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BitGold Announces a Bitcoin-like System for Gold Storage and Payments

Op-ed - BitGold Announces a Bitcoin-like System for Gold Storage and Payments

BitGold Inc. has announced the public launch of the BitGold platform, a software service that connects gold storage with payment networks, resulting in a banking-like platform for gold.

The announcement refers to the BitGold platform as a “new global operating system for gold.” In fact, BitGold is a digital payments platform that connects gold stored in real-world vaults with online payments.

Though the BitGold press release emphasizes that BitGold is not a cryptocurrency like bitcoin, there are similarities. In particular, the BitGold platform allows for the quick settlement of gold trades so that a users’ gold is easily acquired and accessible across various payment networks such as SWIFT, Visa, MasterCard, Interac, SEPA, UnionPay, Discover, American Express and others – including bitcoin.

BitGold payment fees are higher than those of bitcoin payment processors but lower than most alternatives.

Thus, BitGold provides some of the advantages of bitcoin payments – faster and cheaper digital cross-border transactions – combined with the advantages of gold as a store of value, and can be seen as a Bitcoin-like system for gold. BitGold seems likely to become an appealing option for those who trust gold more than bitcoin.

The BitGold website states that the company views gold as a security switch for a world that is increasingly digital, and implemented security features to protect users’ accounts and identities, such as secure vaults, full insurance with Lloyds of London against theft or loss, military-grade encryption (RSA 4096 and AES256) to secure users’ accounts and personal information, and multi-factor authentication measures.

BitGold claims that it offers the most competitive rates in the industry for buying and selling gold, and is the only platform that allows users to spend from their gold account.

“At BitGold we have a mission to democratize global access to gold for stable savings, and to make gold useful in micro-transactions using the Internet or mobile phones,” said co-founder and Chief Strategy Officer, Josh Crumb. “No matter where you live in the world, gold has held value over time relative to costs like food and energy that we require as humans, making it one the most important savings tools for most of the human population. We believe that by broadening access to a commodity-money that holds value we can help combat the rise in wealth inequality and the short-termism.”

BitGold is a Canadian corporation with offices in Toronto and Milan and a network of secure vaults for gold storage, operated in partnership with The Brink’s Company, a global leader in security-related services for banks, retailers and a variety of other commercial and governmental customers. Users can choose where in the world they want their gold physically stored. The company’s financial statements are audited by PriceWaterhouse Coopers.

BitGold accounts are free and can be opened in minutes. New users are provided with a secure vault account to purchase and hold gold, the ability to make and receive instant gold payments, and a debit card for spending gold at traditional points of sale. Customers can fund their accounts with local-currency by using a network of ATMs. BitGold will not initially be available to U.S. residents, and will be unavailable to residents of sanctioned countries.

“We are excited to unveil the BitGold platform, an architecture and technology that’s taken years of careful planning and execution, which now allows users to seamlessly use gold again as a store of value and medium for payments,” said co-founder and CEO Roy Sebag.

“As a global asset, gold is recognized in nearly every culture as a long-term protector of value, but has been a poor medium of exchange compared to the advances in money technology,” Sebag said. “We felt that gold needed the modernization and mobilization that’s now happening in the global payments revolution. We have built a financial services platform that is as close to being counterparty-free as possible, enabling economic transactions within the existing global financial system to be settled in full reserved gold bullion.”

The term “BitGold” may be confusing because it is also used by Bitreserve. Previously, it was used by cryptographer Nick Szabo for the cryptocurrency that he proposed before Bitcoin.

Old Vault Door / CC BY 2.0