Bitcoins are widely called “digital gold,” so it's fitting that many
crypto fans like their physical gold, too. Several companies have sprung
up in the last two years to serve this bitcoins-to-gold market.
Why buy gold? Some choose it as a savings instrument, others a
trading commodity, and still others as a fiat-free hedge against crypto
volatility. Whatever your purpose, the following five companies may pop
up onto your radar:
Serica
This
San Francisco-based company was rebranded this year from the name DigitalTangible. They've been called a “
trailblazer in the gold-bitcoin space” for launching the first online gold/bitcoin trading platform last year.
Serica uses
Counterparty tokens (colored bitcoins) to issue “
proof-of-custody”
certificates for the gold, which is held in vaults in either Delaware
(U.S.) or Singapore. Serica doesn't require government papers to use its
services.
Serica also pays bitcoins to sellers who mail them their gold though their Bitcoin4Gold program.
Vaultoro
Joshua Scigala is reported to have lost a chunk of change in
Mt. Gox's collapse, and he went on to found
Vaultoro as a “glass books” bitcoin-gold exchange.
The
exchange
uses three types of bitcoin
wallets. They include “a hot wallet that is
hosted online and used for daily trades, a warm wallet for auditing
purpose that holds an amount of Bitcoin slightly above the amount in the
hot wallet, and finally, mutisignature cold wallets, which hold the
majority of users' funds.”
Vaultoro's vaults are located in Switzerland, and are audited bi-annually by
BDO International.
No government papers are required to purchase through Vaultoro unless
the user buys more than US$5000 worth of gold per day. Services are not
offered to anyone from Iran, Syria or North Korea.
Midas Rezerv
MRCoin is the meta-cryptocurrency (colored bitcoin) of Thailand-based
Midas Rezerv.
One MRCoin represents one gram of gold bullion, stored at one of
several vaults across the world:
Dubai, Amsterdam, or
Hong Kong.
An audit of Midas Rezerv's holdings is regularly published on the bitcoin
blockchain itself.
Midas Rezerv does not act as an exchange, but rather a MRCoin seller
and wallet provider. They require no government papers to use their
service.
Bitreserve
With offices in both San Francisco and Shanghai,
Bitreserve
acts as a counterparty between bitcoins and a handful of
fiat
currencies, including U.S. dollars, yuan and euros. They convert them
back and forth between one another on demand to allow spending in the
currency of one's choice.
Bitreserve claims to have US$1,664,187 worth of currencies in their
vault as of today. This amount is published via their “Reservechain™”
and “Reserveledger™” systems. (Their site does not list the physical
location where these currencies are stored).
And yes, those are trademark symbols you see. Bitreserve claims
ownership of some commonly-used words, including “bitsilver” and
“bitgold.”
A phone number is required to start an account, and government papers
are only required “when certain account limits have been exceeded” or
if you claim residency in China.
BitGold
This Canada-based bitcoin-to-gold reserve service must not have
gotten the memo that Bitreserve owns the word “bitgold.” And still
BitGold manages to offer customers some unique services.
Among them is the BitGold Mastercard, which acts as a debit/credit
card that draws on the customer's gold holdings with the company. They
also have their own ATMs, called BitGold ATMs, which allow the immediate
purchase of gold to one's account within 1% of spot price.
The gold is stored in “Brinks in Toronto, New York, London, Zurich,
Hong Kong, and Singapore among others.” Government papers are required
to use the service.
Golden Opportunities, Etc.
Though it doesn't fit our category of outright owning gold,
BitShares
is worth a mention as it offers gold futures trading. Smart futures
contracts are available in “BitAsset” tokens called bitGold (don't tell
Bitreserve!).
And for those interested in physically holding gold themselves,
Amagi Metals
has been accepting Bitcoin for precious metals since 2012. The Amagi
team are such fans of various cryptocurrencies that beginning in 2016,
they'll no longer accept fiat.
Lastly, remember that whenever you let someone else hold your
property (in this case gold), you're taking on trusted third-party risk.
This means that any of these companies could decide to make off with
your metals in the night. This is where market reputation, due
diligence, and risk management come into play. Don't let a third party
hold anything that you can't afford to lose, and be certain of the terms
of delivery should you ever wish to take physical possession of the
gold.
Did you enjoy this article? You may also be interested in reading these ones
