Quote from: imperi on July 09, 2011, 03:09:46 AM

Quote from: kwhcoin on July 09, 2011, 03:07:22 AM

Quote from: imperi on July 09, 2011, 02:52:51 AM

Quote

Frequent auctions of 1000 goldcoins would be scheduled whenever there were at least 1000 goldcoins available for purchase. The minimum auction reserve price for 1000 goldcoins would be set at the price necessary to purchase an ounce of gold (i.e. gold's spot price plus around 3%). If the inventory of goldcoins available for purchase goes below 1000 goldcoins, then auctions are placed on hold until the total goldcoins over time curve makes it possible for more goldcoins to be available for purchase. Lastly, anyone can redeem 1000 goldcoins at any time and receive the current value of an ounce of gold less a storage fee which would be around 0.2% per year starting from the launch of Goldcoin until the date the goldcoins are redeemed (i.e. if you redeemed your goldcoins in five years from the launch of Goldcoin you would have a little less than 1% deducted from what you got for redeeming your goldcoins).

How is the auction reserve price set? Where is the auctioning happening? Where can you redeem gold?

The reserve price is set as a fixed ratio between gold and goldcoins. In my example I just picked 1000 goldcoins to 1 ounce of gold to be the fixed ratio. The auctions could take place on a website. The bids could be done with bitcoins (using the conversion rates between bitcoins, dollars, and gold) and you could also redeem goldcoins for bitcoins (using the conversion rate between bitcoins, dollars, and gold). Of course you could also use a service like goldmoney.com to to directly give people gold when they redeemed their goldcoins. I'm not sure if the details I picked are the best, but I wanted to pick some numbers to illustrate the Goldcoin concept.

Hypothetically, what happens when these websites don't feel like giving people gold back or they shut down?

The failure scenario you bring up would render Goldcoin to be like Bitcoin with nothing backing the coins. However, at least with Goldcoin there is a chance for there to be a backing.