Bitcoin Forum

ANNOUNCE: BTC-GOLD (https://btct.co/security/BTC-GOLD) CLOSING

My Goal is to increase strength of Bitcoins and Litecoins, by allowing the free and simple trade between the currency and Physical Gold Bullion without all of the hassle and added expenses of procurement and sale of bullion.
Each share is equal to 0.01 grams of gold bullion.

OVERVIEW:

By investing in BTC-GOLD you are investing into Physical Gold Bullion. Various forms of Gold Bullion will be obtained by the operator (myself) ranging in brand, size, and form, but all gold is guaranteed to be at least .999 pure. The amount of shares in circulation at any time will only reflect the amount of gold I have held physically in grams at any given moment. One share is and will always be equal to 0.01 grams of physical gold bullion.

WITHDRAW OPTION AND SHIPPING:

You may request to have your shares withdrawn as physical gold bullion and shipped to you.
You must issue requests in 500 share (5 gram) increments.  To do this, please send the operator a message and I will give further instruction. I will also require that you pay a 15 share handling fee and the entire shipping expense, which will be calculated upon your request for withdrawal. Payment for shipping will be accepted in additional Shares, Bitcoins, Litecoins, BTC-E Code, and MtGox Code.
You will be responsible for the cost of all shipping features you desire, be it insurance, or the use of another shipping company. (ie UPS or Fedex) After the entire shipping expense has been paid, I will guarantee that all gold bullion withdraws requested will ship out on my end, and I will provide appropriate tracking via the carrier at no additional cost, when available. However,
although rare, the carrier can lose your packages. I am not liable these mistakes, and it is your responsibility and highly recomended to request appropriate insurance if you feel it necessary. It is also your responsibility to check all of your country's laws about bullion importation. I will be shipping from the USA, so please look into local laws, and be prepared to pay
any applicable taxes, customs or fees imposed by your country.

Exit Strategy:

If for any reason I am unable to continue my obligations here, I reserve the right to shut down operation. In that case, the first option available will be to receive your Physical Gold Bullion via the mail. The above shipping terms still apply, but the handling fee will be waived in this case. For those that do not want to receive their Physical Gold Bullion, I will liquidate the remaining bullion and pay out your share value at current Gold spot market value.

Bullion:

Your investment is 100% backed by Gold Bullion. No shares will be issued unless an equal number of grams is held in storage. In theory, your stock value should never be worth less than its weight in gold. Of course, gold has its own price fluctuation up and down, but it is your duty to make your own informed decision as to whether or not this is an investment that suits your needs. I recommend you do some research into gold economics, look at the price trends, and decide for yourself whether Gold Bullion is the best choice for you right now.


Condensed Version


This is a Gold Bullion mutual fund, operated and managed by myself.  Each share being worth 0.01 grams of Gold Bullion. I will buy .999 pure Gold bullion, and will first take pictures to prove the total asset amount, and will then release an equal amount of shares to how many total grams of gold bullion are in the fund. The gold bullion will then be placed in a secure location, and locked away until needed. Another feature that this investment has, is the option to physically withdraw from the Gold Bullion asset. In this case, I will send you your physical gold bullion in the mail, of course I will require that you pay shipping and customs/duties, and there is a small fee, but that is listed in the shipping terms above.
The best part being, since there will never be more or less shares owned and on the market than I currently have in the vault, everyone could withdraw at once if they really wanted, and no one would have to wait, and there would be no "bank run." Although, I will mention, your best deal is to just own the BTC-GOLD shares, and not have them physically shipped. The whole idea of this asset is to give a liquid Gold to currency asset, where you don't have to deal with your own country's taxes (VAT to be specific) and you don't have to deal with the shipping cost.

Bullion Inventory:
https://docs.google.com/spreadsheet/ccc?key=0AqLxDN0JzEUNdE9vNG1zZWlrUTIwbFhrZzVtSUowc3c

FAQs

Why would I want this?
This is probably the easiest and fastest way to buy gold bullion with your BTC, especially for someone who can't afford to buy all at once.
If your goal is to buy and accumulate physical gold bullion, you can purchases shares a little at a time until you have enough to withdraw.

You can use your shares as collateral because they are always backed by physical gold bullion.

It is a quick and easy way to transfer gold bullion to either your own portfolio, or to others.


Does this pay a dividend?
No. Holding a share is the same as holding 0.01 grams of gold.


Why is you per-share price so high. It’s way over spot price.
The spot price is the going rate for a certain amount of gold. Having this gold purified, and minted in to exact weight bullion adds a extra cost.
The share prices reflects the bullion price for minting, storage and other costs.
After the shares are released to market and sold, the price per share is determined by the market itself.

Why do you buy small bars of bullion when there is less overhead with larger bars?
It's true, smaller bullion bars do have a bigger bullion cost than larger weight bars. This is why 5 grams is the smallest that can be withdrawn.  I chose this size because I feel it is the best opportunity for smaller investors to eventually withdraw a bar while keeping bullion costs manageable.
As market demand grows, larger bars will be added to the bullion stock. However I need to keep enough 5 gram bars in stock to fulfill requests to withdraw 500 shares.

Do you sell shares first and then buy bullion?
No.
No shares will never be sold unless I have the actual gold bullion in my reserves to back them up.
When shares are redeemed for a bullion withdraw, those shares are removed from the market.

I see BTC-GOLD and LTC-GOLD Why are there two?
I manage two separate funds--one priced in Bitcoins and one priced in Litecoins. They both work the same way and each fund has it own stock of bullion and will never intermix.

Good questions odolvlobo.



This security sells shares of gold bullion. I plan to make a small profit the same way that any other bullion dealer would. A more precise answer is found in the next question.



First, I have never specified a premium or a percentage.

Like I said in my answer above, I am selling shares of gold bullion, not just gold. Buying gold bullion always cost more than the spot price of gold because bullion goes through a process. The gold is purified, it is then weighed and then minted.
This "fabrication and procurement" process always adds an additional cost on top of the spot price for gold, and is included in the price per share.

As mentioned above, operating expenses are included in the price per share as gold bullion shares are released.

Why are shares 0.01 g instead of 1 g? Or since the smallest incriment is 5 g, why not have shares represent 5 g?

I don't want to have the most expensive shares on GLBSE.

With 1 share = 0.01 grams, it is very easy to:

• buy a few here and there (for smaller investors)
• know exactly how many grams you own

This will be a good method of speculating on Gold through BTC. I wish you luck, OP.

Thanks.

Waiting on Nefario to approve the asset on GLBSE.

Will you post pictures of the physical gold you are holding?

I believe the auditing here will be done through redeeming your shares for gold in the mail.

I don't think pictures of gold will do any good considering they can be easily forged.

he is gettin to run away with your gold when he got enaugh

Yes, I will post photos of the gold bullion.


I have one 5 gram bar being delivered. I expect it to come in next week. And pending Nefario's approval the shares will go live on Oct 1.

So is your plan to buy the gold and then sell it as shares, or sell the shares and then use the proceeds to buy the gold? (Your statement sounds like the first one, but I am just checking to make sure everybody is on the same page.)

Will you start to purchase more gold as soon as you sell the first batch of shares?

No shares will ever be sold unless I have the actual gold bullion in my reserves to back them up.
When shares are redeemed for a bullion withdraw, those shares are removed from the market.

I am using my personal funds to purchase the gold bullion upfront. When it arrives, the shares will be issued. When the shares are sold, my personal funds are paid back.


More and more gold bullion will be kept in my reserves and more shares issued as market demand increases.

Do you have an upper limit to the amount of gold you will hold?

How secure are your gold holding arrangements?

Will you be running a bot on the GLBSE market to keep the shares following the BTC/XAU price ratio? Will you be buying back shares? If so, what will the spread be?

There will be no set upper limit to the amount of bullion held. The actual amount of bullion will depend on market activity. If there is a large number of people willing to buy, but little to no sales, this would indicate more bullion (and shares) would be needed.

The gold bullion would be stored in a safe in my home.
If the amount of bullion becomes significant, I will look into insurance and other safety measures at that time.
A motion would be raised to determine how to cover the cost of these additional measures.

There are only two times the assest will deal directly with shares:
When new bullion is added, a sell wall will be created for the new shares.
When a bullion withdraw is made, the corresponding shares are also removed from the market.
After that, the share price is determined directly by the market.
Please remember each share is gold bullion, which is always at a higher price than the spot price of gold.

The only time a buyback would ever occur, is if the asset were to shut down. In this case, shareholders would be given the chance to withdraw bullion (if they have enough shares), and the rest of the bullion would be liquidated and paid out to the remaining shares.

It's important to define this as troy ounces or we are going to have issues.

I'll get in on the LTC-GOLD side.  Thanks for setting this up!

Who said anything about ounces? I see measurements in grams.

Correct all shares are based on the weight in grams. ( 100 shares = 1 gram gold bullion )


A gram is a standard measurement of weight in most of the world, but not usually when dealing with precious metals.
For reference there are 31.1034768 grams in one troy ounce (http://en.wikipedia.org/wiki/Troy_ounce).

After months of glbse garbage. I am finally able to release this asset on btct.co (https://btct.co/security/BTC-GOLD).

After approval and shipment of the first bar of gold bullion, shares will be released.

Congrats! Good luck on the launch! You stated you were waiting for receipt of PM, can an investor be assured then that you won't double sell AU denominated in LTC and BTC?

I too wish you'd define shares around fractions of an Ozt rather than bringing grams into it, as it gets rather messy, but it's a minor concern. You get my vote.

Thank you.



Absolutely. This is addressed in the FAQs section (https://bitcointalk.org/index.php?topic=110418.msg1201791#msg1201791) (second post). The BTC and LTC assets will maintain separate bullion deposits and will never intermix.

The BTC-GOLD bullion deposit and shares released spreadsheet is maintained here:
https://docs.google.com/spreadsheet/ccc?key=0AqLxDN0JzEUNdE9vNG1zZWlrUTIwbFhrZzVtSUowc3c


This was a tough decision to make. One of the goals of this fund is to make owning gold bullion affordable to the masses. I had to find out a way to make share prices that are easy enough for the "average" person to afford, while at the same time maintaining a unit that is easy to figure out exactly how much bullion you own according to the share you have.

Making a share affordable:
With the price of gold so high, dividing one troy ounce even by a factor of 100 makes the individual share price higher than I was planning for.
With each share being .01 grams, each share price is about 31 times less expensive (or 31 times more affordable, if that's how you look at it).

Less confusing:
Troy ounces are the world's standard in precious metals. But like imperial measurements, ounces are just weird to people unfamiliar with it. And troy ounces are different from the avoirdupois ounce (which is used in the USA) just to make things more confusing.

However, I would like to hear more opinions on this issue. If you (yes you! anyone reading this post) find this fund intriguing, but would rather have ounces over grams; please reply and voice your thoughts.
There is still time to change the asset contract.

On grams/oz.

Isn't there an obvious basis to decide which to use - what the gold you buy is measured in.  If you're buying 5g bars then use grams.  If 1oz bars then use oz.  The gold you buy needs to ideally be an exact multiple of the value of a share - so anyone wanting to trade in knows a round number of shares they need (not 500 shares + an extra payment equivalen to 0.31 of a share or whatever).

Or is that putting the cart before the horse?

Thing is everyone that's serious about buying AU is going to run the numbers and the numbers have to be compared to gold bullion which is of course sold in Ozt. Sucks, but there it is and there's no escape. :) Couldn't you do a fraction of an Ozt just as easily to keep the cost of a single unit down?

The nice thing is, I have a 5 gram bar to ready to go, but I can also have troy ounce bullion (or fractional ounce) delivered as well.
I have time to change the contract to ounces or keep using grams all the way up until the first share is sold. I don't mind buying one way or the other.

And yes, each share will always be a fraction of the unit of measure.


0.01 grams OR perhaps 0.001 troy ounces.
Having each share = to 1/1000 of an ounce still achieves my goal of affordable shares.


Any other opinions out there? Is troy ounces a good idea? Do you not care at all? Feedback is welcome.

Grams or fractions of grams are still most likely your best bet, you can keep holdings and shares in increments of 10, and don't have to worry about ounce/troy ounce conversions or those pesky extra weight increments like 31.1 grams/troy oz. Even 1 gram shares would be high, at around $70 per share (cost of a recognized 1 gram bar approximately) so I would recommend keeping it at 1/10th ($5-7 per share) or 1/100th gram ($.50-$.70 per share) (Even more parenthesis (Price variation having to do with additional cost over spot depending on increment size))

I know you have had success in the LTC market here, but now keep in mind, you may be able to do larger share sizes, as Bitcoin holds a higher value. where you may be paying 10 LTC for a 1/100th gram share, you would be paying .05 BTC per share.  

Remember, shares will always be in the unit of measure. Meaning each share will be 1/100 gram with gram bullion or 1/1000 ounce with ounce bullion. I won't mix ounce bullion with gram shares.



The price per share will always reflect the USD/BTC price per unit of bullion. I expect share prices to be bitcents.

I would still like more input on the issue of grams versus troy ounces.

And to make it easier, I will put it up to a sudo vote.

Here are the two options:

Grams
Currently, the default would be to release the shares in grams where 100 shares = 1 gram.
At current BTC/USD prices, each share would be about 0.035 - 0.060 BTC (price subject to change based on a number of factors).
The minimum number of shares to withdraw physical bullion would be 500 shares = 5 grams (plus fees, shipping, etc.)

Troy Ounces
If we go with troy ounces, 1000 shares = 1 troy ounce.
At current BTC/USD prices, each share would be about 0.13 - 0.16 BTC (price subject to change based on a number of factors).
The minimum number of shares to withdraw physical bullion would be 250 shares  = .25 ounces (plus fees, shipping, etc.)



As you can see, going with troy ounces would make the share price much higher. Bullion overhead at 1/4 ounce is still pretty high (and already include in the share prices). The bullion overhead drops significantly at 1 ounce bars/rounds AND at 10 gram bars; but this might exclude some (casual) investors from ever being able to take physical delivery. Should the withdraw quota be 1 troy ounce OR 10 grams?

Again, I still have time to revise the asset contract. These changes can be implemented. But I need to know if there will be enough interest to justify making any of the proposed changes. I want to provide an asset that makes affording gold bullion accessible to everyone.

Please make you opinion matter. Increase you post count and let me know what you think.

One option is to price shares in SPOT only.  If someone wants to take delivery then they can pay a coinage fee (you are already going to charge shipping and possibly insurance on large deliveries anyways right)?  Then your gold reserve can be a mix of various coins (1/4 oz, 1/2 oz, 1 oz) and bars (5 oz, 10 oz).  There is one limitation to this though.  Your cost (until delivery occurs) will be higher than the net value of shares.  ETN generally handle this by either a) getting a cut of tx fees and/or b) doing a reverse split to cover fund operating costs (i.e. 100 shares is reverse split to 98 = 2% fund operating cost).  My understanding is that no exchange currently offers the ability to do reverse splits or entitles funds to a % of transaction fees.  You could roll all your fees/cost/profit into the delivery portion but it may mean you are equity "rich" and cash poor if you issue a lot of shares and nobody takes delivery.

Still having the fund be in spot only is the cleanest way to handle things, I would try to think of a way doing that.  Otherwise it is going to get "ugly" if/when you start mixing coins coin sizes (or buying coins in bulk which have a lower premium relative to spot).

If the legal aspect wasn't so risky I was considering opening a bitcoin denominated gold ETF using the method above.  Of course now I have way more than enough projects to occupy my time.

I have decided to stick with grams.

This would allow for shareholders to transfer shares from LTC-GOLD <-> BTC-GOLD.  This would only work if there are unsold shares of the requested fund. For example, if there are 200 shares left unsold from a bar of gold bullion, up to 200 share are available to be transferred.
The number of unsold share are available at the publicly available Bullion Inventories spreadsheets of each fund (LTC-GOLD (https://docs.google.com/spreadsheet/ccc?key=0AqLxDN0JzEUNdFNkcG5SNWpfdVdCY1hicE1FVWplZFE)  BTC-GOLD (https://docs.google.com/spreadsheet/ccc?key=0AqLxDN0JzEUNdE9vNG1zZWlrUTIwbFhrZzVtSUowc3c)).

Since both LTC-GOLD and BTC-GOLD equal 0.01 grams of gold bullion per share, I thought it would be a bonus feature to allow share holders to transfer shares from one to the other. All other contract rules will still apply. There is still a 500 share withdraw minimum in each fund. But by being able to move shares from one fund to another, it will be easier to achieve this goal with out the penalty of buying in both funds.

Note: Bullion inventories will never intermingle.  This will not affect the total number of shares in either fund as only unsold shares are eligible to be transfered. This will also not affect anyone who only wishes to invest in one fund only.

The BTC-GOLD contract has been updated to reflect this change:

Share transfer between LTC-GOLD and BTC-GOLD (on the BTC Trading Corp. exchange) can be requested.
Requests must be made in multiples of 100 shares.
Requests can only be completed if there are enough unsold shares available on the requested fund.
There is a fee of 5 shares per transfer.
Please contact the asset issuer to make your request.

Bar added to BTC-GOLD inventory (https://docs.google.com/spreadsheet/ccc?key=0AqLxDN0JzEUNdE9vNG1zZWlrUTIwbFhrZzVtSUowc3c):


http://i46.tinypic.com/29c8mqf.jpg

Sunshine Mint 5 gram

Shares will be released is small batches.

+1 to an issue who communicates and shows the shareholders and the public that things are real. :)

I may be buying some myself. I think the market is only going to go up.
Definitely a better way to buy gold than my previous adventure a decade ago with an online gold trading site that has storage fees.
I put $100 when gold was still under $400... I looked the other day, with monthly fees, the account still exists..
I have $2 worth in gold left. So glad I put that money in, and the value went up. :P

Thanks. We also had our first bullion withdraw (http://forum.litecoin.net/index.php/topic,633.msg5053.html#msg5053) on the LTC-GOLD (https://www.litecoinglobal.com/security/LTC-GOLD) asset.

The increasing price of BTC vs USD is making shares more affordable.

Remember, if you are looking to purchase 100 shares or more, please send a PM or find me on the BTC-E chatbox. I will get you the most up-to-date pricing and will direct transfer shares to avoid fees.

The price of USD vs BTC has been on a steady increase. This has caused the price per share to drop.

Small walls will be on the exchange until the current bar of bullion is sold.
If you are interested in purchasing 100 or more shares, please contact me. You can send a PM or usually find me on the BTC-E chat box. I will quote you the most up-to-the-minute pricing.

The Bullion Inventory (https://docs.google.com/spreadsheet/ccc?key=0AqLxDN0JzEUNdE9vNG1zZWlrUTIwbFhrZzVtSUowc3c) now has relevant links to the forum topic where photos of the bars can be viewed.

I release shares in small batches. After those are sold, the market sets the price. Some people are content with holding shares and set lofty prices.
More will be released until a bar is completely sold. Is there is demand, another bar will be added to the inventory and sold. 

"TRADING HAS BEEN HALTED ON BTC-GOLD BY THE ISSUER."

Could you share the reasons for this, please?

Please note the date of that announcement.

"TRADING HAS BEEN HALTED ON BTC-GOLD BY THE ISSUER." is a result of me finalizing the asset contract back in December 2012. This was done before the first share was sold.
The asset has been operating continuously since.


If you want to see another example, take a look at my MiningCo.ETF asset. Again, I changed the asset contract several times while finalizing it--all before the first share was sold. And again, it has been operation continuously since.



But how come other assets don't have "Trading has been halted....?"

btct.co has undergone some changes since these early assets were released. Now, the exchange doesn't post a "Trading Halted" event when you change the asset contract before the first share is sold. (See my newer NASTY-PT asset.)

A second bar has been added to the bullion inventory.

A Valcambi 5 gram in assay card.

Photo showing both bars:

http://i44.tinypic.com/v45j6x.jpg




You can always view the Bullion Inventory on Google Docs:
https://docs.google.com/spreadsheet/ccc?key=0AqLxDN0JzEUNdE9vNG1zZWlrUTIwbFhrZzVtSUowc3c

BTC-GOLD shutting down.

Due to the exchange closing, BTC-GOLD will also close down operations.
If you have 500 or more shares, you may request delivery of your gold by sending a PM or an email. The 15 share handling fee will be waived, but you will still be responsible for all shipping fees (including insurance), and any taxes/customs/import fees imposed by your country. Waiving the handling fee is a special offer not in the asset contract.
If you have 499 shares or less, or don't want to take delivery of gold, then your shares will be liquidated at spot prices. This follows the asset contract.


Please make sure to set a Public Withdraw address in your exchange account. This is vitally important. DexX7 (who manages Ciphermine-PT) has a great "how-to" post here:
https://bitcointalk.org/index.php?topic=283947.msg3233637#msg3233637


FAQs


Will I still be able to trade?
Yes, you will still be able to trade. If you want to sell your shares now, your are free to do so. You have until Oct 7 (when the exchange will stop market trading).


If I just wait to for my shares to be paid, how much will I get?
I don't know. The gold spot prices go up or down just like any other asset. It depends on when they are sold.


When will the "left over" shares be sold? When will I get paid?
I plan to have everything sold by the end of October. Until then, the asset will remain trading for as long as possible until the exchange halts trading.

---

Thank you for putting your trust in me. I had fun managing this asset.


-Carnth


P.S. If you have any questions, please ask!

BTC-GOLD shutdown official plan for shutdown.

Trading will remain open until btct.co stops market trading.

If you have 500 shares, you may request delivery of your gold by sending a PM or an email. The 15 share handling fee will be waived, but you will still be responsible for all shipping fees (including insurance), and any taxes/customs/import fees imposed by your country. Waiving the handling fee is a special offer not in the asset contract. You do not have to request delivery.

All remaining shares will be paid out at the spot gold price some time on 10 October USA time. The formula to calculate the price per share is:

(Gold troy ounce USD Spot price / 31.1034768 ) / (USD price of BTC) / 100 = price per share


Explanation of formula:

Spot price / 31.1034768: There are 31.1034768 grams in 1 troy ounce. This give us the Spot price per gram.
USD price of BTC: Will be taken from BTC-E
100: Is the number of shares that equal 1 gram


If you have any questions, please post.

Liquidation will be as follows:




The actual numbers are:

($1301 / 31.1034768) / $124.25 / 100 = 0.00336645 per share

Thank you. BTC-GOLD is closed.