How will this "Proof of Reserves" and "Proof of Custody" work?
Why would coin holders trust you are honestly relaying the PoR and PoC of the custodians?
How do we know that you didn't make a deal with the custodians to keep a fractional reserve in exchange for interest?
Why not have the custodians make the PoR and PoC public, so we don't have to trust you, but only the custodians?
But really, I'm the most curious about proof of reserve and proof of custody. How are the custodians going to proof they really have the gold they say they have?
That's crucial.
We can be forgiven for believing that established gold bar sellers & custodians with whom we partner have a greater vested interest in their company's industry survival than cheating in the market by doing fractional reserve deals with us.
You bring up an excellent point that Bitcoin Tangible Trust could find itself the victim of a fraudulent gold seller targeting our company with outright dishonesty (at a distance) about their physical gold stores. How do we know it's provably-at-a-distance-true that our partners actually have the gold they say they will sell us or hold in custody?
As an immediate solution, we will let our custodians provide PoR and PoC on a daily basis and we will syndicate this data on our site. We are looking at
http://www.bullionvault.com/audit.do that appears to have solve the daily auditing-report problem, but it still not the provably-at-a-distance-true that you're asking.
Nonetheless, it's a start and we think a baseline industry-practice for any companies that want to do this business.
Good luck bro 