What would stop me from issuing gold backed bitcoins?

[bg002h]

Don't get me wrong, bitcoin doesn't need backing any more than the US dollar does...and this concept is exactly the opposite of what makes bitcoin awesome...but say I had 1 kg of gold (which I don't) and wanted to promise to present a share of the gold to anyone who held a bitcoin...preferably a subset of all bitcoins that I charged a premium for...and call them GoldBits or something equally silly...would it be as easy as duplicating the www.bitbills.com setup and fixing the total number of shares to issue? Redemption would be by returning a valid bitbill with only the original transaction on it and shipping off the gold...in this sense, bitbills could be used to share anything (as long as you trust the central authority...always a bad idea but could work amongst friends or certain groups).

On a completely unrelated note, anyone looking to compile vanitygen or oclvanitygen (to get an address like this: 1DrGossc3QidjzgDXzveCAQGiPWsoiDZ8C) on a Mac, pm me...the makefile for v0.17 on github and the makefile in the forum don't quite cut it. I'm just a "newbie" by forum rules, so I can't post elsewhere.

DrGoss

[julz]

My first impression is that it could be workable.

I imagine also that redemption wouldn't require return of the physical bitbill-like card.

You could allow people to open the card and trade it openly on the p2p network - even in fractions.
A website could be setup which could see from the blockchain where all the fragments are. You could allow redemption of some minimum amount - so that if these were being traded around in fractions someone would have to accumulate a certain amount and spend back to your website to get the gold.

It would be risky to put these gold backed coins into a normal bitcoin client - as it'd be very easy to accidently spend them as input to an ordinary BTC transaction - but a modified client could track which coins were issued by you - and online wallet services could also implement this in cooperation with your site.

[qbg]

It would probably be best done by creating a new block chain. The genesis block would pay you the total amount of GoldBits (which could be more than you would initially distribute, assuming you want room to add more gold to the network later) that there will ever be and every block after that would generate none.

Alternatively, you could Open Transactions to create your gold backed currency.

[defxor]

On a completely unrelated note, anyone looking to compile vanitygen or oclvanitygen (to get an address like this: 1DrGossc3QidjzgDXzveCAQGiPWsoiDZ8C) on a Mac, pm me...the makefile for v0.17 on github and the makefile in the forum don't quite cut it. I'm just a "newbie" by forum rules, so I can't post elsewhere.

What's the problem with it? I based my edits off Dino's makefile (to build against newer OpenSSL) and "it works for me" but I'd be happy to repost your findings in the vanitygen thread if you'd like.

[ElectricMucus]

That wouldn't really work with gold since it would only able to account for those 'special' bullion minted by the central authority.

To make it really work there would have to be a decentralized validation system like in plain bitcoins, only physical. Lets say you claim to have possession of a certain goldcoin known to have a certain amount of gold in it. The system could invite people who live near you and they can then validate your possession. In return you have to validate others.

There would have to be a motivation or reward to be very thorough in the validation of bullion like the possibility that the person who validates a claim of possession could be able to be paid with the bullion he validated in future transactions.

[metalmadnesstv]

i would buy gold or even silver backed bitcoins ?
would have to be physical tho not "virtual"

[bg002h]

I upgraded to the newer OpenSSL hoping to compile with Dino's makefile...it pooped out...oddly enough, things compiled after running make against the makefile.osx in the package followed by running Dino's. It's a pretty simple makefile, but I confess to not digging into it, I was just kinda happy that it worked!

On a completely unrelated note, anyone looking to compile vanitygen or oclvanitygen (to get an address like this: 1DrGossc3QidjzgDXzveCAQGiPWsoiDZ8C) on a Mac, pm me...the makefile for v0.17 on github and the makefile in the forum don't quite cut it. I'm just a "newbie" by forum rules, so I can't post elsewhere.

What's the problem with it? I based my edits off Dino's makefile (to build against newer OpenSSL) and "it works for me" but I'd be happy to repost your findings in the vanitygen thread if you'd like.

[bg002h]

If I put, say, 10 mBitcoins into an address, does the block chain contain enough info to follow those 10 mBitcoins even if they are split into uBitcoins over many transactions? I suppose if they GoldBits are only ever split and BTC are never added to a GoldBit address, then the info would be there...but as soon as Bitcoins were added to an address that contained GoldBits, the next split would be impossible to parse into BTC and gBTC...maybe a dilution factor could be calculated?

I agree that independent, decentralized verification would have to be in place for this to work...kinda like a separate block chain idea also mentioned here...people need some hope of gain to participate in verification...I guess a transaction fee lottery might work

My first impression is that it could be workable.

I imagine also that redemption wouldn't require return of the physical bitbill-like card.

You could allow people to open the card and trade it openly on the p2p network - even in fractions.
A website could be setup which could see from the blockchain where all the fragments are. You could allow redemption of some minimum amount - so that if these were being traded around in fractions someone would have to accumulate a certain amount and spend back to your website to get the gold.

It would be risky to put these gold backed coins into a normal bitcoin client - as it'd be very easy to accidently spend them as input to an ordinary BTC transaction - but a modified client could track which coins were issued by you - and online wallet services could also implement this in cooperation with your site.