Title: The Trillion Dollar Question Post by: dacoinminster on April 11, 2013, 04:55:36 PM Somebody on Quora asked:
Quote How could a new digital currency have more stable prices than Bitcoin? Both from a technical and a market/economics perspective. It seems like if there was a smart way to prevent wide swings in price of the currency...it'd be much more useful as a store of value. I am not sure how this could be done though. How could that be achieved? I feel like the frequency that they are issued could vary or something like that but I don't know how that could be managed My answer: Quote Congratulations. You have just asked the TRILLION-dollar question. If someone does manage to create a distributed currency which also achieves good price stability, the biggest barrier to distributed currency adoption will have fallen, and the world will be changed forever. I have thought about this topic endlessly, and I wrote a paper about it. I have some very important news for you, so please pay attention: Bitcoin, or something like it, CAN provide price stability. There are three ways this could happen:
The potential huge market for stable coins built on top of bitcoin is why I own bitcoins and have no intention to sell them in the near future. Colored coins WILL happen. Self-stabilizing coins MIGHT happen. Either way, bitcoin price increases are just getting started. Title: Re: The Trillion Dollar Question Post by: Cryptoman on April 11, 2013, 05:07:44 PM Someone could issue a Chaumian-blinded currency tied to the price of gold (or some basket of commodities) using Open Transactions. This person could demonstrate sufficient backing for the currency by proving that they control a bitcoin address (using digital signatures) which has an amount of bitcoins in it at least equal in value to the amount of currency outstanding. Hopefully Monetas or someone else is working on this as we speak.
Title: Re: The Trillion Dollar Question Post by: dacoinminster on April 11, 2013, 06:42:11 PM Someone could issue a Chaumian-blinded currency tied to the price of gold (or some basket of commodities) using Open Transactions. This person could demonstrate sufficient backing for the currency by proving that they control a bitcoin address (using digital signatures) which has an amount of bitcoins in it at least equal in value to the amount of currency outstanding. Hopefully Monetas or someone else is working on this as we speak. Sigh. I wish someone would "explain open transactions to me like I'm 5". I've read plenty about it for a long time, but I've never seen it do anything useful, or seen any evidence that it could. Title: Re: The Trillion Dollar Question Post by: yokosan on April 11, 2013, 07:44:56 PM Can't wait for colored Bitcoins to gain some traction.
Title: Re: The Trillion Dollar Question Post by: Mike Christ on April 11, 2013, 07:48:19 PM No colored bitcoin, por favor. We've already seen what currencies backed by other currencies have done. Friction is all we need.
Title: THE ANSWER Post by: antibanker on April 11, 2013, 07:56:50 PM the japanese goxies are just as corrupt insider traders as Wall Str mo...f.... Title: Re: The Trillion Dollar Question Post by: fellowtraveler on April 13, 2013, 02:34:06 AM Sigh. I wish someone would "explain open transactions to me like I'm 5". I've read plenty about it for a long time, but I've never seen it do anything useful, or seen any evidence that it could. I would be happy to sit you down and train you on it. What city do you live in? Or we can meet on IRC. Title: Re: The Trillion Dollar Question Post by: Impaler on April 13, 2013, 04:41:17 AM Friction: Too far off, and chicken and egg problem too, you will never get enough adoption to get the friction needed to get the adoption. Also very little evidence that a REAL economy with no stabilizing mechanism is that stable and plenty to suggest it isn't.
Colored Coins: Requires massive costly real world reserves and centralized trusted agent, also it only pegs the value of a tiny number of coins and that presents an obvious possibility of confusing those coins with non peged coins. Self-Stabilizing Coins: I'm not sure what your describing here, but I've though about stabilizing through an internal market mechanism that would control inflation rates, I don't think this can be done 'on top of' the BTC protocol but in it so its peer-2-peer and decentralized. One idea I've been toying with lately is to peg coins to the one thing that CAN be know, controlled and revoked inside the system. The ability to use the system as a user is a use-value that is fairly stable, if their were a FLAT fee in coins to have a wallet then it would put an upper boundary on the price of a coin. If the market tried to drive that price above what people were willing to pay to use the system then they would jump ship and this would put downward pressure on the price. |