Method to bring the Gold to GLD

[jkeefer]

After much consideration I feel I may have a realistic way to directly associate GoldCoin to Gold.  I feel it's important to keep the community aspect and unregulated nature of cryptocurrency with any correlation between GLD and Gold.  With that in mind I feel the best way to associate is to create a community managed Gold Trust that uses a per-share voting system to direct the investment of GLD into GOLD assets, whether it's physical gold, Futures, ETFs, Miners or Mining equipment companies.

The premise involves participants to put their GLD in an individual Fund wallet, always remaining the property of the depositor.  Much like a CD, the coins would have to be committed for specific periods of time.  During that time those funds are used as collateral for any fund activities.  Whoever manages the fund would likely need actual collateral equal to the amount of the coins committed during the term of the investment.   That is the primary obstacle to this working.  Whoever guarantees the collateral would be entitled to some compensation.

The open of the trust and the gradual capitalization would take time.  Initial investments would be modest.  Dividends would be rewarded based on the performance.  All investments would be voted upon by shareholders, and individuals can elect to not participate in any particular investment strategy and opt to leave the GLD in an interest bearing cash equivalent, albeit very low interest.

As the fund evolves and the value of the GLD grows, the prospects become more lofty and the requirements for collateral will likely become more complicated.  I do not see these obstacles as insurmountable.

If the developers of GLD could integrate some of these features into the code itself, it would interesting.  I think a solution could be derived with a 3rd party website with a simple GLD web based wallet with a method to commit and lock funds, much like a escrow type site, to be placed in the trust.

I continue to mull different aspects and would like to get some feedback on what I presented so far.

Thoughts?

[agnusnatum]

40+ views and 0 (till now) replies – you should consider this a stunned silence...!

I think this is a very interesting concept that puts some meat on the bones of the idea that has been discussed previously on the boards (i'm sure @sizzflair would attest!). It would be a great selling point for GLD amongst the competition, with increased utility/adoption etc. I also suspect it would appeal equally to folk both inside/outside the crypto community, looking to diversify their investments.

Most intriguing is the idea of integration with the code/wallet, though not being a programmer would have no idea as to the complexities. I’m guessing we have talented members of the community however who could help develop the 3rd party website and I would be keen to help out via testing, donation etc.

Giving assurnce / garnering trust of would be investors does sound like the major challenge, but as you've suggested, not impossible; it just takes time, a considered and professional presentation, and the setting of appropriate expectations.

I would be interested to hear more of your thinking, and anyone else's!

[sizzflair]

Thanks for tagging me on this and mentioning what I brought up in past threads.

Read this thoroughly and what I (and other active/long term investors) need to look at how gold (precious metal in general) works. I only know the basics, so I'm going to see if I can find some free time to dive in this matter and do some research and learn how the gold market really works.

Thanks again for making some great suggestions.  Continue to refine this idea and let's all make some recommendations down the road for thr devs to pursue that may help GLD succeed in the future.

[tadspoles]

I think GoldCoin can fit in the precious metals world somehow as well.  I have no idea how to achieve this.

[jkeefer]

40+ views and 0 (till now) replies – you should consider this a stunned silence...!

Too funny!  Yeah I thought maybe I was off the mark...or perhaps running over familiar territory.

Since writing the post I have seen a similar idea, but not exactly, with Bitcoin and it's attempts to be related to gold.

My next goal is to write the plan in a formal document that contains the structure of the trust, present it here and see if we can form a board to oversee the execution of a plan to put the trust into motion.

Here is a description of an investment trust.  This is not to be mistaken for a "living trust" or "trust fund".

http://en.wikipedia.org/wiki/Investment_trust

The value of the trust and GLD would be affected by the value of gold, but GLD would not be directly tied to the asset.  With the prospect of inflation and the role gold plays in an inflationary environment - I think this is a HUGE win win scenario for GLD.

Sorry gotta roll, still at office and have some final paperwork to get out today.

thanks for your reply.

[jkeefer]

Thanks for tagging me on this and mentioning what I brought up in past threads.

Read this thoroughly and what I (and other active/long term investors) need to look at how gold (precious metal in general) works. I only know the basics, so I'm going to see if I can find some free time to dive in this matter and do some research and learn how the gold market really works.

Thanks again for making some great suggestions.  Continue to refine this idea and let's all make some recommendations down the road for thr devs to pursue that may help GLD succeed in the future.

I'll be home in about 30 mins.  What questions to you have?  I am not much of a gold investor, because it's just as easy to trade something that is correlated to gold, like the US Dollar.  There are a number of ways to invest in gold, and I want to point out, the GLD Coin Trust is not a required investment for those who participate can suggest investment strategies, they can be debated, and they would have to be opted in on.

Imagine your GLD Coin Trust wallet had the ability to allocate GLD to a bunch of investments like a 401k is spread around mutual funds.

it's 6...I have to get out of this office before someone asks me to do something else