I'm not sure what would happen in a total doomsday scenario, but I doubt the above would happen. I don't think a new "better" currency would cause everyone to suddenly jump all at once away from Stablecoin. Instead, it would be a gradual migration where the price of Stablecoin would be consistently under the target. The transfer fee would kick in to destroy the Stablecoins at a regular rate which is exactly what we would want.

A doomsday scenario which is very likely to occur would be like the Mt Gox hack. What happens if a bunch of Stablecoin was stolen and the thief doesn't care about the exchange rate and just dumps the coins on the market. Since something like that has already happened with bitcoin, we can assume this would happen with just about any digital coin.

This scenario will cause some issues, but I think Stablecoin would survive. Lets look at each step of the thief's sale to see how Stablecoin would react.

1. The thief initially tries to dump all of his stolen coins on the market. All of the bids are cleared from the market and the price of Stablecoin drops. If the thief is able to dump all of his coins, he gets away with the money, and a bunch of others buy really cheap Stable coins. If not, He has to wait for more bids.

2. The thief still has more coins to dump and some of those with cheap coins may want to sell at a slightly higher price than they bought them at. If the transaction fees haven't change yet, this is really step one with the addition of more people selling below the fair value. When the transaction fees change, the program will now calculate a very low value for Stablecoin and end up with really high transaction fees. If the thief tries to sell, he will lose much of his stolen coins to transaction fees. Also, anyone who purchased cheap Stablecoins and wants to sell out, or anyone panicking will also pay high transaction fees. Some people will choose to pay the transaction fees, others will not.

There's the important distinction, choice. Some people will choose to return some coins to the either because the coins didn't cost them anything to begin with or they have lost faith in Stablecoins. Either way, coins are destroyed. Hoarders can hoard their coins until the price comes back up. Of course, with so many coins being destroyed, the price will come back up.

Also, the transaction fees are a disincentive for the thief to dump his coins all at once. If he does, he won't make as much money as he would if he sold them slowly. There will likely be some level where he doesn't care about the transaction fee and just wants to dump the coins. But, that would just allow some people to buy cheap coins for a while and allow some of the stolen coins to disappear.

3. Finally, some coins are destroyed, others end up with some cheap coins. The big downside, Stablecoin isn't as stable as the name suggests. It will be influenced by the market, but the goal is to always go back to a specific price. I believe it will do that even in this doomsday scenario.

How about a very limited type of exchange within the main chain:

Every block contains a price inserted by the miner.  A block solution must contain a signature on a standard contract using the coinbase output keypair.  The contract is an option to:

    buy at the quoted price plus a standard spread (e.g., 1%)
    or
    sell at the quoted price minus a standard spread

an amount of the underlying commodity equal to the block reward.  The option expires in 10 minutes(?) and can only be exercised by solving a block with this block as its parent.  To exercise such an option, a miner must set a special flag in the next block.  The two miners have to find each other and settle up (no need to specify how) before either can claim his block reward.  They must both sign something using their coinbase keypair and submit the signatures to the network before the network will recognize their block rewards.

Perhaps the spreads don't have to be standard, the contract can specify any prices straddling the quote.  Miners would be motivated to offer good terms in order to encourage the network to accept their blocks and thus validate their rewards.

It sounds as if whatever it is that your coins are "shares" of has no assets.

If a corporation, for example maybe General Mining Corporation, actually owned assets, such as, for example, a bunch of mines, a bunch of mining rigs, or even a bunch of shares in various publicly traded sold, silver, platinum, paladium, iron, copper, etc etc etc mining corporations, and used a blockchain whose genesis block issued all coins ever to be issued of that blockchain, issuing them to GMC's treasury... then GM could use its actual assets to buy back any GMC coins it had issued at the same price it had issued them at or close to that price.

-MarkM-

The multicoin client will use whatever network/blockchain the config file specifies.

The default config file is $DATADIR/bitcoin.conf.
The default datdir is ~/.bitcoin/bitcoin.conf, the same as the satoshi client.

To use it with namecoins, rename bitcoin.conf.namecoin to bitcoin.conf and put it in your datadir.
If you made a /home/mot/.bitcoin/namecoin directory, and started multicoind like this:


It will use the /home/mot/.bitcoin/namecoin/bitcoin.conf file.

Or specify the config filename with -conf=


Call rpc commands like so:




All of this is the default behavior of the satoshi client.

All right, this seems worth trying out.  This could be a very important project I think.

I just built the multicoin and multicoin-qt programs.   No real issues to get it all to build.   The multicoind does not run without
some config files in place,  muticoin-qt does run, and seems to default to the bitcoin blockchain, as it seems to be downloading that now and gave me the 1AFHAdPE1GWeL6NDp1nKhCa3pFGywJVTg1 address....  more  once that is done downloading.

Edit:   been stalled at block 112,000 for awhile now...

According to this.. we're all just being manipulated by islamic radicals.. 

Pat Dollard’s “Night Watch” Ep. 1 Jihadis, Bitcoin, and Anonymous/Lulzsec

Anarchy, Islam & Bitcoin: The New World Order Of Terror

http://ameristroika.wordpress.com/2011/08/09/pat-dollards-night-watch-ep-1-jihadis-bitcoin-and-anonymouslulzsec/

Stablecoin is an appealing goal, but ultimately it's not necessary.

Over time, Bitcoin usage will grow rapidly and then eventually stabilize. Over time, new Bitcoins are generated but in smaller and smaller quantities, so the supply will eventually stabilize.

Therefore, if we give Bitcoin a bit of time to find its long-term value, it's going to be fairly stable anyway.

I can only think that only a real market can control a price of any commodity or currency and the a central bank that dumps and buys as needed to control the price would be the only way I know to make a stable currency possible.  as I said before you can peg the value of a currency to anything you want.  It's "The Trust" holders that should decide what they want to hold as there base of value of the asset holdings and just use the crypto coins to pass the value for P2P transactions.  I have almost completed the infrastructure to make all that possible in the BeerTokens model http://bitcointalk.org/index.php?topic=9493.msg138247#msg138247.  The first beerA coins have already been minted with the new merge mining feature using MulitCoin-exp https://bitcointalk.org/index.php?topic=24209.msg300830#msg300830.  With MultiCoin  we also can setup secure exchanges with escrow deposits to prevent third parties from stealing from a central exchange.  I will continue to develop what I feel is missing in the infrastructure to make what  sounds some of you want in the near future.  The basic concept is that the holders of "The Trust" decide how they want things to be and what needs to be changed, Not the developers and miners.  Each holder on record has a voice.  You just have to make it heard by being a part of it.

That's okay, keep them for a rainy day.

19QMwDKtRZVsiTposEk2RDPXVLfbABbadM

How about that?  I wasn't expecting to win anything.

Thanks for your efforts to improve the level of discussion in the forums.

Faucet is fine.

Thank you. I'll start a bounty to develop freicoin.

You can send the coins to:

1N9u8az3nkztXP3xUcYFhoFsNAvARxBowq

Thank you, that's generous of you.  Esp since I had nothing but criticism

1N6kvsgWHSHfnScG31rBozNznrZnUBG1td

I admire your integrity; however, it's really not necessary to pay me for posting on your Bitcoin topic.  I do appreciate it.  You can send the bitcoins to the faucet or I wouldn't mind if you just kept them.

You might consider donating to show your appreciation.

Donation address: 1A76BH8MAkPGSuxZhbHAqVBp9BtX24DBe5

The source of info on exchange rates is the single point of failure. Ever heard of the mtgox flash crash. Yup, that's failure.

I do not get Goldcoin. I mean, I understand the wildly awesome idea of selling free coins for the price of Gold. However, I do not understand why anyone would buy them instead of Gold itself. There is tremendous risk that Goldcoin would not actually match the price of Gold. There is exactly 0% risk, however, that Gold will not match the price of Gold. Saving transaction fees is not good enough to make up for the risk. I store gold. I do not pay transaction fees anyway.

So, lets say the first block of GoldCoins come out. What if nobody wants to buy them on an exchange? Simply reducing new supply will not help. It would be Dead on Arrival. Destroying coins will not work either. Why would I buy coins that can be destroyed? Why would I use transactions that have fees significant enough to make any difference on overall inflation/deflation rates? They would have to be huge. No thanks.

Even if the first few mined coins could be sold, the problem is new on every new block. If there are not enough buyers, GoldCoin would drop and may never come back. Price fixing on the exchanges cannot create demand, either.

I suppose you could destroy coins uniformly to get the price up. But, remember, you are destroying someones real wealth when you do that. If you need to delete half my GoldCoins to get the price up, how exactly does that help me? I paid for 10oz of gold and if I now have 5oz that means I lost money.

I am not saying Goldcoin is impossible. I just think that the equilibrium that keeps the price right would likely be a very small population of true believers. (You might be generating 1 goldcoin per day to avoid oversupply and God forbid if demand drops too fast.) Everyone else would find real gold much less risky and coin shops more convenient than Paxum/MtGox or whatever it takes to get GoldCoin. Or they buy bitcoin if they want a new currency. At least that has potential upside.

What Bitcoin stocks are good to bye?