OK, so let me make sure I'm understanding this correctly:
- The coin cannot be mined, it can only be purchased on the Ripple network for BTC
- Presumably, the price of 1 GBC will be somewhere around 0.3 BTC, which would be roughly $130, or 1/10 oz gold at current spot price
- For each 1 GBC sold, devs will acquire 1/10 oz of gold and stick it in a vault or something to "back" the value of the coin
Assuming the above does actually happen, GBC will indeed be 100% backed by real, physical gold.
If and when the price of GBC falls below 1/10 oz gold at current spot price:
- "Intervention" will occur and the physical gold reserves will be used to guarantee the price stays above BTC value of 1/10 oz gold
The problem is, to do this, you must use BTC to buy GBC and force the price back up. But you don't have BTC. All you have is physical gold, remember? Every 0.3 BTC you gained from the sale of GBC was used to purchase physical gold, right?
quite correct, but: our initial bookbuilding lasts until april 22. everyone can hand in their order. in the meantime the gold price fluctuates. the book building price is a result of the orders of the investors and not of the gold price itself.
yes we deposit the gold and not the btc. in case the market price of GBC on the GBC/BTC market within the Ripple network would have been dropping below gold backed value and stayed there, we would sell gold and buy back GBC with the appropriate amount of BTC.
anyhow, we believe that this will not happen very often. there is a lot of incentive for the investors to sell GBC for a higher price, and less incentive to sell GBC for a price less than the value the coin inherently holds due to the gold backing
