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NOTE:
In the first 8 hours since this article was published bitcoins have climbed
from $13.75 to 14.30 or up 4%. If you are a Bitcoin supporter, whether a
GoldMoney customer or not, then please submit the survey to show potential
market demand.
You would think anyone who claims to be an expert in money and
currency would immediately see the potential synergies and therefore it is
really surprising that GoldMoney has not already integrated with Bitcoin.
Being a GoldMoney customer and Bitcoin advocate,
on 9 Jan 2013 I received an interesting email from GoldMoney that has a
surprisingly positive portent. First, it announced the new vault in Singapore
(Whoop dee doo, how innovative!) and second it requested customer feedback
via the anonymous Annual Survey for 2013.
Near the end of the survey I came across significant areas regarding
Bitcoin and its potential integration with GoldMoney. Since I started
publicly recommending Bitcoin in 2010 and have been a GoldMoney supporter
longer therefore it makes sense that they may be reading my articles or Jon
Matonis’s What’s Your Bitcoin
Strategy?.
THE GOLDMONEY ANNUAL SURVEY
The annual survey requests:
Please take the chance to tell us what you expect from us in the
future by clicking on the following link to access the GoldMoney
Annual Survey 2013. It takes just 3-5 minutes to complete and
will be accessible until 31 January 2013. …
12. How much are you interested in using Bitcoin for online transactions?
…
13. Please specify below which Bitcoin functionality you would like to
use:
Use Bitcoin to buy precious metals with Goldmoney
Use GoldMoney to store Bitcoins in a secure wallet
Other
On 20 Dec 2011 I received an ominous email from GoldMoney
announcing the economic censorship of the payment mechanism.
Due to this growing trend of regulation we have decided to suspend
the following services until further notice with an effective date of
the 21st January 2012:
* The facility to make and receive payments in precious metals to or
from other GoldMoney Full Holding customers.
* The facility to convert directly between the various currencies.
To put it simply: Your gold, silver, platinum and palladium held
via GoldMoney can be frozen or confiscated.
WHY YOUR ASSETS ARE NOT SAFE AT GOLDMONEY UNTIL
THEY ALLOW BITCOIN WITHDRAWALS
Based on the survey requests it seems obvious that GoldMoney is completely
missing the point of Bitcoin. Bitcoin is the first digital currency that is
censorship-resistant. In other words, if for whatever reason, justified or
unjustified, some petulant brat in a costume provides a sheet a
paper with an order on it to take all the gold, silver, etc. that previously
was titled to you then GoldMoney will rollover and give them the gold.
To put it simply: Your gold, silver, platinum and palladium held via
GoldMoney can be frozen or confiscated. However, when you properly store
bitcoins, and I teach you how in The Free Bitcoin Guide, they
can never be frozen or confiscated.
But if GoldMoney allowed you to buy bitcoins and withdraw them then your
metals would no longer be at much risk because within about 24 hours you
could exchange them into bitcoins and withdraw to a wallet. Then the value
would be immune to freezing or seizing.
Just use Bitcoin, which is the currency on the Internet. – Rush Limbaugh
HOW GOLDMONEY SHOULD MOVE FORWARD
Ironically, the questions in GoldMoney’s survey imply they are looking at
this issue of integrating with Bitcoin the wrong way. There is another option
which would be the least expensive way to integrate Bitcoin, would add the
greater value to customers and generate tremendous revenues for GoldMoney.
GoldMoney should not be seeking to bring bitcoins into GoldMoney
customer’s holdings to buy metals. For several reason, GoldMoney should be
looking to free customers by allowing them to withdraw bitcoins from their
holdings to wallet’s outside GoldMoney’s control.
First, the customer is king and people want to be free
with their money. They want the option to stand free and independent without
any third-parties or middlemen between them and it. They want it to be
sovereign. This is the allure of gold and the old saying, “If you don’t hold
it you don’t own it.”
Not only is it the right thing to do but there is a ton of money to be
made running an underground railroad from fiat currencies
and over-leveraged politicized banks to non-politicized
decentralized digital censorship-resistant currency. Just think if those
customers, who currently hold $2.2B of assets with GoldMoney, were able to
instantly buy bitcoins. A $2.2B market cap for bitcoin implies a price per
bitcoin of about $200 or a gain of about 1,400% from current prices.
Second, the main issue with bitcoins for a company like
GoldMoney or any bank has to do with the source of funds. GoldMoney
already performs all the necessary Anti-Money Laundering and Know Your Client
due diligence required by regulated financial institutions.
If GoldMoney starts off only allowing customers to buy bitcoins and
withdraw bitcoins they buy from GoldMoney then they do not need to worry
about the source of funds because the only way to fund the holdings is with
wire transfers where GoldMoney is already incurring the AML/KYC fees.
GoldMoney can acquire bitcoins from a few trusted sources, like the large
exchanges, and remain within the safest legal areas without incurring any
additional costs.
Third, despite gold
collapsing against Bitcoin in 2012 they still remain an extremely
speculative asset. Sure, they have performed extremely well but that is
no guarantee of future performance. Although bitcoins, like gold,
are not subject to counter-party risk the holding bitcoins is not necessarily
a very safe strategy. Bitcoins could become completely
worthless. After all, that is why one buys gold instead of silver; gold
is the penultimate store of value.
Fourth, the payment business is heavily regulated and
those regulations are constantly changing. As GoldMoney has already
discovered, that industry is a real pain in the rear end because of economic
censorship.
But there is one person who gets it; Erik Voorhees, who was invited in
Sept. 2012 by the Brazilian Central Bank to
present about Bitcoin and other attendees such as several
Federal Reserve officials, the SWIFT Director of Brazil’s
office, Santander, BM&F Bovespa, PNC Bank, National Bank of Canada,
HSBC, and a high-level representative from Chile’s equivalent of the ACH
system.
My take away from this last session was the revelation that Bitcoin
eviscerates entire statutes of law. Bitcoin will result in a number of “legal
impotencies,” while simultaneously offering an alternative to the business
and money that is being stifled by these same laws in the normal economy
Then in Oct 2012 the European Central Bank released a 55 page report and focused about half of it on
Bitcoin. It appears that this scrappy upstart censorship-resistant digital
currency is sure getting more attention than it deserves.
Fifth, bitcoins are currently legal in all countries and
have not been made illegal by any. A French court has even ruled that a bank
must reinstate banking services to a Bitcoin exchange after the bank froze
the account because they did not want to be facilitating money laundering.
How particular businesses interact with Bitcoin can result in some
interesting legal uncertainties and these likely will not be
resolved for a long time. But the suggested method of moving forward for
GoldMoney would not be materially different from current practices.
Allowing customers to buy bitcoins and withdraw them is not materially
different from GoldMoney’s current business of allowing customers to buy gold
and take physical possession. After all, the customers own title to the gold
and can take possession at will (perhaps to only a specific address
previously authorized for the account via a signed document sent by the
customer to prevent any potential fraud, compromise, etc.) and so likewise
would presumably own title to the bitcoins and should be able to take
possession at will.
Sixth, once customers have bitcoins in their possession
then they can avail themselves of the Bitcoin payment mechanisms. Just like
Erik explained to the Federal Reserve attorney presenting on Dodd-Frank bill
Section 1037 so likewise this strategy would allow GoldMoney to disentangle
from the payments related regulation.
Think of all the attorneys that will be out of work when GoldMoney no
longer needs to worry about thousands of pages of relevant law in many
different countries that is constantly changing.
CONCLUSION – WHAT YOU CAN DO
So, this email requesting input for the Annual Survey was very
encouraging. If GoldMoney integrated with Bitcoin then it would likely be the
ultimate tool for standing free and independent with your money. Plus, it
would give them a competitive advantage over BullionVault
and its other competitors.
Really, you would think anyone who claims to be an expert in money and
currency would immediately see the potential synergies and therefore it is
really surprising that GoldMoney has not already integrated with Bitcoin.
What can you do? Well, the Annual Survey is anonymous, takes about 3-5 minutes
to complete and does not close until 31 JAN 2013. So, I would recommend you
complete the survey along with the suggestion to “Integrate with bitcoin and
begin by allowing me to buy bitcoins and withdraw them to a wallet.”
If you are not currently a GoldMoney customer then I suppose you can still
complete the Annual Survey because it is anonymous. Plus, you can always open a GoldMoney holding for free and send the customer
support a question about when they will integrate with Bitcoins.
SOME INTERESTING BITCOIN RELATED VIDEOS
15 SEP 2012 – I discuss some of the basics of Bitcoin.
20 SEP 2012 – James Turk discusses Bitcoin and gets hung up on whether Bitcoin is tangible;
which it is, just not corporeal.
25 NOV 2012 – Chris Odom discusses how Bitcoin is universal glue.
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