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April 29, 5: Roy Sebag and Josh Crumb never dreamed of all the ways customers would use their gold payment and savings platform. Gold is one of the oldest and most antiquated mediums of exchange in the world. Perhaps for that reason, no one thought to incorporate it into the digital finance universe before BitGold. Sebag and Crumb launched BitGold roughly a year ago. There were naysayers early on who thought it was just another type of gold exchange-traded fund or trendy fintech software that would never catch on the Bitcoin allusion in the name might have added fuel to the fire.

Then they took it public, and the stock price promptly went berserk because of a giant short squeeze. That overshadowed the actual business for a while. The BitGold platform had , users signed up as of March 31, with more than , of them using it actively. Sebag, 30, and Crumb, 36, are now planning to open up physical branches in major cities around the world. Of course, BitGold remains a tiny competitor in the online payments universe. It is unclear whether BitGold can become more than a niche player in this sector.

Gold bugs always say gold is money, and BitGold evolved out of that concept by putting gold to work as a currency instead of something you store in a vault.

Put simply, it is an online financial services platform that allows users to buy and store gold, and instantly pay for goods and services in gold. Users can even get a prepaid BitGold MasterCard that allows them to buy everyday goods using gold. They can also redeem physical gold, which gets delivered in gram cubes.

BitGold collects a fee of one per cent on transactions. Naturally, gold bugs have embraced the concept. But the founders claim they only make up about a quarter of the user base.

Most users have never owned gold before and simply see the value of building savings and doing business on the platform, which works as a closed-end loop and allows them to bypass the traditional banking system. One of their biggest challenges will be to keep coming up with fresh offerings in the months and years ahead. They hope the next leg of growth is in business solutions. In April, BitGold launched a technology that includes payroll, invoicing, and checkout options, allowing businesses to do transactions around the world without getting slapped with cross-border or foreign-exchange fees.

Businesses can even choose to pay a portion of their payroll to employees in gold. Not surprisingly, mining companies are interested in this option. One notable opportunity for BitGold is micropayments, the tiny online payments often tied to music or gaming. PayPal charges sellers a five-per-cent fee on such transactions, plus a fixed fee of five cents, according to its website. Although BitGold operates outside the traditional financial system, Atkinson still sees opportunities to partner with banks and mobile operators to provide the service to their clients.

BitGold has gobbled up intellectual property related to gold and payments, and he said banks are constrained by rules and regulations that preclude them from aping the BitGold model. But now they are convinced that gold is the driving force. Gold has been money for thousands of years — it just took a long time for consumers in the digital age to put it to work in new and useful ways.

Filed under Commodities Mining. Canadian NHL teams don't often win the Stanley Cup now, but their rabid fan base still makes them big winners. Even a modest increase in interest rates in Toronto and Vancouver is a concern for most buyers. Find Financial Post on Facebook.