A BitGold Update

Dateline: 15 September 2015

It has been about five weeks since I posted my blog essay titled, Considering BitGold (It’s Not A Cryptocurrency). Since then, I have put more money into BitGold than the initial $100 I mentioned in that post. And I have watched the price of gold go up quite a bit, then go down quite a bit, as this next graph of the 5-week period shows…

My 5 weeks of BitGold value
(click to see enlarged view)

Then, yesterday, I received my BitGold debit card in the mail…

I’m looking forward to transferring some of my BitGold account into the debit card, and using it as needed for everyday purchases. However, I’ll wait until the price of gold climbs up to the point where the value of my account exceeds the amount of money that I’ve put into the account. Then, when the price of gold dips down again, I’ll buy more BitGold. 

That’s my plan and it will be interesting to see how it works out. It isn’t important to me that the price of gold goes up and up and up, as many precious metal buyers hope and expect it will in the months ahead. I have not bought into the BitGold concept to make a profit, but to utilize an alternative currency—a currency that integrates with the central banking monopoly currency we are all familiar with, but is, at the same time, outside the banking system.

BitGold is what Bernard Lietaer would call a “complementary currency.” I’ve been listening to some of Lietaer’s YouTube talks and I like how he likens the central banking, debt-money system to a monocrop. A farmer who grows the same crop over and over every single year is inviting trouble. Diversity brings health and vitality to natural systems, and Bernard Lietaer believes the same is true for monetary systems. It’s an interesting concept, and I’m inclined to think Lietaer is on to something important in his thinking. 

From my agrarian point of view, I see BitGold as a decentralized form of money. Decentralization is fundamental to the agrarian way of thinking. Agrarians see decentralized social systems as being safer for the people who live in them, and more resilient. 

So I remain invested in the grand idea of BitGold. However, in keeping with my own advice in my first essay, I’ve not invested more money in BitGold than I’m willing to lose if the idea fails. 

One of my concerns about the BitGold concept is the ability to purchase gold at only 1% above the official gold price. While I really like that aspect, I wonder how it is sustainable. My understanding is that the demand for gold is currently so high, and the supply of physical gold is so low, and the official price of gold is so disconnected from reality, that there is currently a high premium (added cost above the official gold price) to purchase gold. No business can survive if it buys high and sells low. I’m assuming that there is something I’m unaware of in this line of thought, and that BitGold knows what they are doing.

In any event, I’m pleased to be an early adopter and supporter of this new idea. I’m hoping that BitGold will survive and thrive as a complementary currency.