Ary By: Jing Jin
Update: This article previously incorrectly stated that Bitreserve's Gold pricing had changed, it has been modified to include the correct price.
Bitreserve launched last month with the aim of bringing Bitcoin to the masses by allowing users to hold their value in other currencies and thereby circumventing the highs and lows that make Bitcoin a tough sale for those that don't have money to spare.
Now, they are taking things one step further by adding another non-fiat option for their members to hold value in while still having access to the Bitcoin network. Gold is now an option for Bitreserve members and some members (including this writer) were given roughly a dollar's worth of Gold.
Bitreserve, in case you haven't heard, doesn't actually allow users to exchange Bitcoin for their favorite currency or vise versa in the sense that it doesn't deal with bank deposits or other gateways. However, the assets held by Bitreserve, which now includes gold, are actually held by Bitreserve. Its house developed Reservechain allows users to track in real time every obligation and asset held by the Bitreserve company. When they say that a customer has USD $100, they really have USD $100 set aside specifically for for that customer. Likewise, if you own an ounce of gold on the Bitreserve network, they actually have an actual ounce of gold bullion (and not an ETF) held at Gold Bullion International, who I am told is one of the most reputable gold bullion dealers in the world and is used by the Bank of England. Interestingly enough, Gold Bullion International has also acted as a Ripple gateway in the past.
When users decide to convert their Bitcoin to gold, Bitreserve sells the Bitcoin for dollars and then buys gold with those dollars. The entire transaction, including both exchange rates, will be visible on the Reservechain.
A Reddit user pointed out that several other precious metals terms (Bitsilver etc.) have been copyrighted by Bitreserve. We spoke to Bitreserve's President of Global Strategy Tim Parsa who confirmed to us that both Silver and Palladium are in the works to come to Bitreserve. He anticipates that they will be added relatively soon but neglected to speculate on any kind of time frame, citing the complexity involved. As previously reported, Bitreserve is also planning to launch hundreds fiat currencies soon.
There have been other attempts to combine Bitcoin and gold in the past. None of them, however, came with Bitreserve's Reservechain and Bitledger, giving users complete transparency. Perhaps even more important: it also brings Bitcoin's core abilities to gold.
Gold has a lot of advantages over paper money. And it is these advantages that give it value. However, purely as a currency, gold has a lot of flaws as well. It isn't easily transferred from user to user, it isn't easily dividable and it isn't easily transportable. Users can spend bitcoin directly from their gold card, albeit at the relatively high exchange rate of 1.95% (compared to Bitreserve's other exchange rates of 0.45 %) send any amount of gold through the Bitreserve system to other members free of charge. Sending gold cost a higher 2.45 % but is still a better option than trying to spend gold through traditional methods.
Still, with the higher exchange rate, it seems unlikely that many will use it as a wallet designed to buy things with, considering that Bitreserve's own fiat and BTC cards are more efficient at it. However, it is nice to have the ability to spend any or all of your money regardless of what form it is stored in.
We spoke to Tim Parsa, President of Global Strategy at Bitreserve
“So many people love gold as a store of value. But up until now, holding gold value has been a huge pain, whether it is purchasing gold directly and actually holding gold coin or gold bullion which is not only difficult to do but also unsafe to have a bunch of gold in your house. Or you are buying gold via ETFs (Exchange Traded Funds) [. . .] that is problematic for a couple reason because one, your gold value is constantly dwindling because they put administrative fees against the value of the gold they old and secondly you can't spend an ETF [. . .] Now, you can hold gold in the cloud and send Bitcoin to somebody from [your gold card.] So we are bridging of this ancient form of value and bringing it to this revolutionary new form of value, and that is what BitGold is all about.”
There is also the investment side of it. I now own a small amount of AU (gold) on the Bitreserve system. While a few companies have made it possible to purchase gold using bitcoins, Bitreserve is extremely accessible and brings along with it many advantages. Bitcoin is opening up investment opportunities to those who would be unlikely to have the opportunity otherwise.
As Bitreserve adds more commodities it is quickly becoming a leader in that space and not just as a site that lets Bitcoin users avoid Bitcoin volatility. One of the biggest impacts Bitcoin is that it is breaking down barriers to entry. Bitreserve seems to understand that and they want to be the company that tear down those walls.
We will have more from Bitreserve as it breaks.
Did you enjoy this article? You may also be interested in reading these ones:
- Halsey Minor's Bitreserve Is Designed To Fix Bitcoin Volatility, But It Is Doing Much More
- You Can Now Use Ripple to Buy, Spend and Trade Gold
- Trade your Gold for Bitcoin by Mail