A new gold rush?

[Bit]coin flipping: BitGold shaping up to be more than a shiny toy

Gabriela Motroc
BitGold
Gold bars image via Shutterstock

The current financial reality has made it tough for savers to preserve their habits, but one detail is giving them hope: gold is up nearly 20 percent in 2016 and BitGold is riding the wave of success. This Canadian payments platform announced in early April that BitGold clients currently own almost a tonne of gold.

Canadian-based FinTech company BitGold is riding the wave of success as clients now own nearly a tonne of gold. Although BitGold executives praised Bitcoin for raising awareness about alternatives to the central banking system during a March briefing, they distanced the startup from the famous cryptocurrency and emphasized that the young company has nothing to do with Bitcoin. BitGold clients are credited with gold, stored in vaults at locations in major global financial centers.

BitGold’s business proposition appears to be lucrative — this FinTech company which allows users to buy, save and make payments in physical gold bullion is often compared with FinTech giant PayPal, especially since the startup’s chief executive officer is a former PayPal executive.

How BitGold works

First, BitGold clients buy the gold for a fee of one percent of the metal’s spot price. Second, they select the currency in any amount and third, they choose the Brink’s vault location. One of this company’s biggest advantages is that the metal is insured by The Brinks Company, a global leader in security-related services for various types of clients, against theft or loss, so clients sleep well knowing that their savings are protected.

BitGold’s goal is to make owning and spending gold in a tax-compliant way. According to the startup’s description, users can make and receive instant gold payments, as well as use their prepaid cards to spend gold at traditional points of sale or convert their gold balance to local currency at any ATM machine.

Similarities between BitGold and Bitcoin

Although BitGold is trying to distance itself from Bitcoin, one cannot deny that there are certain similarities. First of all, the platform created by the Canadian-based startup allows for gold trades’ fast settlement so that a client’s gold can be easily acquired and accessible across a wide range of payment networks —including MasterCard, SWIFT, Visa, American Express, Discover and Bitcoin.

BitGold is seen by some clients as a Bitcoin-like system for gold because it offers the same advantages, namely fast and cheap digital cross-border transactions. However, the biggest similarity is the name—the term ‘Bit gold‘ was previously used by Nick Szabo, a computer scientist, legal scholar and cryptographer, for the digital currency he proposed before Bitcoin. “Bit gold may provide us with a money of unprecedented security from these dangers,” Szabo wrote in late 2008.

Not a new idea

BitGold may be the first business of this kind to reap the benefits of making gold more accessible, but it is not the only company which tried to combine blockchain with gold. Other businesses which tried (and failed) to bring gold and blockchain together are Amagi Metals, DigitalTangible and Bullion Bitcoin.

Small wins

BitGold announced in early April the launch of BitGold Business Accounts; the new technology includes payment applications which will encompass invoicing, payroll, e-commerce and checkout solutions. “We’re obsessed with injecting efficiencies into global commerce, so we created a better way for people and now businesses to take advantage of the benefits of using gold safely and securely using our network,” Darrell MacMullin, CEO of BitGold, announced.

Besides the newly-launched Business Accounts, the Canadian-based FinTech startup also offers Invoices (invoice international customers with a completely customizable template in the currency of choice) and Pay (embedded checkout payment flow optimizes international e-commerce).

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Author
Gabriela Motroc
Gabriela Motroc is an online editor for JAXenter.com. Before working at S&S Media she studied International Communication Management at The Hague University of Applied Sciences.

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