Quote from: mpfrank on June 25, 2011, 05:48:03 AM

I think you need more capital. Eventually there will be 21,000,000 BTC, and so at 3 BTC / gram you will need 7,000 kg of gold (in case everyone decides to cash out).

No, I don't have to backup all the bitcoins, I need only to backup those who would like to trade bitcoin for gold. The number would be significantly smaller.

Here is my calculation. According to MtGox, the trade volume for USD is around 90k bitcoins everyday. Suppose that 1/10 of them would like to trade bitcoins with gold, that would be 9k bitcoins. So I need to prepare 3 kilograms gold. Therefore, minimum speaking, 3 kilograms is enough at this stage.

However, in order to stabilize the price, I need to prepare at least ten times of that amount. Therefore, 30 kilograms of gold would be a more reasonable number.

Considering the bitcoin economy is growing, 100 kilograms is the amount that I need to prepare.