Would it be feasible to make signed gold bars, verifiable with some kind of public key?
Or by inserting all gold bars and their journey on a (perhaps blockchain-like) database verifiable by anyone?
Or by inserting all gold bars and their journey on a (perhaps blockchain-like) database verifiable by anyone?
2. This sounds sane and feasible, but I'm not sure how anyone would deal with a bar leaving and then re-entering the system. If I'm a jeweller, I might buy a kilobar and melt it for rings, etc. It's inscribed as having left my seller's stock, just as the bar I bought as a random individual. One bar is meant to reenter the market, the other one not so much... how would you deal with that?
Not a great solution, but it would reduce replay attacks.
The jeweler could notify the originator that they destroyed a bar.
So as an individual, I have to trust the originator to keep the whereabouts of my kilobar private?... This is most probably a very bad idea.
For buyers wanting privacy, the could have a mechanism for the seller to tell them to discard the signature. It makes it useless for future transactions of course, but it would prevent replay up until point.
But it’s also not traditional arbitrage. The producers of these counterfeit bars would likely be delighted to have the real gold minting houses certify and stamp their gold for a reasonable price. But they can’t because of sanctions or possibly capital controls. This counterfeiting is about bypassing market controls to trade illicit gold.
I'm not super knowledgeable about blockchain, but couldn't we arrange for jewelers and such to gift it to a special individual called dev_null, whose wallet keys have been intentionally lost?
That way, if every entity that handles or processes gold did the same, you could have a good idea of where each piece of gold comes from.
You can embed a chip which itself is hard to copy, or which tries to protect an internal private key used to attest to the authenticity of the item. Then you have to be sure these chips are themselves secure from cloning, and possibly worry about them being recycled off discarded genuine items and reused.
If you want to make an attempt with some sort of passive shared secret or serial number (e.g. QR code), then you probably have to rely on that number being tied to where the item was being sold (Lot 174351 was sold on Date X and Retailer Y) and being able to lookup that number to track the history of the item. This is probably good enough for verifying "First Sale".
Once the item is being resold, it becomes harder to verify that a static value has not been cloned onto a counterfeit item, unless you are registering the item to each successive owner, and explicitly handing off the registration (like how it is done with cars and VINs).
I do not know of a solution that uses a static value that isn't protected by some sort of HSM, that also maintains the privacy of the person holding the item - e.g. does not require some sort of registry.
Dooglius mentions PUFs - this is type of HSM which uses micro-imperfections in a physical structure to essentially implement a hashing function, which can be used to implement a challenge-response protocol. The challenge with PUFs is that by relying on an uncontrollable aspect of the manufacturing process, these same performance variations may not be stable across environmental changes (temperature, humidity, voltage, time, etc.). The more error correction you add to ensure the function is repeatable, the less truly unclonable the function may become.
I have no idea if there would be a way to read such a number non-destructively.
[1] https://link.springer.com/content/pdf/10.1007/BF03214762.pdf
I make the distinction with physical ownership over a gold-linked fund or future contract, sometimes refered to as paper gold.
Obviously most gold holders do not have metallurgical laboratories in their homes, so your assertion is half-wrong. Yes, there is no counterparty risk to the transaction: you hold the gold. But there is third-party trust that what you have is indeed gold.
Of course, I would be a bad Bitcoiner if I didn't mention that Bitcoin solves both of these problems. You can fully validate the quantity and validity of your bitcoin with your copy of the blockchain.
Unlike "blockchain people" though, I do not believe gold -- or any other physical object -- can be realistically tracked in a digital system. So I reject the "put gold on the blockchain" idea as a non-starter.
We cannot eliminate risk, but we can reduce and mitigate.
Another great victory for Blockchain.
[0] https://shkspr.mobi/blog/2018/06/how-i-became-leonardo-da-vi...