Buying coffee at Tim's with goldSome that have not studied where this is from bring up e-gold etc but the truth is bit-gold has a platform that banks can get behind and other financial firms.
Yes, we all remember e-gold which now supports bit-coin. Mistakes were made there that I am sure will not be repeated here with bit-gold. The biggest mistake they made was not identifing the IP addresses with proper contact information. The Feds did not like that so basicly shut them down. Fake IP addresses used to launder money and for criminal activity.
Bit-Gold is a different kettle. Founders Roy Sebag and Joseph Crumb have started something that I think may take root.
"backed by George Soros, Sprott Inc. and other big-name financiers. "
BMO open to Bitcoin if virtual currency is regulated, reliable, says CEO Bill Downe
From financial post..
"Roy Sebag and Josh Crumb started their business with one simple guiding principle.
“We wanted to be able to go into Tim Hortons and buy a coffee with gold, with our credit card or debit card,” Sebag said in an interview.
“It went from being a hobby of how to do that to this whole company.”
Investors will start to get a better look at their vision on Wednesday, as shares of BitGold Inc. begin trading on the TSX Venture Exchange. It is the culmination of several years of hard work by the founders, and is being backed by George Soros, Sprott Inc. and other big-name financiers. The company has a valuation of more than $30 million.
BitGold is the first serious financial services platform ever built around gold. The online service allows users to buy gold, store gold, and pay for goods and services around the world using gold as the currency. The service has been active for less than a week, but has already signed up thousands of users.
As its name implies, BitGold takes inspiration from Bitcoin. But there are a lot of questions about the intrinsic value of bitcoins. While gold has plenty of non-believers, the metal has been a medium of exchange for thousands of years.
Sebag and Crumb, who are 29 and 35 respectively, got the idea for BitGold shortly after the financial crisis in 2008. Sebag was a hedge fund manager at that time, and the collapse of Lehman Brothers made him alarmed about counterparty risk. He talked to some mentors about his concerns, and they piqued his interest in gold, which has no counterparty risk.
He never embraced the end-of-the-world ideology so beloved by gold bugs. But he saw the value of using gold as a currency, and he was surprised there was no bank fully backed by gold. He teamed up with Crumb (who has a mining background) around this time, and they got to work creating a financial platform that would make gold more accessible and an easy medium for transactions.
Other people have tried to do something like this in the past, but they were never able to overcome the legal and technical impediments. Sebag and Crumb worked with lawyers and politicians to offer this service under Canadian bailment law. They got the world’s largest bullion banks to connect to their platform, and got Brink’s Company, a leading storage and security company, to serve as clearing house for trades. Through Brink’s, BitGold can track whenever gold owned by its customers moves in and out of vaults.
“It is a complicated (structure). But for the user — and this is the main thing — it’s just Paypal with gold. It’s a nice clean interface,” Crumb said.
After users go through an extensive sign-up process at bitgold.com, they are able to deposit funds and obtain gold stored in vaults in six different cities around the world. After that, they can pay for goods using that gold or redeem physical gold in 10-gram cubes (worth about US$400). Brink’s handles the transfer of the gold between the two parties. BitGold plans to launch a debit card in the next month or two which can be used at any ATM or retail location. That will allow users to buy that Tim Hortons coffee with gold, just as its founders dreamed.
BitGold has a one per cent fee to buy gold and a one per cent fee to redeem it. Storage is free. The founders argued this is a far more attractive fee structure than the popular gold exchange-traded funds, which have annual fees.
Sebag, the chief executive, has been telling the Street that he has a target of 50,000 customers for BitGold. But his hopes are an order of magnitude higher than that. Based on the rapid take-up of the platform in the first few days, he said it appears to be far more than a niche product for a small group of users. He noted that hardcore gold bugs make up less than 10 per cent of the user base so far.
“I’m seeing friends who signed up sending payments to each other,” Sebag said. “I know they bet on football, and now they’re paying each other.”