I'm a skeptic but please don't ban me for my opinion.
The bitcoin strategy is brilliant for the founders
. Creating a decentralized currency is still an interesting endeavor though.
- Why not back the original value of the currency on something that actually helps people?
- Why back it on a process that is completely pointless and does nothing but waste electricity & computing power?
- Why back it on something that will make the founders and early adopters rich when they offload on a bunch of bag holders?
- Why not back it on something that would engage regular people to take part in it?
I hesitate to use the word "scam" because, either way, it exists now. How long will it last? Who knows. It has novelty, but it has absolutely no appeal to normal people. No one in their right mind would rely on it until it's as safe as an FDIC-backed bank account. Furthermore, I have to imagine the only serious markets propping up actual value are the drug/sex markets. If those should ever disappear or suffer a major 'blow,' then what the heck will prop up the value? Nothing. Who will want to buy into it then?
An alternative currency's mining effort (or "seeded value") should be based on some type of real-world value. The first idea that comes to mind is creating a claim code system linked to major mainstream charities and/or with Kiva.org. It would require an authority to dish out the currency, but only in the beginning.
The process might be something like:
- Come up with a better "New Currency" standard, artificial scarcity/limit, more secure, still decentralized, etc.
- Create "New Currency Authority" that donates to mainstream charities with a proof of receipt system that can be verified at the actual charitable org's site, kind of like UPS and their tracking codes (yes, I realize most charities DO NOT implement this; but we're talking ideas that could be created/pushed along in the future)
- Random Person wants some New Currency
- Random Person goes to New Currency Authority and buys some by effectively donating to charity and uses a "salt" tracking phrase if they wish
- New Currency Authority processes Random Person's money.
- The Authority donates it to "The Red Cross" (or wherever) and receives a next-gen verification code.
- The Authority gives Person the bought units in currency (minus a percent of withheld units as a fee, undoubtedly) + the charity's verification code.
The Person now has:
- at least contributed to something of value
- the ability to ensure that value by entering the verification code on the charity's web site. The verification stamp would pull up the amount given, date/time, and a "salt" word/phrase that was designated by the user (which would protect against the Authority handing out the same verification code for the same amounts in the same time window)
- greater stability because the Authority only makes New Currency for themselves when there's increasing buyers and liquidity
- their decentralized New Currency
+a system for randomly dispersing certain amounts among everyone who chooses to freely enter that lottery
+wallets that use more protective security like GPG and have a friendly interface; if a currency stays relegated to the fringe, it'll never have real stability
There's very little waste with the above scenario.
And, hey, at least you know that each coin in the system was the result of some original real-world good -- even if the whole thing someday crashes and burns.