Vaultoro: gold for bitcoins
Monday 03 August 2015
Vaultoro allows you to buy gold for BTC: a fast, simple and efficient way to pick up some shiny yellow metal for your portfolio.
One of the statistics that was passed around during the Greek crisis was that Vaultoro had seen a 124% increase in deposits from users with Greek IP addresses in the previous two months. The narrative was that Greeks were seeking both a store of value and a way around capital controls; gold afforded them the former, and bitcoin the latter. So Vaultoro, a gold-for-bitcoins service, fits the bill nicely. My interest piqued by this idea, I decided to take a look at Vaultoro for myself.
Top questions on my list:
- What kind of premiums do they charge over spot price?
- What are their KYC procedures like?
- Is this paper or physical gold - and if I ask nicely, can I take possession of it?
- Insurance. You have a lot of it, right?
The best way to find out, obviously, is to give it a go. So off I went to see if they’d accept some of my hard-earned BTC for their shiny stuff.
Purchasing gold with bitcoin is fast and easy, and considerably less heavy than doing it in person
First up, just a quick look at their website shows this is more like an exchange than a broker. You can place limit and market orders in real time to buy physical gold. Plus (and this really impressed me), ‘You can deposit up to $5000 USD daily and start trading right away without the hassle of uploading verification documents. There are also no limits on withdrawals.’
That’s what I’m talking about.
Trading fees start at 0.5 % and go down from there if you’re a frequent trader, which I’m more than happy with - especially given the silly spreads you get on physical gold in some places. Storage fees with full insurance are 0.4% per year. That sounds pretty good to me (and they claim it’s ‘the smallest fee in the industry’). I don’t like paying to use or store my own money, which is one of the reasons I like bitcoin; on the other hand, insurance is a necessary evil in this case and I’m not happy keeping a lot of gold under the bed, if only because I’ve got nowhere to put all the junk that’s already there. And just to make sure they don’t need to use their insurance too often, there’s a bunch of security features like multi-sig BTC cold storage, locked payout addresses, and your gold is held in a ‘high security vaulting facility in Switzerland’. This is audited by BDO, so they’re not just burying it in the garden.
So to sign up and purchase.
Sign up is fast and easy - no verification required until I’m playing with $5k a day which, frankly, isn’t going to be any time soon. The deposit page has a really nice feature: Instant order on deposit, so you can make a BTC transfer and know that it will be converted into gold as soon as it confirms. I tick this because I’m not sure how the network is behaving right now and send 0.1 BTC. While I’m at it, I set an approved withdraw address, and am rewarded by a dulcet chime.
While I wait for my transaction to confirm, I check out the trading page. Prices are denominated primarily in BTC, with additional information in USD, and suggest that I might receive slightly less than a gram of gold for my 0.1 BTC. Some surprisingly short time later - Vaultoro says I need to wait for 6 confirmations, but it comes through before Blockchain says there's even been one - I'm alerted by another dulcet chime that the funds are confirmed and the gold (0.783g, as it happens) is in my Vaultoro account. I can take physical delivery, so long as I am fully verified, don’t live in Iran or North Korea, and request at least 100 grams (about $3,700).
So that’s Vaultoro, and I’ve got to say I’m impressed. It’s efficient, it’s easy to use, and you can get set up in seconds without having to jump through a dozen KYC hoops. Great job, guys.
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