Why Bitcoin when you have gold?

[VicBee]

I recently learned that a close family member has been using gold as a means of daily payments for 10 years! But how you might ask?

First, they've been investing monthly all these years to buy gold with a group based in Switzerland specialized in trading and storing gold and silver. They are spared the typical banking disclosure requirements because they aren't a bank.

Next, the group made a deal with a major card provider to issue cards to their customers. I don't know the details if these are credit or debit cards and what currency limitations they have set, but purchases are paid against the day's exchange rate.

Clearly this is legit enough for they've been doing this for so long and wonder what you experts on alt forms of payment think of this. I was floored.

 

[Clubber Lang]

Sounds made up

 

[VicBee]

Sounds made up

I would have said the same had it not come from this person.

 

[Tokenz]

So first they need to buy the gold, with real money right? Meanwhile, gold is volatile, so sometimes it is more or less than when they first bought the gold, and then your using credit cards to spend? So I guess when you want to spend your "gold" someone takes a hammer and a chizzle to your gold and chops off a piece of gold equivilent to the amount you spent on the credit card.

What a genius idea. You shouldn't have any taxes to pay at the end of the year with this strategy. Keep buying gold...

 

[BKR88]

They are spared the typical banking disclosure requirements because they aren't a bank.

That may seem less of a hassle BUT it also means there's no verification they have the amount of gold/silver they claim to have.
The Madoff ponzi scheme went on for decades.
So imagine you bought $1M worth of gold as a retirement and figured you'd just use it up slowly as you made purchases. Then 10 years later your card gets denied after you've spent ~$500K. You contact the holder of your gold and find out it was a ponzi scheme. They used half of your gold ($500K) to make your payments and they stole the other $500K you gave them rather than buying $1M worth of gold.

Not saying this is likely but if they're not regulated, what certainty do you have they're holding your $1M in gold?

 

[PrestonRiver]

I recently learned that a close family member has been using gold as a means of daily payments for 10 years! But how you might ask?

First, they've been investing monthly all these years to buy gold with a group based in Switzerland specialized in trading and storing gold and silver. They are spared the typical banking disclosure requirements because they aren't a bank.

Next, the group made a deal with a major card provider to issue cards to their customers. I don't know the details if these are credit or debit cards and what currency limitations they have set, but purchases are paid against the day's exchange rate.

Clearly this is legit enough for they've been doing this for so long and wonder what you experts on alt forms of payment think of this. I was floored.

where to keep gold where to buy it how to carry it how to measure the value when you wanna make a payment how to but things online with that? these are all things for which I prefer btc.

 

[Slow Learning Elf]

There are some advantages and some disadvantages when comparing gold to crypto. Volatility is relatively low (unlike any crypto asset), it’s not traceable (again, unlike any crypto asset) and it has millennia of human trust (again, unlike crypto). The main drawback is that you can’t send it electronically (unlike crypto) and it’s hard to transport/store in any significant quantities (unlike crypto).

 

[The_Krakenite]

You can't self-custody gold very well. Can you hide bricks in your closet? Yes, technically, but... can you guard it that way 24/7? At what cost?

Can gold travel through both SPACE and TIME like a digital asset? You've got to be kidding me...

 

[Slow Learning Elf]

Can gold travel through both SPACE and TIME like a digital asset? You've got to be kidding me...

Can gold be tracked by authorities like a digital asset? Would gold ever crash 20% in a day?

 

[MrMuppet]

I recently learned that a close family member has been using gold as a means of daily payments for 10 years! But how you might ask?

First, they've been investing monthly all these years to buy gold with a group based in Switzerland specialized in trading and storing gold and silver. They are spared the typical banking disclosure requirements because they aren't a bank.

Next, the group made a deal with a major card provider to issue cards to their customers. I don't know the details if these are credit or debit cards and what currency limitations they have set, but purchases are paid against the day's exchange rate.

Clearly this is legit enough for they've been doing this for so long and wonder what you experts on alt forms of payment think of this. I was floored.

Gold and silver owned through bonded warehouse in Switzerland...this structure is as old as time. There are countless services added to this trade such as using it as collateral for your credit card, savings plans, etc.

To be honest @VicBee I do not understand your question in this context: Do you think these service providers work for free? You're losing ~3% in bid/offer spread for trading physical bullion, 1% of your net value each year for the bonded warehouse plus additional fees for the services. I guess your buddy kills 5% of his net worth each year just in fees.

In many of the EU countries bullion is subject to VAT so people think they're smart as they avoid the tax but in the end it's just a massive fee hover. It's a saying that if the wind is right and you open a window in Frankfurt you can hear the owners of Geneva Free Ports & Warehouses laugh at the gold bugs.

So it's an insanely stupid trade, really...not just compared to BTC (can be traded almost for free and transferred in an instant without middlemen to any place in the world) but compared to every other trade you can do.

Can gold be tracked by authorities like a digital asset? Would gold ever crash 20% in a day?

Every purchase or sale of bullion above 2000 € has to be registered. You have to bring your personal data as well as your passport with you. In addition to that, every "suspicious" transaction has to be reported to the FIU by the bullion dealer. So if you think you can hide in gold so your government cannot confiscate your assets...they know exactly where every ounce is.
Gold doesn't crash 20% but it also doesn't pump 20%. If you're scared of the volatility of BTC, just hedge it with derivatives and you'll even get yield from that.