# Use Gold with BitShares to bypass Fiat Regulations

Everyone who has been following the evolution of crypto currency exchanges has learned how expensive it is to comply with all of the regulations in the money transmission business. It can literally takes years and millions of dollars to get permission from the government to start an exchange that accepts dollars for crypto currencies. All alt-coin communities have experienced the frustration of having to go through two exchanges (dollars to bitcoin and bitcoin to alt-coin) just to enter or exit the ecosystem. This two step process is expensive and ultimately limits adoption. Today I would like to present the case for abandoning fiat all together and adopting a truly free market currency: gold, silver, and other metals.

As you know my goal is to find free market solutions that make government irrelevant. It doesn’t do our society any good to move to a crypto-asset that is pegged to the fiat dollar if the government still retains the ability to debase our currency. Instead, we need to adopt crypto-assets that are pegged to other forms of money and then encourage people to adopt these physical assets as money rather than paper fiat.

## Bitcoin vs E-Gold

E-gold was fully redeemable for $85 million dollars which if we were to compare it to Bitcoin would be like asking what the value of Bitcoin would be today if$85 million dollars worth were sold in a single day. It is safe to say that the Bitcoin price would sag significantly if redeemed at such a rate which would lower its price significantly giving it an effective market cap of half what it is notionally worth today. This means that Bitcoin is currently 15 times larger than E-Gold at its height.

If there existed $85 million dollars of BitGold within the BitShares ecosystem, then it would have a total collateral worth at least$255 million and would likely represent less than 10% of the BitShares supply (because not everyone would be willing to short) and because people would likely have an equal amount of value held in BitUSD, BitSilver, and BitCNY. In any event, we can conclude that if BitShares can gain the same adoption for BitGold that e-gold managed years ago then it would have a market cap of over $2.5 billion dollars and a price of$1 per BTS.

The success of e-gold proves there is demand for a digital gold currency. BitShares with BitGold is the first real solution that has the potential to succeed where e-gold failed.

## BitGold pays a Yield

The icing on the cake is that BitGold will pay a yield proportional to the expected growth rate of BitShares itself relative to gold. For the first time in history a 300% reserve system is able to offer a relatively low risk return on gold and silver with a cut in the upside potential of the blooming crypto-currency space.

## Conclusion

BitShares delegates should heavily consider whether or not their price feeds are reflective of the true price of 1 oz of gold for immediate delivery and consider making adjustments to the spot price to account for the real world premiums that exist. This will make BitGold far more attractive to gold bugs that do not want to trade on the rigged system and hope to see huge gains when the spot price decouples from physical prices. We need to encourage gold and silver dealers to adopt BitGold as a means of payment so that we can form a network of “local branches” around the country in every local coin shop or pawn shop.

Liberty minded people trust gold and silver and will more readily adopt crypto currencies if they are pegged to something they trust and not to something controlled by those who enslave us with their fiat monetary system.

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