[BTCT.CO] BTC-GOLD: 100 shares = 1 gram gold bullion - Closing

[Carnth]

ANNOUNCE: 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You may request to have your shares withdrawn as physical gold bullion and shipped to you.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.

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[Carnth]

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.

[Carnth]

Good questions odolvlobo.

How do you plan to make a profit?

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.

How can you sell 5 g of gold with only a 1% premium and not lose money?

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.

How are operating expenses (legal, storage, insurance, administration fees, GLBSE fees, taxes, etc.) paid?

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

[bitcoinbear]

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?

[Carnth]

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

[Atlas]

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

[Carnth]

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.

[bitcoinbear]

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

[Atlas]

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.

[candoo]

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

[Carnth]

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.

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.

[bitcoinbear]

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?

[Carnth]

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.

[bitcoinbear]

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?

[Carnth]

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.

[Atlas]

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

[burnside]

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

[bitcoinbear]

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

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

[Carnth]

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

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.

[Carnth]

After months of glbse garbage. I am finally able to release this asset on btct.co.

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