For this week’s feature, we will cover ZrCoin, a project that aims to create and distribute a cryptocurrency backed by reserves of zirconium dioxide (ZrO2). It may not seem like much, as tokens are usually related to gold or silver bullion, or other more famous resource, but zirconium dioxide is very well regarded within different industries because of its versatility.
Yet, the question remains if ZrO2 is strong enough of an asset to build a whole cryptocurrency by itself? Let’s take a look at the possibilities of it as a material and then analyze the potential of the project.
Zirconium Dioxide – The Fuel
Despite its confusing name, you probably have used or wore an object related to zirconium dioxide without even realizing it. Its most popular uses are in the field of jewelry, as a faithful and more affordable substitute for diamonds, which can deceive some of the most experienced appraisers. But there are other common uses for it.
In the field of dentistry, zirconia is used as a base for crowns and bridges, and then covered in porcelain for aesthetic reasons. Improvements in the industry have made it possible for monolithic zirconia prostheses to be a viable option, but the aesthetics still have room for improvement.
Probably its most quantity-driven use is as a material for Thermal Barrier Coating (TBC) in jet and diesel engines. Zirconia gains this property of very low heat conductivity in its cubic phase, which makes it easier for the engine to increase its operation temperature (due to reduced loss of heat), which in turn increases the efficiency. This same property is why this compound is becoming popular as ceramic fiber insulation for fuel cell stacks and infrared heating systems, and the one used by gem appraisers to identify single zirconia cubes form diamonds (as diamonds have a very high thermal conductivity).
ZrCoin – The Engine
The main purpose on backing a cryptocurrency on such a material is the instantly available liquidity. ZrO2 is valuable enough for it to hold a cryptocurrency alive, yet its production can be held in a healthy manner as to never run out of the resource.
The funds that were raised during the ICO are going to be used to build a state-of-the-art, environmentally friendly production facility, able to steadily produce ZrO2 with a purity greater than 66%, and will be the pillar that will keep the ZrCoin properly backed by a sufficient, ever-growing supply of the asset.
The company already has agreements with potential purchasers, but they also offer each investor the possibility to exchange their ZrCoin for physical quantities of zirconia or receive the monetary equivalent of their held tokens, around $400,000 per month (as 1 ZrCoin will be equivalent to 1 kg of ZrO2).
Stablecoins are quite an interesting approach to reduce the volatility related to cryptocurrencies in general, and this kind of vision opens a world of opportunities for other entrepreneurs to digitize the production, ownership and sale of a number of valuable resources, and ZrCoin might work as a great example for future projects.