I will still trade 3 bitcoins for 1 gram gold until my store of gold last.

Gongcheng

Why would I want to trust you that I will really get my gold?

If bitcoin crashes, everyone will want his gold back and this will be hugely damaging for you. How do I know that you do not just pull a Maddoff? So it is not about trust in gold, but it is about trust in you.

Why on earth should I trust a single person with a shiny web site more than 10.000 people with their GPUs? Wasn't bitcoin made for exactly that reason - not having to trust in a single person or bank or institution?

Maybe I do not understand your concept, but I cannot see a single reason how this would help bitcoin. Economically, I rather see the contrary: IF such a business opens up then this opens up big possibilities for manipulating bitcoin. We already today see how the Mt Gox case with Mt Gox being one of the largest exchanges, is damaging the reputation and exchange rate of bitcoin. Why would I want additional dependency of a single entity? Assume, you have a car accident; assume, your wife files for a divorce. What securities do I have that your wife does not take the gold into her pension fund? What securities do I have that your employees know the proper passwords? Why would I want to concentrate risk on one person and his promises? I do not see a good reason.

You write. I will still trade 3 bitcoins for 1 gram gold until my store of gold last Thats fine. But what if your store of gold is not lasting any longer? What, if it is stolen? What, if it is confiscated by your ex-wife? How do I know that I can trust you more than these guys in my inbox who every other days want my support to recover the inheritance of that nigerian general?

Oh. I forgot. I do see a good reason.

If someone wants to damage bitcoin, the logical move would be to go for more concentration and for more centralized structures.

If I were Visa or Mastercard: I would use a small percentage of my wealth to do some rollercoaster gameing with bitcoin. Buying some, letting hackers steal some, writing about it, selling a lot to dump the course again. Destroying trust.

So let me see... Just assume you do this business... More and more people buy into that gold backing stuff. And then, one day there is an SQL injection at some Mt Gox 2.0 and the exchange rate drops down. Some people want their gold backing. And, for some very interesting reason you are, umm, just not able to fulfill their demand immediately. DDOS maybe or what have you. 48 hourse of negative reporting ... bitcoin crashes even more.

In the end, at the price of a few kilograms of gold, you have successfully destroyed bitcoin's reputation.

This certainly is better than the perspective of losing the credit card fee business model all together.

Yes. If I were Visa or Mastercard, I would do it.

Glbse ( http://charts.glbse.com/markets/ ) allows for the creation of delivery contracts.  Delivery at expiration date can be in btc based on the day's market rate for btc/gold and need not be physical gold delivery.  Maybe you can create a contract like Gongcheng-Gold-Dec-2011 (symbol GONG-GCZ11)?  Based on your past reputation (based on successful contract delivery of GONG prefixed contracts) the market will find fair value for your contracts through active speculation.  Speculation is something that the bitcoin community is well versed, and comfortable with, it seems.

This is like trying to back silver with gold. It makes no sence, and furthermore, you will only create an arbitrage opportunity for savvy investors that will profit from you.

Those who believe in gold will speculate for gold, those believing in silver will speculate for silver, those believing in btc will speculate in btc and those who believe in fiat will be in fiat.  Creating a trading opportunity for all these parties to counter trade with btc will be priceless and stabilising for btc and will also add even more liquidity as forex markets do for fiat.  Arbitrage opportunities exists in all marketable goods as a price finding mechanism.  It is a win-win opportunity when one who needs potatoes can exchange to obtain it from someone at the other side of the world by giving that person btc.  Both might have had a vested interest in btc or potatoes before the trade.

Depending on your need at that stage and the relevant commodity/good fulfilling that need:

Potatoes - Making potatoe chips feeding your cattle use as a food additive, etc.
Gold - Use as an age old store of value electronics decorative use

or

Bitcoin - Use as a safe, secure, frictionless globalised accounting digital good system for the private key holder, paired with a publicly accessible key

Andes,

Can't you just register Andes-Gold-Dec-2011 (symbol ANDS-GCZ11) at Glbse.com and Gongcheng register Gongcheng-Gold-Dec-2011 (symbol GONG-GCZ11) contracts?  Based on both of your (and other users) reputation for contract delivery will the decentralized market not decide whose contract to counter trade on?

I think the issue is liquidity. Bitcoin prices swing wildly when there is low liquidity and so relatively large orders have the ability to move the market significantly.

Glad to hear it.

Be sure to let us know when you have it up and running....

I think your plan would be good for bitcoins, but I don't see how you could profit from your idea. If 3 bitcoins are more valuable than one gram of gold then nobody is going to exchange their bitcoins for your gold. If 3 bitcoins are less valuable than one gram of gold then your promise would cause you to exchange your gold for bitcoins at a loss compared to what you could get by selling your gold at market price and buying bitcoins at market price. It seems there is no way for you to win, but there is a way for you to lose.

usd is backed by bullets