Today we consider BitGold. We don’t ask whether you should run away – but how fast.
As someone who’s seen what Vancouver is capable of, this has set all my alarm bells off. There’s been a lot of hype and now somebody is selling. There’s an expression for that.
Given all this, my view is that BitGold’s founders, Roy Sebag and Josh Crumb, don’t properly understand gold. ...
If BitGold’s founders knew their bitcoin history, they would not have named the company thus. It is yet another factor that makes me worry that this is little more than a gimmick. ...
In short, there is a huge amount of success already priced in here, based on little more than a superficially persuasive idea. As soon as the hype dies out, a lot of money is going to get made shorting this one – and a lot of money lost by those who were taken in.
BitGold is not a “bitcoin company” – if you need a comparison, it is much more “PayPal” than “bitcoin”, but BitGold can be better understood as a “digital gold” company, which of course is what GoldMoney invented and patented.
There exists vast potential for changing online payments, and in my view, BitGold has the right people and resources to take advantage of this potential to the benefit of its customers and shareholders. ...
Importantly, the opportunity to change online payments exists, notwithstanding your concern that metal payments years ago never took off. Nor for example, did ATMs, which existed for many years before bank customers finally understood their many benefits. The point is that customer adoption in financial services often comes slowly; it is a natural response because people do not want to take risks with their money. ...
In 2013, I retired as chairman of GoldMoney, but have remained a member of the board. Once this transaction closes, I will join the BitGold board with two fellow GoldMoney directors, Hector Fleming and Mahendra Naik.
I encourage everyone to Sign Up for a BitGold Account. I have done so myself. ...Conclusion
Due to my long-standing relationship with GoldMoney, many readers have asked what the purchase of GoldMoney by BitGold means.
After careful review over the past couple weeks with both James Turk, founder of GoldMoney, and Roy Sebag, the co-founder of BitGold, I am pleased to report the news is 100% positive. ...
Seldom does one plus one equal three, but that idea makes sense here. I back promotion of gold as a currency, and BitGold has the resources and institutional backing to do it properly. Attempts by others have failed or languished.
As a publicly traded company with an innovative business model this could be a very interesting speculation. For example, PayPal's $45 billion valuation is 30 times what eBay originally paid for the company in 2002 and it earned about $419 million in net income during 2014.
Nevertheless, potential customers should keep in mind that this is a new and unproven service provider with significant legal questions that do not appear to be definitively answered with a CEO who actively endorses its use for highly regulated activities like online gambling.
It would be unfortunate if this ended up like e-Gold which resulted in the largest digital currency money laundering case of all time or MtGox where customers lost approximately $500m of funds.
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