Hypothetical Bitcoin clone except backed by gold

[vector76]

You don't need a separate currency since you can just create a company that will sell gold for bitcoins.

Someone selling gold for bitcoins at a set price is not a promise but only a temporary promise to exchange gold for bitcoins at that price and that temporary promise can change at any time. If bitcoins were backed by gold there would be a permanent promise to always sell gold for bitcoins at a set price. A temporary promise that can change at any time is very different from a permanent promise. Someone selling bitcoins for gold is very different than someone backing bitcoins with gold.

100% agree.  It bugs me when people think that having a market for exchanging gold for bitcoins is as good as backing, or can even be compared to backing.  If that's the case just use your goddamn FRNs, I guess those are backed by gold because you can buy gold with them.

I changed my mind about bitcoins not being backed by anything.  Bitcoins are backed by general ignorance about the underlying nature of money.  And by the way so are USDs.  It turns out this type of backing works just great... until it doesn't.

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[FreeMoney]

Maybe it's easy to store gold for .2%/yr until the gov charges you 2% inventory fees or extra blah blah tax, now you have to fight the government head on when they know where your gold is or break your promise.

We've done promises, screw that.

[Stardust]

If currencies backed by gold would have worked, there wouldn't be any fiat currency today. Currencies backed by anything are a joke, and fiat currencies are a scam. But most important of all is that you should not trust a central authority.

The place of gold is in electronics, jewelery, decorations, and food (for some).

[billyjoeallen]

How about a hypothetical Ferrari clone except it's pulled by a horse?

[coblee]

There are just so many potential problems with this idea:

• You want to have a central authority distribute goldcoins and have them store gold as backing?
• Is the central authority going to pay to store the actual gold needed for backing.
• Where does that money come from?
• Who is this central authority and why would they do this for free?
• Why would they not steal your gold?
• Where do the goldcoins come from if not mined?
• Does the central authority just mine the goldcoins themselves and then sell it for gold?
• If mining does not create goldcoins, then there would be no miners. If there are no miners, who keeps the blockchain secure?
• Where does the initial trust for goldcoins come from? Why would I use real money/gold to buy goldcoins?

[imperi]

There are just so many potential problems with this idea:

• You want to have a central authority distribute goldcoins and have them store gold as backing?
• Is the central authority going to pay to store the actual gold needed for backing.
• Where does that money come from?
• Who is this central authority and why would they do this for free?
• Why would they not steal your gold?
• Where do the goldcoins come from if not mined?
• Does the central authority just mine the goldcoins themselves and then sell it for gold?
• If mining does not create goldcoins, then there would be no miners. If there are no miners, who keeps the blockchain secure?
• Where does the initial trust for goldcoins come from? Why would I use real money/gold to buy goldcoins?

I think anyone can mine the goldcoins, and then redeem them at the exchanges for gold.

[coblee]

I think anyone can mine the goldcoins, and then redeem them at the exchanges for gold.

I don't think that's the OP's idea.

Why would any exchange back goldcoins with physical gold when anyone can mine for goldcoins? Exchanges like mtgox have traders on both the buy side and the sell side and that's how they come to the USD/BTC exchange rate. You don't just start an exchange and permanently set the exchange price yourself. If you do that, you will find that people will trade the worthless goldcoins to you for real gold and no one will trade away real gold for these goldcoins.

Only governments can really pull this off. That's because governments have a lot of gold, they have an incentive to make fiat currency successful, and they can force their citizens to pay tax in fiat currency. Tax forces people to have to trade in their gold for fiat currency. None of this is true for goldcoins.

[Helge44]

It would be rather a cheap and reliable service to convert directly BTC to gold and silver on Goldmoney.

[Pan Troglodytes]

You know mate, there is nothing like having a physical gold bar or coin. Financial institutions have been trying to play around selling all kinds of gold certificates, futures, etc. It is all paper and in the end it can be invalidated with a single strike of a pen.

Unfortunately, the same holds with goldcoin. I would never prefer it over a piece of physical metal. Sorry mate.