAU Key, you ensure that any movement of your assets on the blockchain must be authenticated by the DAU Key. As well as being un-hackable, this eliminates the need for passwords. Once paired, you can access your wallet simply by tapping your DAU Key to your phone, similar to a contactless credit card payment. The DAU Key uses a EAL6+ chip, the highest standard in chip security. Both DAU Vault and DAU Key are provided by Tangem, a globally recognised cold storage provider, who have issued over 1,000,000 cards since 2018, with no reported cases of hacking. You can also create one or more backup cards, meaning you don’t need to worry in the event a card gets lost or damaged.
If you do not wish to have personal custody of your keys, you can entrust your titles to a third-party service, and we offer access to several via our network of resellers and distributors, as well as DuBois’ sister company, Lexim Gold. They will remove the hassle of personally managing keys and ensure your assets are available when needed.
Finally, if you wish to use a web platform, Lexim’s state-of-the-art trading platform has multi-factor authentication (MFA) and cutting-edge cybersecurity measures. We also maintain strong operational controls to secure client information and prevent unauthorised access to our systems.
Security of the physical bullion
Our clients’ physical bullion is sourced exclusively from a small number of refiners on the Good Delivery List of the London Bullion Market Association (LBMA), the gold market’s most prestigious trade body. It is fully insured and stored in Swiss vaults administered by an independent third party and audited monthly for fineness and purity by a reputed assayer.
Our clients always have full control over their gold and can track any aspect of their bullion using our gold allocation tracker tool, right down to the serial number, provenance and exact specification. Additionally, and unlike many of our competitors, neither DuBois nor the storage provider maintains any lien or financial claim over the gold whatsoever.
It is also worth emphasising that our digital gold products are quite different to so-called ‘gold backed tokens’, which are usually structured as claims over an issuer (i.e. an arms-length investment), rather than over physical bullion. This issuer will typically then invest the gold to earn a return, for example by making gold denominated loans. However, the physical bullion in DuBois’ custody always remains our clients’ property and is never pledged or loaned. The amount of bullion we physically hold we always be exactly equal to the number of titles issued across DAU and KBAR.
We also strictly segregate client and firm assets and funds. This means that, even in the unlikely event that DuBois were to close, our clients would remain the legal owners of their bullion and could take physical possession as convenient for them.
Conclusion
Combining the Ethereum blockchain with LBMA-accredited vault storage, allows DuBois to set a high standard as a leading provider of digital gold. We take great care in building and maintaining a multilayered system of security that gives our clients complete peace of mind and is robust to hackers, fraudsters or other bad actors, while still ensuring their gold is readily accessible.
To be a good investment, digital gold must combine physical and digital security – both cryptographic security and the physical security of a bullion vault. But as an investor, it is worth understanding what keeps your investment secure in more depth. Here, we’ll look at both, starting with the digital security.
Securing your digital gold
Digital gold tokens are secured on blockchains, a mechanism of encryption that uses a combination of cryptographic hashing and consensus protocols to provide best-in-class security. A blockchain is often described as a distributed, immutable ledger. It is distributed in that all transactions are publicly recorded, and each user keeps their own copy of the ledger – there is no ‘master copy’ that can be referred to. And it is immutable in that each block contains a hash (a summary) of the previous block, meaning transactions, once agreed upon, are irrevocable and tamperproof, since changing any single previous transaction would mean altering every subsequent transaction. This means that once they reach a certain mass, blockchains become un-hackable.
DuBois’ products, DAU and KBAR, are built on the Ethereum blockchain, the world’s largest and most robust. The Ethereum blockchain supports ‘smart contracts’, which are small computer programs intended to execute and document specific actions according to a pre-specified agreement. For example, smart contracts allow our clients to sell their gold easily. conveniently, and privately, via Peer-to-Peer transfer. As a DuBois client, you have a digital ‘wallet’ (identified by an address) on the Ethereum network, which holds the (encrypted) keys that secure your digital gold.
Secure mobile access to your wallet is provided via our DAU Vault mobile app. This is a ‘self-custody’ wallet that gives you full control of your digital assets, while being straightforward and easy to use. Self-custody means that you remain in full control of the private keys to your digital gold – DuBois does not have any access to them. The private key is what you use to authenticate that you are the legitimate owner of the wallet, and you wish to conduct a transaction on the Ethereum network. You can view real-time prices for all the digital assets in your portfolio, send and receive the assets, and verify your title to them. If desired, you can also use other secure wallet apps such as MetaMask, though we strongly recommend you use only the most reputable providers.
Alongside DAU Vault, we also provide a physical hardware wallet called DAU Key, which secures your private keys. This pairs seamlessly with DAU Vault and is a discreet and convenient way to add another layer of security to your digital assets. About the size of a credit card, DAU Key is a ‘cold wallet’ (also known as ‘cold storage’) that provides secure key management. A ‘cold wallet’ simply refers to offline storage of the private keys to a digital asset, i.e. storage which is not connected to the internet, meaning it is impossible for bad actors to gain access. Since private keys are the method by which identity is proven and ownership verified on the Ethereum network, it is critical to keep them securely. By keeping your private keys on the DAU Key, you ensure that any movement of your assets on the blockchain must be authenticated by the DAU Key. As well as being un-hackable, this eliminates the need for passwords. Once paired, you can access your wallet simply by tapping your DAU Key to your phone, similar to a contactless credit card payment. The DAU Key uses a EAL6+ chip, the highest standard in chip security. Both DAU Vault and DAU Key are provided by Tangem, a globally recognised cold storage provider, who have issued over 1,000,000 cards since 2018, with no reported cases of hacking. You can also create one or more backup cards, meaning you don’t need to worry in the event a card gets lost or damaged.
If you do not wish to have personal custody of your keys, you can entrust your titles to a third-party service, and we offer access to several via our network of resellers and distributors, as well as DuBois’ sister company, Lexim Gold. They will remove the hassle of personally managing keys and ensure your assets are available when needed.
Finally, if you wish to use a web platform, Lexim’s state-of-the-art trading platform has multi-factor authentication (MFA) and cutting-edge cybersecurity measures. We also maintain strong operational controls to secure client information and prevent unauthorised access to our systems.
Security of the physical bullion
Our clients’ physical bullion is sourced exclusively from a small number of refiners on the Good Delivery List of the London Bullion Market Association (LBMA), the gold market’s most prestigious trade body. It is fully insured and stored in Swiss vaults administered by an independent third party and audited monthly for fineness and purity by a reputed assayer.
Our clients always have full control over their gold and can track any aspect of their bullion using our gold allocation tracker tool, right down to the serial number, provenance and exact specification. Additionally, and unlike many of our competitors, neither DuBois nor the storage provider maintains any lien or financial claim over the gold whatsoever.
It is also worth emphasising that our digital gold products are quite different to so-called ‘gold backed tokens’, which are usually structured as claims over an issuer (i.e. an arms-length investment), rather than over physical bullion. This issuer will typically then invest the gold to earn a return, for example by making gold denominated loans. However, the physical bullion in DuBois’ custody always remains our clients’ property and is never pledged or loaned. The amount of bullion we physically hold we always be exactly equal to the number of titles issued across DAU and KBAR.
We also strictly segregate client and firm assets and funds. This means that, even in the unlikely event that DuBois were to close, our clients would remain the legal owners of their bullion and could take physical possession as convenient for them.
Conclusion
Combining the Ethereum blockchain with LBMA-accredited vault storage, allows DuBois to set a high standard as a leading provider of digital gold. We take great care in building and maintaining a multilayered system of security that gives our clients complete peace of mind and is robust to hackers, fraudsters or other bad actors, while still ensuring their gold is readily accessible.