Bitcoin Forum

I've never looked into altcoins, it seems like most of them aren't really offering anything new.  However, I am wondering if anyone has proposed an altcoin that was purely based upon the dollar/euro?

I understand that many people may hate this idea because the "dollar is going to DIE DIE DIE!!" but bear with me and just forget about that for a minute.

What would be the challenges of an altcoin being entirely based on the dollar?  

I can see a future where bitcoin fails, but the technology behind it implemented into a nations currency.  

The Brits and Canadians in the Galactic Milieu (http://devtome.org/wiki/index.php?title=Galactic_Milieu) keep coming back to this idea, except they are thinking GBP and CAD, respectively, instead of USD.

The main problem is having such a low budget for securing the blockchain, because it is not really economically practical to let random miners out on the net create dollars or pounds out of thin air thus the coins have to be issued initially only to the "central bank", the issuers, the people who are committing to buying them at very close to the price of a CAD dollar or a GBP pound.

In these two cases, their blockchains are just like Bitcoin's will be at some future date: about 21 million coins, all issued, with mining being paid for only by transaction fees.

The theory seems to be that if all the coins do eventually get into circulation, then it should be possible to allow the price to start to float higher, if the market chooses to let it do so, but the backers will always stand ready to buy back each and every coin at very close to the price they sold it for.

Think like maybe sell them for 1.01, buy them for 0.99, something like that.

Initially the General Mining Corp (GMC) and General Retirement Fund (GRF) coins seem content to follow along with this as if their coins are only worth the same as a CDN (Canadian Digital Note), so they have scripts ready to keep putting inn orders to buy 100 CDN for 99 GRF or GMC and to sell 100 GRF or GMC for 101 CDN, and also for higher scales too like 1000 GMC or GRF for 1001 CDN and so on.

Thus they too hope to maintain a stable target price for their coins.

No USD has been contemplated yet mainly because the "American" civilisation is not yet an active player in the Galactic Milieu (http://devtome.org/wiki/index.php?title=Galactic_Milieu), but since Freeciv (http://devtome.org/wiki/index.php?title=Freeciv) includes nearly all currently existing nations of "the planet known as Earth" it is hoped that this approach can eventually lead to having a blockchain currency standing ready for each nation on the planet for its in game game-citizens to use even if here on that actual planet that nation chooses not avail itself of the opportunity by declaring it not an officially valueless game-token but, rather, an actual currency...

-MarkM-

It depends what you mean by "based on" the dollar.  If you mean backed by the dollar, the problem is: who does the backing?  You can do it as a centralized system (one entity that guarantees an exchange rate back and forth, and which makes money on some kind of fee structure); that's basically PayPal.

It doesn't work as a decentralized system.  Think of it this way:  If I have a bunch of DollarCoins, and I want to turn them back into USD but there's little demand for them right now and lots of other people are trying to unload their coins too, who's going to put up the USD to buy them all?  You can lower the payout until people no longer want to sell them and things are back in balance - that's a market-based solution, which is how BitCoin works.  But what incentive does anyone have to guarantee a specific price?

Try running a little economy with a pencil and paper for a bit and you'll see the problems pretty quickly.

The point is that if you do have a bunch of dollarcoins, the issuer has the bunch of dollars that you or someone else bought them with, thus can buy them back from you. There will of coruse be a slight overhard, but there always is in financial services.

The important thing is not to have random miners minting coins they have no itention of buying back.

You issue all the coins to the backer at the outset, and no one else ever gets any except by buying them for at least a dollar each or some kind of transaction fee for merged-mining them, which will only be available if/when a transaction actually happens.

So the main obstacle is in getting to a large enough volume of actual transactions for their transaction fees to be sufficient to motivate people to merged-mine the chain.

-MarkM-

Was this firstever idea of a "stablecoin"?

no, there is no such statement. the dollar is still a dollar, and altcoin are only coins that do not have any function and are not bound to anything.

There has to be a great step to back the Altcoin to its respective USD dollar. There are many alts using this model. But, the problem with them is liquidity and security. I think it is a good thing to have real value for alts. But, instead of using fiat currency, Gold and precious metals are far better in term of stable price. Plus having the option to do localised crypto exchange, like in the current Gigzi ico project, is a surefire way to ease the crypto/fiat conversion. So, the main thing is to let the local banks accept altcoins exchange. This is where Gigzi comes to place. So, given a strong business model (where all the involved parties can benefit), it is very possible to tie the Altcoin to USD.

I think that the altcoin is difficult to base on some legal currency. why? Since the price of the crypto will change the price quickly after the buyer and the seller have traded, but price of the legal tender will not change.

Looks like someone reading your post came up with a stablecoin. Now we know that the cryptocurrency tied to the dollar has a high popularity, especially if you are a trader and want to make a profit, but not to withdraw money from the exchange.

I'm absolutely on the same page as you because I think the USA may convert the paper dollar into the electronic one based on the blockchain. It may happen soon, after the global economic crisis and a dollar decline.

it is certain that if bitcoin dies, the technology will be utilized for a country's bank system. Because of what? bitcoin has not yet been legalized, so it's still possible to disappear, while the dollar is the official currency that will never be replaced.

haha, this post is from 2012, and OP might be the first person to have the idea to make cryptocurrency backed up by fiat money. If only OP was the one who make his/her idea into reality, he might be a billionaire right now. Or maybe the founder of those stable coin read this OP post and implement this idea, lol  ;D

After seeing op got 7 merit with that post, i said wtf?

Later i saw it was on 2012 and he had a good vision.

For an altcoin to have USD as it's base, it will face so many challenges. What do you mean when you said dollar will Die? Or was that a mistake? Hmmm..

The OP was done 7years ago but he must he a seer, a Nostradamus of a sort. I think we have the dollar altcoins now -Tether and the rest of them. Again, while bitcoin suffers the impact of the market, its blockchain tech thrives and has been adopted by several big firms.

Interesting find!

I somehow think that this guy was not expecting neither the level of centralization certain coins have, neither the number of stable coins that'll rise.
Or maybe at least the centralization and the fact they rely on other blockchain (ETH) to survive could be thought as "challenges".

Interestingly, this topic was written in February 2012. Even then, they thought about having a cryptocurrency based on the dollar. Now this idea has come true and we have the so-called stable coins - USDT, TUSD, which are pegged to the dollar. True, this is not a fully-fledged cryptocurrency, it cannot be profitable and practically plays a supporting role in cryptocurrency, however it cannot be otherwise.

The investors who just invest on any crypto currencies to make money is the reason why USD influencing the altcins more.So it will be same until we are going to stop the trading for USD and just start using as means of payment.

I think regardless of bitcoin fail it will maintain its dominance and even be better considering it’s level of development

When it comes to been tied with usd, I think that’s only be on a short term basis as wel already have a lot of stable coins

Soon, we will need no stable coins anymore

It is great to know that even 6 7 years ago people were so interested in fiat backed coins and now itis a reality with so many fiat backed to tokens most are backed by usd. I think next phase will bring fiat backed tokens representing other currencies like euro, gbp, dinar etc.

I like cash more. And I exchange Bitcoins for cash. So I feel calmer and more confident.

Yes you are right the next thing to be followed by us will be most crucial for all of the nearest altcoins to tied up with some of them good currencies and we can definitely say this will be a right move for the next generation.

Seriously? USDT? I mean what is the tether if not an altcoin that is tied to usd ?
It is basically your money all in dollar but in crypto shape. You are getting dollars no matter what but with this way you can trade your coins from and to dollars anytime you want in multiple exchanges and its all tied to dollar. Do you want it in a different shape, do you want it to go up or down somehow ?

Because, dollar is not going up or down, inflation is something else, if you want an altcoin that is pegged to dollar but with inflation in mind that is not really that much acceptable, how are you going to make people trade on the inflation prices ?

The current tether is already chasing couple percent every single day, it is impossible to calculate inflation on top of the current system tether has.

Well, they just keep on creating altcoins that is Dollar based, meaning to say that they still care about the value of dollars and not about the value of cryptocurrency that might even replaced our fiats.

There will be some problem if every coin support USD or Euro but this will be great if altcoins based on USD. Now all top coin directly directly can convert to the USD.

This is an old topic from 2012 well if you don't know bitcoin is still alive and kicking ass, this is 2019 and everything seem normal ,bitcoin won't die easily ,about the altcoins that are tied to USD are usdc and haven ,there are still many more

If you believe the white paper of the ROCKZ project, the cost of their token is supported by the Swiss franc. As an option for investment is suitable?

The need to convert to the proper coin and navigate through multiple exchanges can make cashing out a confusing process. However, the middle of the week saw the market plummet nearly five percent in six hours before regaining that loss nearly as quick about a day later.

Altcoin if it is tied to the dollar, this will have a positive effect on the cryptocurrency as a whole, because you and I will be able to have cash in the first currency in the world, the US dollar. In this way we will become more confident.

I do not understand the meaning of such cryptocurrency. Why base something on the dollar ? A large amount of dollars is produced and this is bypassing state standards. If you tie an altcoin to the dollar, such a coin will not be in demand.