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.