AMA, Hi I'm Joshua Scigala the CEO of Vaultoro.com the bitcoin gold exchange

[Vaultoro]

Hi I'm Joshua Scigala from Vaultoro, AMA!

A little about what we enable.
http://www.vaultoro.com is the first true bitcoin gold trading platform. Built as a real global marketplace, anyone can trade in and out of allocated physical gold, secured in the client's name as their property, in top-tier vaults within Switzerland.

I got stung by MtGox and wanted to build the most transparent exchange in the industry. I give talks at bitcoin conferences about transparency and how we can have transparent exchanges and still protect user privacy.

Vaultoro prides itself on being one of the most transparent exchanges in the world, utilising the blockchain to show full proof of 100% gold and bitcoin reserves.

I got into bitcoin back when you could still mine with CPU but I got into it to escape fiat that's another reason we built a true bitcoin gold exchange to anyone including the 2.5 billion unbanked can use bitcoin as a currency and gold as a store of value instead of using fiat.

Anyone can start trading down to 4 cents worth of bitcoin and because gold is a physical good there is no need to upload KYC documents for less than 5K USD worth of bitcoin per day.

Our goal is to enable anyone to hedge the bitcoin volatility with a real physical asset that is owned by the user and not by a bank.

We have just passed the 2Million dollar trading volume after launching in February this year AMA

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Which digital currency (litecoin,dogecoin, peercoin etc) do you think will be the biggest competitor to bitcoin in 5 years

I feel that a privacy based coin is what is needed, this is not to do illegal things but is needed for legitimate business needs, a lot of businesses that I talk to say they don't want to currently use bitcoin because they don't want competitors to know company secrets like how much they pay staff, who their supplier is and so on. Saying that I think the sidechains that are being worked on are going to deliver solutions in this space. I think there will always be competitors to the bitcoin blockchain but sidechains will enable people to test out concepts with the vast security and power of the bitcoin blockchain backing it.

The real time trading is key. Have you considered futures, leveraged trading or other derivatives?

I believe all markets can be accessible through Bitcoin, legal wise what is the biggest hurdle to exploring new types of commodities, currencies or even keeping the gold exchange running?

Yes, I agree about the real time trading, every other company offering gold for bitcoin only offer brokerage services were they are the only counterparty. The problem with that is if you buy a lot of gold from those companies and they decide to make the buyback price really high then you're forced to pay that to get your money out. On Vaultoro, if we as the market maker decide to make our buy back price higher then someone else will jump in front of us in the order book to offer a closer price to spot.

Leveraged trading is planned in the development cycle. It will be a great way for people to earn interest on their savings (both bitcoin and gold) by lending it out to short sellers if they wish to do so.

But also, I really like that bitcoin has a price discovery mechanism based on a commodity and not just debt based fiat nonsense. It moves us further away from a fiat paradigm.

The legal threat to our business is not that big. Buying and selling gold is a very well defined and understood industry. We will definitely stay abreast of the bitcoin regulations that are being discussed in different countries around the world. Companies like e-gold got shut down because they were creating their own currency and allowing individuals to send each other gold. Governments don't like privately minted currencies, that's the beauty of bitcoin, they have to allow it because they ae not able to shut down a decentralised protocol. We do not issue a currency that people can send each other, if someone wants to use their gold then they instantly convert it to bitcoin and then use that as the currency.

We will be opening order books for silver and also creating partnerships with vaulting firms in Hongkong and other geographical areas around the world. This will enable people to arbitrage gold in different countries but also move value in seconds if a geographical region becomes politically unstable.

If Gold price is based purely on market discovery, with Bitcoin to Gold, is it difficult to maintain liquidity to prevent slippage in times of great volatility? How do you provide gold liquidity to the books in a fair manner if you do so?

When trading USD or CNY, those currencies, have had fairly good performance as of late, so when trading it appears BTC is only fluctuating against that currency. Do you think it becomes more difficult trading because you're dealing with volatility on both sides?

The gold price is based on market forces yes, but traders mostly act logically and so price discovery on Vaultoro will generally follow global gold spot price.

With Bitcoin and Gold, you will have to look at both sides of the trade to decide on a price that works for you. Gold is fairly stable when compared with other commodities like oil and when traded with bitcoin is generally the stable part of the pair.

USD or CNY might seem stable because it' a person's home currency but that does not make it stable. It depends to what you compare it to.

We want to implement more feature so users can compare prices more easily, like having the option of showing all prices in USD, CNY, EUO but settling in bitcoin.
Re liquidity, we have a market maker in place who provides liquidity and have strong partnerships with one of Europe's largest gold suppliers and vaulting firms so liquidity is not a problem. Since we are a marketplace, once entered, anyone can provide liquidity and offer gold for a price they feel is fair.
When we act as a market maker we offer gold as close to world spot price as possible to make it attractive for everyone.

Very cool service, especially the fact that you can request actual delivery at any time.
Can customers deposit physical gold? i.e. Can I mail you 2 Gold Eagles and get credited 2Oz's in my account?

Thanks man, Originally we looked into people being able to do that but we decided against it for now because we need to make sure that all customers gold is investment grade at least 99.95% pure. To make sure of that we source good delivery bars direct from the mine to the vault. Otherwise, we would have to add the cost of testing and smelting into the price which would be expensive. Saying that, we have had this request a lot so might look at other solutions to make it happen.

Do you offer any gold backed cards for customers?

This is something we are currently working on. It will be fantastic for clients to be able to spend their gold holdings anywhere standard credit cards are accepted. Stay tuned

Are you seeing many arbitrage attempts with BTC price volatility... or are customers mainly HODLing?

Plenty of trading going on. Remember that when people trade fiat the money is legally owned by the bank so if something happens to the exchange or to the bank the money can disappear (MtGox) This was a huge inspiration for me. I wanted to build an exchange where the counter value is owned by the customer as their legal property. This way the value is fully secure and insured.

Are there any other commodities coming on in the future?

Yes Silver will be next but we want to fill out the gold order book first. We can also look at platinum and palladium but will have to see if the community wants it first.

Any other coins to be used in the future?

We currently accept most popular altcoins through our partnership with shapeshift but all pairs will most likely stay in bitcoin for the foreseeable future)

You mentioned "dark" coins... do you believe they will be necessary with things like JoinMarket plus CoinJoin? I feel privacy will be built into Bitcoin one way or another.

No I think the bitcoin protocol will gain privacy at a protocol level through sidechains and at an application level through technologies like JoinMarket and Coinjoin.



NOTE: I have started answering other questions within the forum thread because this first post was getting too long skip to page two to read on

[LISAM]

Which digital currency (litecoin,dogecoin, peercoin etc) do you think will be the biggest competitor to bitcoin in 5 years

[Vaultoro]

Thanks for the great questions. I will answer all questions in my original post so people can easily see all answers in one place

[creationlayer]

The real time trading is key. Have you considered futures, leveraged trading or other derivatives?

I believe all markets can be accessible through Bitcoin, legal wise what is the biggest hurdle to exploring new types of commodities, currencies or even keeping the gold exchange running?

[Vaultoro]

Thanks for the questions, I have answered you in my original post

[creationlayer]

If Gold price is based purely on market discovery, with Bitcoin to Gold, is it difficult to maintain liquidity to prevent slippage in times of great volatility? How do you provide gold liquidity to the books in a fair manner if you do so?

When trading USD or CNY, those currencies, have had fairly good performance as of late, so when trading it appears BTC is only fluctuating against that currency. Do you think it becomes more difficult trading because you're dealing with volatility on both sides?

[GaryDavisIRL]

Hi Joshua,

I had a question for you regarding legalities and legal concerns but it's already been asked by 'creationlayer' above and already answered by you, so I just wanted to say that the service you're offering is very, very cool! I hadn't heard of your company before but I most definitely have an interest in utilising your service in the future! Allowing the 'unbankables' access to an innovative payment system which also allows them to store value in a relatively safe hedge such as gold - owned by them, nonetheless - is amazing!

[Vaultoro]

Thanks for your kind words GaryDavisIRL. We always want to improve our service and there is a lot more room for more features etc. If you have any suggestions in the future we have an open ear for any feedback.

[GaryDavisIRL]

Thanks for your kind words GaryDavisIRL. We always want to improve our service and there is a lot more room for more features etc. If you have any suggestions in the future we have an open ear for any feedback.

You're most welcome! That you're here actively engaging with your potential client base and are open to any suggestions that they might have will certainly stand to you. Best of luck with Vaultoro.com, and I look forward to using your services soon!

Cheers!

[shwackd]

I would like to use Vaultoro's services for silver instead of gold. Will you please consider fast tracking this? I'm sure there are many other people who feel the same way I do.

[Vaultoro]

Hi Shwackd,

Thanks for the request, yes we are definitely trying to go as fast as possible but at the same time do things properly.

I'm also a big silver bug and have a few kilos stashed with bitcoin and gold. In terms of diversification of investments, silver is a great choice.

[pelicanetic]

Very cool service, especially the fact that you can request actual delivery at any time.

Can customers deposit physical gold? i.e. Can I mail you 2 Gold Eagles and get credited 2Oz's in my account?

[vivekomon]

Hey Joshua,

Do you offer any gold backed cards for customers?

Just asking.

[ronnieb]

Are you seeing many arbitrage attempts with BTC price volatility... or are customers mainly HODLing?

Are there any other commodities coming on in the future?

Any other coins to be used in the future?

You mentioned "dark" coins... do you believe they will be necessary with things like JoinMarket plus CoinJoin? I feel privacy will be built into Bitcoin one way or another.

[CryptoDesigner]

So with vaultoro.com you can now change ownership of gold very quickly.
An awesome example how the Blockchain can be used... Great use-case for this new technology

I don't own any gold myself (I wish I did) but the last few days I have been researching the concept of gold as a storage of value vs. bitcoin as a storage of value. and wanted to share my conclusions with you guys.

And as long as we accept stolen gold as payment our leaders will always have their guns to enforce their injustice.

A lot of gold most have been stolen at some point in time.. right ?
Do you have any comments on that ?

https://www.youtube.com/watch?v=HpZJUx5pmsk


GOLD ! A well-known “currency” and for thousands of years is has been a good long term storage of value...especially if we compare it with goods like wood, coffee, meat and other stuff that simple goes old over time. And certainly in Asia people understand it’s value, also in Asia it’s easy to trade as there is a gold shop on every corner. So it’s weird that In Europa and USA people will pay big money for plastic jewelry and not have any clue what the value of gold is. Personally if I had money to buy jewelry it should also be gold or silver as this would guarantee some return if I ever wanted to sell it. And I know for a fact that in some western countries their knowledge about gold is so limited that you couldn’t even buy a happy meal for an ounce of gold you would simply get rejected by the average citizens. Some people even view it as being “low class” to wear gold as jewelry which is total opposite compared to Asians that really loves their gold.

HOWEVER !!!!!! history has taught us that everything will and must changes, nothing stays the same and now with this new technology that the Blockchain and Bitcoin offers us I believe we will have a “new gold” that is Bitcoin. Which once it really goes main-stream will make gold a lot more unattractive.. at least that is my view.
REMEMBER!!!!!! in times of war your own governments and other thieves always steal the peoples gold. For people that trust their countries leaders and neighbors to respect their property I guess gold might still be good for long term storage if hidden well. Personally I would not like to carry around any gold in times of war!! So you are warned they simply steal if from you in times of war !

IMPORTANT!!!!! Also as long as we accept stolen gold as payment our leaders will always have their guns to enforce their injustice.

WAR ??? But hey people.. there is no war on the horizon.. right ?.... Wait.... news just in : "Our governments are fucking us in the ass as we speak !!" And making plans of war with the simple purpose to steal our shit again including your gold if they need it…just wait and see ! ... but don't trust me, look this stuff up and educate yourself about this.
Hopefully our leaders can be stopped before WW3 begins!

IMPORTANT!!!!! I believe Bitcoin gives us an opportunity to take the power away from these sick and failed gene pools of thieves and big government with their military industrial complex including all the losers that support them.

I look forward to hear what you guys think about this

/Stay cool

[TheCanary]

Hi Joshua

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[url=https://www.vaultoro.com]Vaultoro.com[/url]

[Vaultoro]

So with vaultoro.com you can now change ownership of gold very quickly.
An awesome example how the Blockchain can be used... Great use-case for this new technology

Hi CryptoDesigner,

Thanks for your comments, sorry for the delay in replying. It's been a crazy few weeks of meetings and flights.

We use top-tier Swiss Vaults that also hold gold owned by some of the richest elite in this world. Most wars have puppet masters who are extremely wealthy and most wars are waged to secure resources and tax revenue. When elites pull strings to start conflicts they do not do it near to where their wealth is secured. Even in WW2 Switzerland remained neutral. It might be a coincidence but at the end of WW2 when Berlin was flattened the whole of Potzdamer Platz in Berlin was gone. All embassies, all buildings... The only one standing.... The swiss Embassy. It still stands, without much damage at all to this day. Now I personally think it was a coincidence because bombs back then were not too accurate but never the less the point is Switzerland has historically ben very natural.


Saying that, we are working on opening contracts with multiple vaults around the world. Vaultoro will enables people for the first time in history to sell gold in a top-tier Vault in one country, convert that value and send it to another vault on the other side of the world, all within seconds. This means you could have gold in the Swiss Vault and then 1 minute later have that value stored as gold in a vault in Hongkong.

So if you did feel that a region was starting to be unstable then simply move it.

I am a huge bitcoin guy, I have been for a long time, but different money has different pros and cons. What Vaultoro does is make it seamless and fast to switch between one that is private, held it's value for 3000 years but is heavy, hard to move around and not easily devisable, with one that is fairly volatile, young but super fast, easy to move, ultimately divisible and still private property.

In my mind Gold + Bitcoin = near perfect money

Peace

[Skin_in_the_game]

Hello Joshua

I was re-reading Antifragile by iconoclast thinker Nassim Taleb recently. He writes

"Never ask anyone for their opinion [...] Just ask them what they have -or don't have- in their portfolio"

I have come to think it's a very relevant question and you can better weight people's opinions having an idea of how many Bitcoins they hold (or do not hold.) So Instead of asking their opinion on bitcoin, I'm now asking every participants the same question:

- Do you mind to tell us which percentage of your personal net worth and/or liquid assets you hold in Bitcoins ?

[Windowly]

I just love your exchange! Thank you for starting it. I am looking forward to you allowing silver as well.

I was wondering what you think about the scaling debate raging in bitcoin circles these days?

Also, it seems that a lot of of the industry (exchanges, payment processing companies, and wallets)are moving towards accepting BIP 101. Are you planning on following and switching to BIP 101 this December? Why or why not?

[Vaultoro]

Hello Joshua

- Do you mind to tell us which percentage of your personal net worth and/or liquid assets you hold in Bitcoins ?

Haha, I have around 35% in bitcoin, 35% in Gold and 30% in shares and naturally also put a lot of sweat equity into Vaultoro

[Vaultoro]

I just love your exchange! Thank you for starting it. I am looking forward to you allowing silver as well.

I was wondering what you think about the scaling debate raging in bitcoin circles these days?

Also, it seems that a lot of the industry (exchanges, payment processing companies, and wallets)are moving towards accepting BIP 101. Are you planning on following and switching to BIP 101 this December? Why or why not?

Yes, I am a fan of BIP101, it is a very well thought out solution, I do not want to jump over to XT though.

The main objection to bigger blocks is bandwidth and having the speed to propagate a solution to the network. I feel that bandwidth will be just like electricity costs, it is something miners will have to figure out how to get cheaply. Bandwidth will grow worldwide and if you as a mining pool have crappy bandwidth then you will figure out how to make it faster. (humans are amazing at finding solutions when profit is on the line).

Blocks need to be bigger, full stop, I do not want to see fees go up. To start with fees are actually only there to stop network spam and then eventually to take over from block rewards. Half of the attraction to use the bitcoin network is very low fees to send money. Satoshi (like a master chess player) thought everything out so elegantly in terms of game theory. By the time block rewards get down to 1.5625 per/10mins there should be enough Tx's in each block to pay for miners costs + profit with fees. To keep fees low, we need a large number of Tx's


NOTE: I am not a miner and not an expert in Mining but here is my opinion for what it's worth.
The miners are currently very centralised anyway so the argument that bigger blocks create centralisation doesn't worry me. I think bigger blocks could even decentralise mining more as pools outside of china, where bandwidth is faster might give more incentive to get started.

About the centralisation on hashing power.
We are currently in a phase where mining has become fairly centralised, I feel that this is a phase and as ASICS become cheaper and more commoditized we will see uses for mining that will greatly decentralise both solo and p2pool mining.

I personally know of a two amazing projects that have the potential to massively decentralise mining. Sadly I can't talk about them due to NDA's but I am very excited and positive for the future of bitcoin decentralisation.


TL;DR
BIP101 is a nice middle ground to see blocks grow with the network while keeping TX fees in check, mining will become more decentralised as ASICS become commoditized. Bandwidth concerns will just be part of the calculation like electricity costs for miners.