UPDATE 9th July 0:00 UTC: BitGold has indicated that while it uses blockchain technology, it has pivoted from a focus on bitcoin.
Canadian digital currency startup BitGold has successfully closed a $3.5m Series A funding round.
Participants in the round included PowerOne Capital, Soros Brothers Investments, Sandstorm Gold and PortVesta Holdings. Notably, the man behind Soros Brothers Investments is Alexander Soros, the son of billionaire investor George Soros.
The Toronto-based company offers a consumer-focused Internet platform for global blockchain payments, alongside access to secure and redeemable gold for savings.
BitGold raised angel funding from its own co-founders Josh Crumb and Roy Sebag earlier this year.
Blockchain tech meets gold
BitGold says its mission is to provide “global access to gold for secure savings and transactions”, while at the same time offering digital payments based on blockchain technology.
Crumb said blockchain technology has already unleashed a wave of payments innovation that will empower people around the world by lowering costs and offering more access to safe and transparent financial services.
He explained:
“We see gold, the asset bitcoin was designed to mimic, as an important element in this empowerment. The flexibility of the BitGold platform allows gold to be a core savings account coupled with digital currency for seamless global payments, or as a natural-world storage and safety valve for an inevitable Internet of money.”
Gold in everyday transactions
Sebag, BitGold’s CEO, said technological breakthroughs in decentralised payment technologies such as the blockchain and Ripple have created a historical opportunity to make gold a useful means of payment in daily transactions.
“Since my days as a professional investor I have wondered why there’s no easy way to own and spend gold in a legal, transparent, and tax-compliant manner,” he said.
“True” gold ownership requires the precious metal to be safely vaulted and stored, he said, making it extremely difficult to spend, especially in microtransactions.
He continued:
“At BitGold, we solved this problem by developing a platform that is part gold exchange, part payments technology and part custodian, resulting in a powerful user experience that advances gold from a physical element to an instantly accessible unit of account and store of value for the Internet, an operating system for gold.”
Investors upbeat
PowerOne Capital Markets Ltd managing director Pat DiCapo confirmed that the company participated in the funding round.
He indicated that PowerOne has been a major participant in the resource sector for years, providing financing and advisory services involving billions of dollars to hundreds of companies.
Regarding the latest investment, he said:
“BitGold is a disruptive platform allowing consumers to utilize gold for payments and savings, while providing a more efficient mechanism than any other solution provided to date. We are very excited about the future of BitGold.”
Nolan Watson, Sandstorm CEO and chairman, also confirmed participation in the Series A round.
“I am of the firm belief that with recent advances in payment technology, that we are the first generation that will have the option to easily and conveniently use gold as money,” he said. “BitGold, in our opinion, is creating the best in class platform to make that happen. We at Sandstorm are very keen supporters of their efforts.”
The idea of combining blockhain technology and gold is not new and many proposals aimed at effectively digitising gold have been floated in the past. Bitcoin Bullion, DigitalTangible and Amagi Metals all offer different forms of gold-to-bitcoin trading platforms.
Gold image via Shutterstock