Alt currency backed by bitcoin

[gglon]

One of the flaw/characteristic of bitcoin is quite long confirmation time, which easily can reach 30min due to variance. This may be inconvenient eg  in some shopping center. Had the first confirmation been in avg 2.5 min, it would have been possible to leave the shopping center with at least 1 confirmation without much hassle. That is why the alt currency, which is the same as bitcoin, but with faster confirmation time would be handy. This is exactly what the TerraCoin is. But the problem with terracoin is that it will be always more volatile than bigger bitcoin. So here is the question:

Would it be possible to create alt currency like TerraCoin, but instead of mining, each coin would created by converting from bitcoin and vice versa (the other way around)? So essentially each new coin would be backed by bitcoin, but all transactions (except from exchanges) would be in another chain. Mining would be joined with bitcoin.

[1714940556]

1714940556

[Dali99]

wouldn't this be like exchanging btc codes through mt.gox? you send the bitcoins to Gox, make them a code, when the code is reedemed. It causes the accounts on Mt.Gox to change and nothing goes trough the blockchain.

[gglon]

No, it is very different as my idea is decentralized. With redeemable codes you need to completely trust central authority (like mt gox). Though I like Gavin idea for off the chain transactions with semi trusted parties- http://gavintech.blogspot.com/2012/07/off-chain-transactions.html?view=sidebar better.

[Dali99]

No, it is very different as my idea is decentralized. With redeemable codes you need to completely trust central authority (like mt gox). Though I like Gavin idea for off the chain transactions with semi trusted parties- http://gavintech.blogspot.com/2012/07/off-chain-transactions.html?view=sidebar better.

so you want to make a currency like bitcoin, with bitcoins? Where would the bitcoins go? how can you make an economy without the need for exchanges?

[gglon]

Where would the bitcoins go?

Bitcoins would be blocked somehow. I don't know exactly how, that is why I am asking if this is possible.

how can you make an economy without the need for exchanges?

The whole economy would be bitcoin economy. The new coin would be just technically different kind of bitcoin, that can be bought and sold to bitcoin only.

[Dali99]

Where would the bitcoins go?

Bitcoins would be blocked somehow. I don't know exactly how, that is why I am asking if this is possible.

how can you make an economy without the need for exchanges?

The whole economy would be bitcoin economy. The new coin would be just technically different kind of bitcoin, that can be bought and sold to bitcoin only.

I'm sorry to disapoint you then, I don't think it's possible with a decentralized system :/

[gglon]

I'm sorry to disapoint you then, I don't think it's possible with a decentralized system :/

Yeah, I think that too. But it would be nice if possible.

Basically it would have to work in the following way:
1. getting new currency:
- You send the bitcoin to the address you don't have private key to.
- You receive private key to the address in new currency, that would contain equivalent nr of new bitcoins.
2. redeeming bitcoin:
- You send new currency to the address you don't have private key to.
- You receive private key to the address with appropriate amount of bitcoins.

[Dali99]

I'm sorry to disapoint you then, I don't think it's possible with a decentralized system :/

Yeah, I think that too. But it would be nice if possible.

Basically it would have to work in the following way:
1. getting new currency:
- You send the bitcoin to the address you don't have private key to.
- You receive private key to the address in new currency, that would contain equivalent nr of new bitcoins.
2. redeeming bitcoin:
- You send new currency to the address you don't have private key to.
- You receive private key to the address with appropriate amount of bitcoins.

this would require a third-party. and thus it already kind of exists, I don't think we should make it harder than we need to.

[Mike Christ]

Ripple?

[Dali99]

Ripple?

nah, ripple is more of a scammy borrowing network

[gglon]

Ripple?

No, Ripple is trust centered network. Few drawbacks:
1. You can trust 3rd party for redeemable codes which are clean and simple as well as you can trust your friend, .
2. Although I don't understand ripple fully (who does:) it looks to me as one transaction can generate many more small transactions which may be a hassle.
3. I don't like the idea of "premined" currency. As we know premined currencies are not doing well. And xrp must cost something for the idea to work.

[Benson Samuel]

Try Ripple.

Sounds like what you are looking for.

XRP does have very little store value, but its main use is to prevent users from spamming the network.

[CharlesPonzi]

You could gather thousands of bitcoin and have public addresses so people can always see the coins havent moved then issue convertible notes that people can always redeem.

One of the problems with gox codes is that Gox doesnt share public addresses so you can see that they have enough backing, you need to trust they arent doing fractional reserve.