'Gold for Bitcoin' is emerging as a new trend in the world of online transactions. Many gold companies have rushed into Bitcoin trading recently, due to its high volatility and demand.
Recently, US-based precious metals dealer Anthem vault in Las Vegas announced its decision to launch gold-backed crypto currency named 'Independence Coin or INNCoin'.
"A staunch person who believes in the gold standard says bitcoin is valueless and ultimately a Ponzi scheme, and people who didn't dig gold but really got bitcoin would say that this is ridiculous, it's just a dumb metal," Anthem Hayek Blanchard, chief executive officer of Anthem Vault told Bloomberg.
Bitcoin has about $8 billion worth market value. Currently, one Bitcoin equals 582.87 US dollars.
In the past this currency has had slipped from one controversy to another. For instance, Mt. Gox, a Bitcoin exchange group from Tokyo, lost around 8,50,000 Bitcoins, worth $450 million in one night in February 2014.
A few traders have started selling gold for Bitcoins through payment processor BitPay, in order to allow investors to purchase gold and silver through Euro Pacific using virtual currency.
"Gold has always been seen as the ultimate store of value, and bitcoin is seen as the ultimate modern medium of exchange," Bloomberg quoted Simon Hamblin, the London-based CEO of Netagio Ltd., which operates an online exchange for trading among gold, Bitcoins and British pound.
Moreover, last month, DNA Precious Metals Inc. that digs for gold and silver in Quebec, Canada formed a subsidiary called DNA Crypto Corp. for online mining and trading of gold in exchange of Bitcoins.
Besides Bitcoin, other virtual currencies as Litecoin, Ripple, Darkcoin, Peercoin, Bitshares X, Dogecoin, Namecoin and Maid Safe Coin, which are transacted online. But Bitcoin dominates all above-mentioned crypto currency.
Bitcoin in India
The currency is with no clear standing on whether it's legal or not. Last year, The Reserve Bank of India already warned about the risks of Virtual Currencies in online trading of Bitcoin. The current cost of one Bitcoin is around 35,020 Indian Rupee ($578).
Otherwise, India has become the top destination for its gold exports with trade worth 6 billion Swiss francs (about Rs 40,000 crore) in May. Mydigitalfc reported that the Swiss money in India circulates via gold and Bitcoins.
Information week reported that many investors in India are optimistic about this virtual currency. Some entrepreneurs opined that Bitcoins should be seen as a long-term investment due to their high volatility.