DigitalTangible has launched a new precious metals service that aims to target gold bar and coin owners who may be considering the digital currency market.
Called Bitcoin4Gold, the service allows verified users to mail physical gold to its dealer network, which can then be exchanged for bitcoin, litecoin, dogecoin or darkcoin.
The product is the latest from crypto 2.0-powered gold and bitcoin trading service DigitalTangible, which launched its exchange service in September. DigitalTangible allows users to move between bitcoin and gold, and to receive cryptographic tokens that represent physical gold holdings.
founder Taariq Lewis said that his company is betting that the time is right to open a new channel for gold owners that want to get in on bitcoin, given that the market has recently seen multi-year lows.
Lewis told CoinDesk that the service grew out of experiences working with gold dealers and investors, which includes maintaining a focus on customer trust and security, explaining:
One-week wait time
Bitcoin4Gold works like other mail-in gold services, in which sellers mail in their gold to be inspected.
When using the service, users first make an account and generate an on-site wallet. Then they select the type of coin or gold bar they wish to exchange, generating an estimated amount of bitcoin for which the gold can be exchanged.
Depending on the mail option users select when sending in gold for inspection, the process can take up to a week between the gold shipment and the payment in bitcoin, the company said.
Once the gold has been verified, Bitcoin4Gold re-issues an estimate to the customer which has to be confirmed before the payout is issued.
"Roundtrip, this should be between four days to one week from packaging and receiving bitcoins," Lewis said.
Gold market access to bitcoin limited
Most people who trade in bullion work within smaller, trusted circles of dealers who may either not own bitcoin or have the ability to sell or trade it on site.
Lewis told CoinDesk:
He added that in addition to giving this customer base a new onramp to bitcoin access, the service helps the digital currency ecosystem grow as a whole by bringing in new entrants.
Real demand for bitcoin
Lewis said that based on his company’s work in the precious metals market, he sees real demand among some investor for ways to shift directly from gold to bitcoin.
Outside of direct sales, investors often have to pay premiums using either bitcoin ATMs or online services that requires the use of a credit card.
Lewis' comments echoed previous statements from Agora Commodities founder Joseph Castillo, who in August said that there is grassroots support among precious metals investors who see long-term promise in the technology underlying bitcoin. However, slow adoption within the broader industry makes the acquisition process more difficult for some people.
Lewis added that despite the rise of bitcoin and problems in the gold market, bullion isn’t going anywhere any time soon.
“Bitcoin has a long way to mature, and we believe that gold has been here for quite some time and it will be here for a while,” he said.
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