I guess you would have no problem exchanging food for gold, but not at the rate you would like (or the market rate).

In my town, gold buyers buy gold at market rate, with cash. They sell gold at premium. It is quite easy and effortless to change your gold to cash, and then buy food from the market.

With bitcoin it is a little different, bitcoin ATM's have usually quite ridiculous premiums. I think the most used one in our town has 5% both ways.

> In my town, gold buyers buy gold at market rate, with cash. They sell gold at premium.

Who are they selling it to? Or by "market rate" do you just mean "the same rate that other gold buyers in the same town will pay"?

Since gold buyers are large/frequent market participants who deal with rare/sporadic market participants, I would have been strongly inclined to bet that gold buyers would buy below market and sell "at market". The guy walking into a gold buyer's shop to sell his gold probably isn't just testing to see what kind of price he can get. The gold buyer will happily wait to sell his gold until the price is right, though. That's his job.

Check out sites like localbitcoins. You can sell Bitcoins in cash pretty much anywhere in the world, even at a small premium. (How the Bitcoin ATMs survive in that environment I don't know.)