What caused you to become a Bitcoin believer?
Vaultoro: It happened pretty instantaneously. I have been an economics buff especially in the Rothbadian and Mises school of Austrian economics and one day I was on the net and saw that bitcoin had reached parody to the dollar. I tripped and fell down a rabbit hole that seemingly has no end.
How did you get involved with Bitcoin and gold?
Vaultoro: I have always been a gold bug but after the collapse of MtGox stung me I wanted to show the world how a transparent exchange should look like, and Gold was the perfect answer. I also wanted to show how Gold could be used as a hedge against the bitcoin volatility and how people could own the counter value (gold). So we built Vaultoro.com to be an interface for the 99% of the world to the old established Swiss Bullion Vaults, which only the 1% wealthy could traditionally access. So we built a trading platform, a fluid interface between insured and BDO Audited gold bullion and bitcoin.
With Bitcoin starting to become mainstream, which Bitcoin site(s) do you find yourself spending the most time on?
Vaultoro: Definitely the bitcoin subreddit for news (reddit.com/r/bitcoin). I also use a few different android wallet apps for different purposes. Co-pay for multisig stuff. I used to use lieferservice.de all the time to order from hundreds of restaurants but they changed their interface and removed bitcoin recently. I emailed them and they said they would be adding it back very soon. I really like the MyCelium app for spending from paper wallets and for meeting local buyers and sellers.
What are some of the opportunities for Vaultoro in the near future?
Vaultoro: The opportunity for people to hold a physical asset like gold and then be able to spend it instantly and globally down to the 5 cent level is very attractive for folks that want a cheaper and faster way to transact online without the massive volatility that bitcoin by its self has. The 2.5 billion unbanked also mostly don’t have the documents that fiat exchanges need to satisfy KYC regulations. Gold is considered a good and not considered money so the KYC regulations in Europe are way softer. Try getting KYC compliant paperwork from an unbanked person in a developing world, it’s not going to happen. With Vaultoro.com anyone can sign up with just an email and password and easily hedge the bitcoin volatility with physical gold secured in their name as their property, this means that even if something happens to Vaultoro all members can get hold of their gold.
I think our Audit system is also a great opportunity for us and our users. We are the most transparent exchange in the industry because we have easy to read and understand proof of liability and proof of reserves. I’m looking forward to the day that every exchange and bank does what we do so people can choose an exchange or bank without such risk. Just look at all the bank failures in the US alone over the last 6 years. https://en.wikipedia.org/wiki/List_of_bank_failures_in_the_United_States_(2008%E2%80%93present
By the market demanding more transparency, not by force of law but by choosing to do business with transparent banks and exchanges it forces the rest to follow and put good transparency protocols in place.
How do you see Vaultoro impacting Bitcoin’s move into the mainstream financial world?
Vaultoro: Bitcoin is really fast and fluid to move around but has been too volatile for the small merchant to risk holding much value in.
Gold is heavy and slow to move but relatively stable compared to bitcoin. By being able to use physical gold secured in your name as your property as the store of value and bitcoin to instantly spend it even down to the milligram (around 5 cents) we enable the 2.5 billion unbanked and a further 2 billion under banked the opportunity to jump into the global economy and escape poverty simply by using bitcoin. No permission needed to open an account. Just download a free app or use the SMS technology someone like the startup 37coins is creating.
How has the Bitcoin landscape changed since you first got involved?
Vaultoro: Oh wow, infinitely! When I first got into it there was so much uncertainty and no one accepting it, the only thing I was certain of was that it would change the world, and it is. The only real thing for sale at the time was alpaca socks and some random things on message boards, the rest was bounties for work to help build out the network. At that time I thought wow, this is the first time that a computer program is effectively paying me to strengthen it.
Now we are seeing massive multinationals like Microsoft and even Barclay’s banks using bitcoin. It is also really exciting seeing the bitcoin 2.0 tech coming to life. The general decentralization of so many things is really cool. I especially like what Storj and Auger are doing.
How has Vaultoro affected the Bitcoin mining community?
Vaultoro: We have only just launched our instant order function and have had miners from all over the world using it to instantly hedge the bitcoin they mine with physical gold. The downward price movement over the last year and a half has been very tricky for miners to deal with. Most of them have resorted to insta-selling out to fiat to make sure they can pay the electricity bill. Some people say this creates a downward sell pressure further driving the price down. With Vaultoro, Crypto miners can hedge the bitcoin volatility with Gold and then convert parts of the gold back to bitcoin when they need to pay bills (hopefully in bitcoin). This is great because when a miner buys gold on Vaultoro they are most likely buying from a gold holder that wants bitcoin. This slows the downward sell pressure on fiat exchanges.
I got an email from one miner saying that his kid is giving a talk at school about how his dad is mining gold with his computer, which is really cute.
Where do you see Bitcoin in 5 years from now?
Vaultoro: Far out. I think most financial transactions will be flowing through secure Blockchains. The most secure blockchain is and will be the Bitcoin Blockchain. I always remember making phone calls from Australia to Germany in the early 90s and we where literally connecting one phone call all the way to Germany, the calls where soooooo expensive and echoed and dropped out. Then the Internet came and companies would offer really cheap calls. They where doing this by getting clients to ringing a local number, it then converting the voice to data moving it over the Internet to Germany, then making another local call in Germany. So the company was basically making 2 local calls undercutting the old system. We all started using VoIP without even knowing it. I think this is where we will be in 5 years with bitcoin too. Everyone will be using the bitcoin blockchain to move money around without even knowing it.