A bitcoin-wallet service Bitreserve is merging one of the newest innovations in currency with the world’s oldest. The company has recently announced its new service Bitgold that makes it possible for users with physical gold make transactions with bitcoin. Now customers can hold gold in their accounts and convert it into bitcoin to buy goods and services.
“I’ve never had a gold crush before,” said Bitreserve CEO Halsey Minor. “After you go and you’re in that world you can kind of see why people are a little bit crazy about gold.”
Minor considers the integration of gold and bitcoin as the latest step in the company’s push to make bitcoin more mainstream. According to his words, the idea is to allow users to hold their money in the currency they think is most stable, and convert it into bitcoin to make transactions.
Bitcoin itself is too volatile for an everyday customer to use as the only medium for exchange, but the benefits of its payment platform is undeniable to merchants and customers as well.
“People don’t want to hold their currency in a wildly volatile form,” he said. “We allow them to hold value in the way that goods and services are priced.”
Bitreserve collaborates with Gold Bullion International to link its bitcoin currency exchange and payment services with gold.
When Bitreserve was set up, it offered “bitdollars”, “biteuros”, “bitpounds”, etc. When bitcoin is sent to a user’s Dollar Card, the platform automatically converts the bitcoin into fiat currency.
“When your bills are in dollars, you have to hold your cash in dollars, or you’re risking, depending on how much money you have, you’re putting yourself at risk,” said Minor.
Now users can hold their bitcoin as gold and spend their gold as bitcoin. By giving the Bitreserve Gold Card address to whoever is paying, the system automatically transfers the bitcoin one receives into gold at whatever the prevailing transfer rate is.
“One of the reasons we launched gold is because people feel gold is money, not actual dollars,” Minor explained. “We want to turn cryptocurrency into things that people use for commerce. Everything we do is about giving people multiple forms of home currency and comfort in the way they hold their currency.”
Tim Parsa, Bitreserve’s president of global strategy and markets, wrote in a blog post: “With our Gold Card, we are reviving gold for the purchase of goods and services. Bitreserve members can convert their bitcoin to bitgold, whose value is substantiated by bullion in our reserve, but still spend it as bitcoin.”
He continued: “By creating a bridge between the revolutionary Bitcoin protocol and good old gold bullion, we enable our members to instantly send or spend bitcoin from the ounces of gold held in their Bitreserve wallet.”
Bitreserve charges a 0.45% fee to convert currencies like dollars, yuan, yen, euros, and pounds into bitcoin and back again, compared to 8-10% conversion fees from a traditional financial institution. The charges for converting from bitcoin to gold are higher – at 1.95% – because Bitreserve is buying and holding the physical asset.
“We want to let people who live in dollar land or euro land or pound land to go to the world of bitcoin and be able to transact,” said Minor. “Its utility is for exchange.”