If Bitcoin was backed by Gold, how would it change its adoption?

[akiliholmes]

If I were to create an exchange for BTC/Au how would this help or hurt Bitcoin adoption? What kind impacts would this have on cryptocurrencies?

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[umair127]

If I were to create an exchange for BTC/Au how would this help or hurt Bitcoin adoption? What kind impacts would this have on cryptocurrencies?

Well first of of all if it was to be backed, who will it backed by, They will need to have alot of faith for it get backed by gold.  but if we did have backers and it was group that was well known then it could help it, but it might hurt it as well.

[bl4kjaguar]

If you want more trading of BTC/XAU, get more shops to accept XAU. And BTC!


Actually, I was thinking that one could offer a leveraged gold product backed by bitcoin and controlled by SMS with connection to 1broker. Then, you could offer dollar-value insurance on the bitcoin gained from the gold trade.

[bl4kjaguar]

I think the impact of an exchange that allowed you to leverage your gold for trading instead of hoarding it would be radical. With gold I think it could make headlines. Already there is a site that is doing this with bitcoin and it looks like quite an attractive place for capital!

1broker.com userbase doesn't look like much only because it targets bitcoiners instead of gold bugs (and other non-coiners).

If you offered leverage then you could easily become popular with the right connections and some effort. Maybe next month JPM is recommending your product to clients... And to think, your site has this headline:

Don't hoard your Bitcoins gold.
    Invest or speculate: Leverages from 1-200.

[greenlion]

If I were to create an exchange for BTC/Au how would this help or hurt Bitcoin adoption? What kind impacts would this have on cryptocurrencies?

That's not "backing", that's just a market trading pair. Backing means that the currency represents a claim on a redeemable asset. Bitcoin itself functions as the asset.

[bl4kjaguar]

Apparently, one altcoin already has precious metal backing:

https://bitcointalk.org/index.php?topic=598224.0;topicseen

[spazzdla]

Apparently, one altcoin already has precious metal backing:

https://bitcointalk.org/index.php?topic=598224.0;topicseen

This will fail hard, google the liberaty dollar.  That is exactly what is going to happen, MERICA physically can't go kill the owner of bitcoin because their isn't one.  Merica is just going to go steal the gold and silver from whoever is holding it to back the crypto, zero questions asked.  They use the word terroism and everything is a green light.

[RodeoX]

I have heard a lot about gold backed assets and currency. For me there is only one gold backed store of wealth, gold. If you don't actually receive gold that you can hold in your hand, then you have nothing. I mean if there were a gold backed coin then I would rather have the gold than a promise of gold. 

[audrey-chicka]

I think it would make a big difference. People are more familar to gold.

[umair127]

I have heard a lot about gold backed assets and currency. For me there is only one gold backed store of wealth, gold. If you don't actually receive gold that you can hold in your hand, then you have nothing. I mean if there were a gold backed coin then I would rather have the gold than a promise of gold. 

true, there was site that use to this, ahh  yes E gold, wasnt that same what was egold doing saying ur money is backed with gold

[bl4kjaguar]

I would rather have gold on deposit in a leveraged trading account than gold in my hands. I would trust 1broker.com with my gold just like I trust them with my bitcoins today.

Merica is just going to go steal the gold and silver from whoever is holding it to back the crypto, zero questions asked.  They use the word terroism and everything is a green light.

It's scary to think that storing/hiding gold could become a risky endeavor due to US government monitoring in the near future:

Los Angeles County Sheriff's Department sent a civilian aircraft over Compton, California, capturing high-resolution video of everything that happened inside that 10-square-mile municipality

Even if you have gold in a brokerage firm, you can count on US government surveilance.

[Ibian]

It's not possible. It wasn't the last hundreds of times people thought halfheartedly about it and it won't be the next ten thousand times either. It's not part of the design.

[bl4kjaguar]

It's possible with Ripple though:
What is Payment Protocol “Ripple” and How Does it Allow for Physically Backed Digital Gold Currency Exchange

[Ibian]

Ripple is centralized. Also, have yet to see it properly explained, least of all by its backers.

[greenlion]

Ripple is centralized. Also, have yet to see it properly explained, least of all by its backers.

Reading Ripple forums is truly a scary experience. Anyone who thinks Bitcoin is a crazy cult ought to look at those people!

[jbrnt]

If a crypto is backed by gold, then the gold reserve would need to increase by the same amount as the block reward each and every day. If not, the price of the crypto would just fall in proportion to the increase in the supply of the crypto. Is this possible to implement? Yes, I guess so, but who would want to implement it? It takes a lot of investment with no real profits.

[STT]

See my avatar, that was a coin backed by silver.   It didnt take off for whatever reason, so far as I know.  It was from last summer but as you avatars cannot be altered now


Bitcoin cannot be paired with gold, they are dissimilar.  Gold if stored is a means to disrupt and confiscate value of the network and it would cause a failure unfortunately.   Gold is still used mostly by very large entities such as governments which have the military to guard its centralised value nature.
   The simple answer is if you pair btc to gold, it will be taken for taxes as history has shown many times over very many years.    The only way thats not true is if the gold is distributed and the word for that medium is gold coins, just doesnt add up sorry


You can pay a jeweller or bullion dealer in btc, its been done for a while. no reason why not, the exchange rate varies of course.  If you wanted a genuine link it would be oil as alot of energy is used to extract gold, so they are naturally paired

[byronbb]

If a crypto is backed by gold, then the gold reserve would need to increase by the same amount as the block reward each and every day. If not, the price of the crypto would just fall in proportion to the increase in the supply of the crypto. Is this possible to implement? Yes, I guess so, but who would want to implement it? It takes a lot of investment with no real profits.

It would just be a pre-mine. Each coin would be worth say, 1oz of gold stored in a vault and audited by a third party every x number of months. It's not an insane idea. There are ETFs that at basically the same thing such as http://www.centralfund.com/. My fear is google just does a pre-mine and backs a coin with a certain number of their shares. The GOOGLE COIN.....the coin that doesn't fluctuate madly and is instantly accepted everywhere.

[greenlion]

Backing just re-introduces counterparty risk and we're back at square one with this whole thing. The emergent awesome of crypto is that Bitcoin itself behaves as an asset.

A subjective theory of value makes the whole premise boil down to infinite regression reminiscent of a child asking "if god created everything the who created god?". If a crypto were backed by gold, then what backs gold?

[leopard2]

You do the backing, the FBI will come for you and steal your gold, so simple. Google Liberty Dollar.