5 ms·

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 blockchai

by phn 7y ago

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?

vasco 7y ago
So anyone would be able to know if you have 2 gold bars on your backyard?
moviuro 7y ago
1. Without giving it much thought, it's probably impossible to prevent "replay" attacks. If I have listed tens of valid signatures, I can use them on my new fake bars on the other side of the world, hoping my fake bar with good signature never meets its genuine alter-ego. 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?
- maxerickson 7y ago
  The originator of the bar/signature could track each one and disavow the ones they lost track of. Not a great solution, but it would reduce replay attacks. The jeweler could notify the originator that they destroyed a bar.
  - moviuro 7y ago
    > disavow the ones they lost track of 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.
    - maxerickson 7y ago
      Sure, it wouldn't serve all purposes. But for a jeweler that wanted an auditable supply chain, it would be fine. 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.
- petre 7y ago
  Why would you melt marked gold to make jewlery and diminish its value? You can use regular gold for that.
  - layoutIfNeeded 7y ago
    At that point why use gold at all? If the value is in the marking, not the gold itself, then there are much better ways to create hard to duplicate markings than stamping them into gold bars...
    - petre 7y ago
      You can view it as certified gold, where the certificate is stamped directly on the item by the CA (refinery). There is a certain added value in the marking because the marked piece is standardised in purity and weight, so one used to be sure they were getting the real deal. Well, not anymore. That's exactly what the forgers are speculating: the market price difference between regular and marked gold.
      - dpark 7y ago
        That’s not speculation. That’s arbitrage. 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.
      - mruts 7y ago
        They are not looking to actually obtain any exposure on the stamped gold or illicit gold. The goal here is to arbitrage between these two prices and while doing so convert dirty money into clean money. Speculation is the last thing these people are doing or want.
- knodi123 7y ago
  > One bar is meant to reenter the market, the other one not so much... how would you deal with that? 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?
  - phn 7y ago
    The jeweler could be able to mark his bar as destroyed in the chain, perhaps registering the rings in a separate chain? 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.
tantalor 7y ago
https://verisart.com/ https://verisart.com/ is a blockchain thing for real-world artifacts.
- martin_a 7y ago
  Ah, the site where somebody proved himself to be Leonardo da Vinci, I remember. [0] Another great victory for Blockchain. [0] https://shkspr.mobi/blog/2018/06/how-i-became-leonardo-da-vinci-on-the-blockchain/ https://shkspr.mobi/blog/2018/06/how-i-became-leonardo-da-vi...
divbyzer0 7y ago
That would defeat the purpose of owning physical gold. Most physical gold owners do not want any third party dependancy, or couterparty risk. They would stronly prefer discretion. I make the distinction with physical ownership over a gold-linked fund or future contract, sometimes refered to as paper gold.
- clarkmoody 7y ago
  To fully validate your gold holdings yourself, you must determine that the metal is actually gold at the purity stamped on the coin/bar. Or you must trust the authority whose image appears stamped in the object. 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.
  - newphonewhodis 7y ago
    >most gold holders do not have metallurgical laboratories in their homes, https://www.amazon.com/slp/gold-testing-kit/25dkrbmt9yxy6dd https://www.amazon.com/slp/gold-testing-kit/25dkrbmt9yxy6dd
    - divbyzer0 7y ago
      Thanks, I was not aware of these. I'll have to research. I suspect they're somewhat desctructive, but could be justified with more than 1000USD worth of metal.
    - kss238 7y ago
      Will those be able to differentiate between 99.99% and 99.90%? Because that's the difference in purity for these fakes.
Cthulhu_ 7y ago
Don't gold bars get serial numbers already? That should be enough to allow for track & trace purposes, and if the bar is found at multiple places at once, one of them is a fake.
- clarkmoody 7y ago
  Who keeps the regsitry of serial numbers?
  - sailfast 7y ago
    The refinery seems to keep a registry of what they have produced (in the case of the Swiss refinery in the article). As a a result, the forged bars ended up having a duplicate serial number which is how they found out they were getting high-quality gold in with forged refinery stamps.
- sailfast 7y ago
  Yes. This is how JPMorgan found the counterfeit bar in the article.
dooglius 7y ago
https://en.wikipedia.org/wiki/Physical_unclonable_function https://en.wikipedia.org/wiki/Physical_unclonable_function
zaroth 7y ago
This is the same question you can ask about any counterfeit good. I think the general problem space is very interesting. 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.
- michaelt 7y ago
  If you had a modern gold bar with a secure ID chip, wouldn't you transfer the ID chip to a gold-plated-tungsten replica [1] and recast the old bar into a pre-ID-chip-era bar? [1] https://www.alibaba.com/showroom/tungsten-gold-bar.html https://www.alibaba.com/showroom/tungsten-gold-bar.html
- tzs 7y ago
  Gold bars aren't pure gold. There are small amount of impurities [1]. I wonder if you could make gold bars where you vary the ratios of those impurities along the length of the bar to encode a number? 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 https://link.springer.com/content/pdf/10.1007/BF03214762.pdf
newphonewhodis 7y ago
I’m actually not sure how much money I have, but I do know how many pounds of money I have. In saying that, anything that requires electricity to track a bar of gold is not going to catch on. What if I want to remint it into smaller 50 gram bars? Reconstitute it into a larger XX gram denomination? Is someone really willing to go out and buy a widget to do that?
layoutIfNeeded 7y ago
No. After all, a gold atom is indistinguishable from any other gold atom.

by phn 7y ago

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?

vasco 7y ago

So anyone would be able to know if you have 2 gold bars on your backyard?

moviuro 7y ago

1. Without giving it much thought, it's probably impossible to prevent "replay" attacks. If I have listed tens of valid signatures, I can use them on my new fake bars on the other side of the world, hoping my fake bar with good signature never meets its genuine alter-ego. 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?

maxerickson 7y ago
The originator of the bar/signature could track each one and disavow the ones they lost track of. Not a great solution, but it would reduce replay attacks. The jeweler could notify the originator that they destroyed a bar.
- moviuro 7y ago
  > disavow the ones they lost track of 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.
  - maxerickson 7y ago
    Sure, it wouldn't serve all purposes. But for a jeweler that wanted an auditable supply chain, it would be fine. 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.
petre 7y ago
Why would you melt marked gold to make jewlery and diminish its value? You can use regular gold for that.
- layoutIfNeeded 7y ago
  At that point why use gold at all? If the value is in the marking, not the gold itself, then there are much better ways to create hard to duplicate markings than stamping them into gold bars...
  - petre 7y ago
    You can view it as certified gold, where the certificate is stamped directly on the item by the CA (refinery). There is a certain added value in the marking because the marked piece is standardised in purity and weight, so one used to be sure they were getting the real deal. Well, not anymore. That's exactly what the forgers are speculating: the market price difference between regular and marked gold.
    - dpark 7y ago
      That’s not speculation. That’s arbitrage. 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.
    - mruts 7y ago
      They are not looking to actually obtain any exposure on the stamped gold or illicit gold. The goal here is to arbitrage between these two prices and while doing so convert dirty money into clean money. Speculation is the last thing these people are doing or want.
knodi123 7y ago
> One bar is meant to reenter the market, the other one not so much... how would you deal with that? 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?
- phn 7y ago
  The jeweler could be able to mark his bar as destroyed in the chain, perhaps registering the rings in a separate chain? 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.

tantalor 7y ago

https://verisart.com/ https://verisart.com/ is a blockchain thing for real-world artifacts.

martin_a 7y ago
Ah, the site where somebody proved himself to be Leonardo da Vinci, I remember. [0] Another great victory for Blockchain. [0] https://shkspr.mobi/blog/2018/06/how-i-became-leonardo-da-vinci-on-the-blockchain/ https://shkspr.mobi/blog/2018/06/how-i-became-leonardo-da-vi...

divbyzer0 7y ago

That would defeat the purpose of owning physical gold. Most physical gold owners do not want any third party dependancy, or couterparty risk. They would stronly prefer discretion. I make the distinction with physical ownership over a gold-linked fund or future contract, sometimes refered to as paper gold.

clarkmoody 7y ago
To fully validate your gold holdings yourself, you must determine that the metal is actually gold at the purity stamped on the coin/bar. Or you must trust the authority whose image appears stamped in the object. 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.
- newphonewhodis 7y ago
  >most gold holders do not have metallurgical laboratories in their homes, https://www.amazon.com/slp/gold-testing-kit/25dkrbmt9yxy6dd https://www.amazon.com/slp/gold-testing-kit/25dkrbmt9yxy6dd
  - divbyzer0 7y ago
    Thanks, I was not aware of these. I'll have to research. I suspect they're somewhat desctructive, but could be justified with more than 1000USD worth of metal.
  - kss238 7y ago
    Will those be able to differentiate between 99.99% and 99.90%? Because that's the difference in purity for these fakes.

Cthulhu_ 7y ago

Don't gold bars get serial numbers already? That should be enough to allow for track & trace purposes, and if the bar is found at multiple places at once, one of them is a fake.

clarkmoody 7y ago
Who keeps the regsitry of serial numbers?
- sailfast 7y ago
  The refinery seems to keep a registry of what they have produced (in the case of the Swiss refinery in the article). As a a result, the forged bars ended up having a duplicate serial number which is how they found out they were getting high-quality gold in with forged refinery stamps.
sailfast 7y ago
Yes. This is how JPMorgan found the counterfeit bar in the article.

dooglius 7y ago

https://en.wikipedia.org/wiki/Physical_unclonable_function https://en.wikipedia.org/wiki/Physical_unclonable_function

zaroth 7y ago

This is the same question you can ask about any counterfeit good. I think the general problem space is very interesting. 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.

michaelt 7y ago
If you had a modern gold bar with a secure ID chip, wouldn't you transfer the ID chip to a gold-plated-tungsten replica [1] and recast the old bar into a pre-ID-chip-era bar? [1] https://www.alibaba.com/showroom/tungsten-gold-bar.html https://www.alibaba.com/showroom/tungsten-gold-bar.html
tzs 7y ago
Gold bars aren't pure gold. There are small amount of impurities [1]. I wonder if you could make gold bars where you vary the ratios of those impurities along the length of the bar to encode a number? 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 https://link.springer.com/content/pdf/10.1007/BF03214762.pdf

newphonewhodis 7y ago

I’m actually not sure how much money I have, but I do know how many pounds of money I have. In saying that, anything that requires electricity to track a bar of gold is not going to catch on. What if I want to remint it into smaller 50 gram bars? Reconstitute it into a larger XX gram denomination? Is someone really willing to go out and buy a widget to do that?

layoutIfNeeded 7y ago

No. After all, a gold atom is indistinguishable from any other gold atom.