[JumpCrisscross]

> Converting your gold token into gold and having it shipped to you may be problematic, but once you have the gold token, it's transferrable

"I want to sell you this gold token. You can't convert it to gold, because the gold was all stolen."

[seibelj]

As with any asset you don't physically own, you are trusting that it exists. Digix is insured, and any token backed by a physical asset you would need to trust the organization that issued it. But this is not rocket science - these types of businesses and the industry surrounding them have existed for a long time. The innovation, if you believe it's innovative, is that the representation of the asset exists as an ERC20 token.

[JumpCrisscross]

> these types of businesses and the industry surrounding them have existed for a long time

And they've failed, via common mechanisms, for as long. Hence why issuers of marketable collateral are tightly regulated. This "innovation" updates an administrative aspect that always worked fine while leaving the dicier back-end not only untouched, but less regulated than before. It's analogous to rolling back to an un-patched OS, changing the color scheme and calling it progress.