BitGold = Bitcoin type currency backed by gold

[cnovaisg]

Bitcoin technology where 1 Bitgold would be backed by 0.1 ouce of gold.

The issuers would sell new Bitgolds backed by a pool account of gold (using a Kitco or Goldmoney account).

[Foxpup]

Why? The sole purpose of Bitcoin technology is to allow monetary transactions without a central issuer. If you've got a trustworthy person with a bunch of gold in a vault somewhere issuing the currency, what do you need Bitcoin for? More importantly, if you need a trustworthy person with a bunch of gold in a vault somewhere (ie, the whole system would collapse if anything ever happened to this person or his gold), then Bitcoin technology won't (and can't) help you. What exactly do you hope to achieve by this?

[DeathAndTaxes]

Exactly if you have a central issuer there is no need for a blockchain, mining, 51% attack risk, doublespends, etc.

[cnovaisg]

Think you are right about the Bitcoin strong side.

The thing is that gold has demand and there are alreay many ways of opening gold physical accounts, but the problem is at transaction level.

Not easy to spend or transfer gold accoount units, so there is a limited circulation. And that is a strong pont in Bitcoin technology.

With so much physicall gold already present and used internationally and locally, but more as storing value, the potential of providing a much more easy way to transfer it instantly could be a game changer.

Yes,there is the issuer thing, and the issuer would have probably to provide a real time auditing process, maybe using third party services as goldmoney.com,.

The thing here is that there is probably a business to be explored for more hard currency types.

[ColonelCrypto]

Impractical and absolutely pointless.

Just buy gold and use bitcoin to transact it.

Physical precious metals and crypto working together would be greater then either used exclusively.

[cnovaisg]

In fact issuing could be descentralized.

The entity managing it just certifies that the owner of gold made a deposit of X ounces of gold in a gold physical account receiving X bitgolds that he will be able to use.

At any time, a bitgold owner is able to redeem the bitgold for physical  through a gold account (kitco or goldmoney), but this is not the point.

BTC technology would allow a flow of bitgolds (and in fact not centralized gold Exchanges) the same way as bitcoins.


In a more general sense Bitcoin concept probably has many more aplications. 

[2weiX]

easily doable on ripple.

[Foxpup]

Not easy to spend or transfer gold accoount units, so there is a limited circulation. And that is a strong pont in Bitcoin technology.

Actually, that's not the strong point of Bitcoin. Electronic payment networks using digital signatures to authorise transactions are old hat. That's how wire transfers work internally. The strong point of Bitcoin is that it issues currency on such a payment network without the involvement of a bank or other centralised institution. Which leads to the next point:

In fact issuing could be descentralized.

The entity managing it just certifies that the owner of gold made a deposit of X ounces of gold in a gold physical account receiving X bitgolds that he will be able to use.

No, that's not decentralised. If this entity is dishonest, or is "persuaded" by the government to shut down their operation, or a movie villain drops an atom bomb on the gold warehouse, then the whole system falls apart. This entity is a central point of failure. The lack of such a central point of failure is what makes Bitcoin revolutionary.

[Smipp]

Binding cryptocurrencies to metals sounds pretty useless. Imo not going to work.

[diamondcave]

 I thought of this too, I think it could work.

[DeerApple]

Go for it

[next89]

easily doable on ripple.

How?

[ihsotas]

Let me explain why this is a bad idea.

1.) It's been tried before, in the form of e-gold. You're trying to create an electronic/instant, anonymous transfer of real-world value. If you don't know what happened to e-gold, Google it or look at the following article, "Bullion and Bandits: The Improbable Rise and Fall of E-Gold":
http://www.wired.com/threatlevel/2009/06/e-gold/

2.) You're mixing a floating currency (BTC) with a (separately) floating commodity (GLD), an artificial one-man peg. I would actually be happy if you did this, because I would arbitrage the heck out of this. Unless you have the resources of a government behind you, eventually the peg will fail and I will own all the money that you put into propping it up. See George Soros and the 1992 ERM. If the British government can't sustain a peg, how could you?

3.) As others have said, the gold is somewhere, so your Bitcoins (which refer to the gold shares) are no different than your ownership of an electronic checking account, requiring the same trust as traditional banking (and with the same risks).

[Surprise]

We don't need a new altcoin like this, BTC doesn't have to be backed by anything as long as the protocol keeps it at the set amount and inflation rate, and BTC is still used to buy a wide variety of things.

[2weiX]

easily doable on ripple.

How?

you can create currencies at will in ripple.
so does exist, for example, the "favor".

there's a list of exisiting currencies somewhere on this forum.

[yakka]

Bitcoin technology where 1 Bitgold would be backed by 0.1 ouce of gold.

The issuers would sell new Bitgolds backed by a pool account of gold (using a Kitco or Goldmoney account).

Virtual

[cnovaisg]

I perfectly understand the arguments.

The only issue is to guarantee that bitgold units are really backed, and that is a line of business.

Example: people wanting to get bitgold would use a goldmoney account transfer to the issuer goldmoney account and that would create a bitgold. A bitgold owner would at any time be able to exchange bitgold for gold (in a goldmoney account) although that is not the point. The point is that bitgolds could now easily transferable or spent. 

In the end the bitcoin exchanges would be able to trade gold and yes, there would be arbitrage that would attract professional market makers.

But the point is the usability of a gold certificate. I am just not sure that the issuer is able to replicate bitcoin concepts for issuing bitgolds.