Whoa-what? If the demand for gold drives a price increase in gold, there is no ‘rebalancing’ possible to keep one’s ability to purchase gold constant without putting additional reserves into the bank. Likewise, if bitcoin tanks to the point where an ounce of gold can buy all ~21 million bitcoins, but MB has twenty ounces of MG outstanding, it becomes impossible to redeem them for bitcoin (and they were never redeemable for gold).
MB could theoretically avoid both cases by keeping a full reserve of gold, selling gold only as needed to get bitcoins; in the case where bitcoin becomes worthless, MB could effectively set the exchange rate of gold for bitcoin, since there would be no other sellers. If gold became more valuable but bitcoin remained a medium of exchange, MB could simply sell gold at the market rate for any currency convertible to bitcoin.
Whoa-what? If the demand for gold drives a price increase in gold, there is no ‘rebalancing’ possible to keep one’s ability to purchase gold constant without putting additional reserves into the bank. Likewise, if bitcoin tanks to the point where an ounce of gold can buy all ~21 million bitcoins, but MB has twenty ounces of MG outstanding, it becomes impossible to redeem them for bitcoin (and they were never redeemable for gold).
MB could theoretically avoid both cases by keeping a full reserve of gold, selling gold only as needed to get bitcoins; in the case where bitcoin becomes worthless, MB could effectively set the exchange rate of gold for bitcoin, since there would be no other sellers. If gold became more valuable but bitcoin remained a medium of exchange, MB could simply sell gold at the market rate for any currency convertible to bitcoin.