BitGold is a new online payment processor, sort of like PayPal, where your funds, transactions and savings are backed by physical gold instead of being just a number on the screen. The gold you own is stored in one of more than ten vaults around the world and if you want, you can redeem your physical gold at any time in the form of bullion. Founded in 2014 by Roy Sebag (former head of PayPal Canada) and Josh Crumb, BitGold is currently operating in 166 markets with over 320,000 registered accounts and growing.
What’s the significance?
The first I heard about BitGold was from a banner advertisement on some unknown website so my mind was already automatically ignoring it, but then I saw the terms “PayPal” and “former head” so I just had to take a look! What I discovered was pretty exciting- this new financial service is indeed owned by a well known guy, Roy Sebag, who was indeed the head of PayPal Canada.
I did some more research and found that one of the first investors that helped BitGold get started was Alexander Soros, the son of George Soros, who is a well known investor and currently among the top 30 richest people in the world. That’s significant because these guys know how to play the game unlike the owner of Liberty Reserve, for example. In fact my first thought was that BitGold was the new Liberty Reserve, but upon reading these facts, it’s pretty safe to say it’s not.
Back to the gold standard
Fiat currency is pretty much useless and is currently only backed by the fictional value we assign to it. The governments are printing out more money to deal with financial problems and thus creating inflation exponentially. This means that if you save up some dollars today, in about 10 or so years they are completely useless and have little to no value at all.
Gold is offering a safer alternative to fiat money and although it has its own risks, it’s definitely safer to hold your savings in gold rather than in fiat currency because if you wanted to produce more gold, you’d have to actually go and spend resources on gathering it, instead of effortlessly printing out more and more of it. Makes sense?
The other main reason gold is safer is that human beings have traded with gold since the ancient times when we associated gold with gods and immortality and the value we have assigned to gold has come all this way to modern age and we still see it as a safe heaven in economical crisis (the price of gold always increases in difficult times).
Consider the two facts for a moment and then think why some of the richest people on Earth have suddenly invested so much in BitGold? To me, it’s a clear indication that the economy and fiat currency is about to break down. The signs have been there since 2008 when we first witnessed a crisis that, according to many economists, was the worst since the great depression in the 1930’s. Many economists and billionaires are expecting the next crisis to be far worse than the previous one, and that it could very well collapse the economy completely. It’s coming and there’s nothing we can do to stop it.
Bitcoin’s role in BitGold
The infamous cryptocurrency, Bitcoin, associated with drugs and criminals by the general public, is finally making its way out of the dark depths of the internet and into mainstream use. Companies like Dell, Amazon, Subway, Tesla and many others have started to accept Bitcoin as a form of payment for their services.
Not only that, but Bitcoin has also received huge interest from investors and speculators recently, mainly because Bitcoin can now legally be treated the same way as money and the New York Stock Exchange has listed Bitcoin as an index, bringing even more transparency and trust to the market.
BitGold has realized the potential that Bitcoin has as well and so they now accept new deposits in Bitcoin which basically means that you can buy physical gold with Bitcoins.
Food for thought
We’ve already seen that Bitcoin prices increase exponentially when something bad happens in the financial markets. I’m talking about the recent Chinese yuan devaluation which led to a very strong bitcoin rally.
In essence, Bitcoin is starting to act as a save heaven for investors the same way as gold. It can’t be “printed” and you have to spend resources to make more of it. As time passes we need more and more resources to mine Bitcoins. Notice the pattern here? Now think whether or not there is a hidden agenda behind BitGold’s eagerness to trade your Bitcoins into Gold bullions?
This post was written by ynef