Bitcoin Forum

Have been toying with the idea of forking yet another chain this one based on the value of Copper, called a CuBit.

You could convert your pre-1982 US Pennies in for it -- and the copper would be held in escrow for exchange.

Yes, it introduces a central-authority, but could be done in a way that is more similar to the way commercial banks in Hong Kong can mint/print equivalent currency.

S/H of "minting out the metal" of course might make it non-desirable to demand payment.

I dunno, haven't really thought it through...

Your reaction to backing a chain tied to a commodity (like my former PetroBit prediction) ?

My reaction is:  How would you make any money to stay in business?

With a USD-based chain (RealPay), the USD collected can be further invested to generate income for both the company and the people using the service.  With a copper-based chain, you couldn't invest the copper into other investments, so you'd have zero income from the company without introducing some heavy fees for transferring in/out.

Not to mention, it would take a ton of time to verify that each coin is actually pre-1982.  Do you really want to sort through tens of thousands of pennies and try to read the dates on them?  I heard someone has created a machine to automatically sort them, but I think it was a one-off, and I'm not sure how it works.

And finally, the shipping costs would be quite large.  Probably the best way to ship would be via those priority mail flat rate boxes, but even then, the customer is paying at least $5 to ship the coins to you.  So $5 + fees, and you probably won't get many people to actually use the service.

Just my opinions on it.  I've thought a lot about tying a Bitcoin-like money to various things, and my conclusion is that it can only be successfully tied to USD.  Anything else would just require too much in the ways of fees and other costs to make it viable to more than a small group of people.

Heh, the pre-1982 penny problem is solved with a cheap coin comparator !

I read an article about a guy that is hoarding Nickels because of the metal content -- as in ordering up tons of the things from the mint and storing in secured warehouses.

The idea wasn't so much that you'd use only coins as the "asset-backing" to the pool just that the chain would be backed by a specific metal/commodity and that the implied underlying exchange policy would be that you could demand the exchange/cash-out but that the transaction fee's would likely make it not worth the minting expense.  Thus, its a promissory-note kind of instrument.  And really, if you wanted to convert your CuBITs I'm sure someone would be happy to 'mint' out a heavy box of pennies + the shipping, insurance -- and the money maker "handling" charges for you ;)

For that matter, why not use the 1 Yen coin?  It's still 1g of 100% aluminum afaik??

AluBIT ?

Cubit is the name of the currency in Battlestar Galactica  ;)