LessThunk: Paul Tustain, founder and CEO of Bullionvault wrote his analysis on why he thinks that bullionvault is a much better deal than Bitgold/Goldmoney. He doubts that Bitgold can continue to offer free gold storage, transaction costs with Goldmoney/Bitgold are higher, and he does not believe in their business strategy. We personally used all of them and at the time preferred Goldmoney, because of the jurisdiction (Jersey, channel islands vs London (Bullionvault)).
The UI of goldmoney is easier, but Bullionvault gives you more power. If Bullionvault supported BTC for funding or withdrawls, they would be on par with Bitgold in that popular sector.
— from his article —
Bitgold expansion plans
Those BitGold expansion plans need a closer look too. BitGold is a brand new ‘development stage internet technology business’ (see the BitGold: Listing Application, TSX Venture Exchange, 8 May 2015) with a remarkable stock market rating.
Its CEO, Roy Sebag, has brought with him laudable enthusiasm for gold, and bitcoin, and heaps of financial talent, but his company appears to be planning to offer an amalgamation of three ideas, one of which has long been done cheaper elsewhere, by companies with a much more solid base than he can offer, and two of which have already failed.
- BitGold offers you the chance to buy and own gold. According to the BitGold website the net round-trip cost, in and out of gold, is 2%. This is not exceptional value. BullionVault’s gold round trip costs 1%, and that reduces fast above $75,000. (I am still unclear on BitGold’s storage fee proposition and how it will work for GoldMoney users in the long term).
- BitGold also anticipates you will use the service to deal in gold, currencies, and bitcoin. The problem with this trading idea is that it has been tried very recently by Netagio – then a subsidiary of GoldMoney – and it failed. We gold owners are a fusty lot, and after 4 months Netagio had little customer interest. Originally financed by GoldMoney and launched in summer 2014 the service was quietly closed in February 2015.
- And finally BitGold believes you will choose to make gold backed payments, or even go shopping with a special Visa card, both of which will deplete your gold holding as you spend. GoldMoney itself (again) tried providing a pay-with-gold function, and gave up when they came up against the practical truth of Gresham’s Law: “Bad money drives out good” (from circulation).