flatten out the bumps

[the founder]

Everyone has seen Bitcoins jump and drop in value by huge levels...   For a few years now I have seen bitcoins go from 10,000 Bitcoins for a pizza to $260 dollars a bitcoin to where we are now,  at about $75 a bitcoin.

We live in a Fiat world,  where the vast majority of businesses accept dollars,  euros or yen.   Sure there are some firms that accept bitcoins,  Wordpress, Reddit, and a handful of other bigger firms that do.   However lets face it,  it's not mainstream until you can go to Walmart and pay for your groceries with bitcoins directly.   The reason this happens is the exact same reason it's not taking mainstream by storm,  it's like riding a freaking rollarcoaster.

I believe in Bitcoin,  I believe it has a strong future,  but in reality I believe that my app should never have to exist.   People shouldn't have to look at the spot price before making a transaction.

This is what I propose.

using the existing bitcoin infrastructure with the same rules meaning this has to be made at bitcoin,  not some fork with one exception.

As antares so eloquently stated:

because shortly before the block rewards, people will speculate on the price increasing due to the lowered supply, thus creating another (not self-sustaining) bubble. then idiots that didn't learn from getting zhoutung'd for the last 20 times will ruin it again.

https://bitcointalk.org/index.php?topic=61334.msg715844#msg715844

The fact that the price started to increase a few months afterwards lead to a spectacular bubble (what we just saw).  So basically I believe the following should take place... everything identical except regarding the exact reward.

I believe exchanges should publish real time quotes (which they do now via their respective API)

The miners pool those quotes from several exchanges,  and reach an agreement on the quote (all done automatically)  and it adjusts the reward from X or X ... depending n the current price.   If the price is tanking,  then the number of coins issued goes from 25 to 20 for example,  and if the price is booming then it issues more,  such as during the run up instead of issuing 25 it would issue 45.

This means that the miners get super rewarded when the price goes up,  and don't make as much when the price goes down.

The reason behind this is to control the overall release of the coins to help stabilize the price.

If no consensus is made between the miners for the spot price,  then it defaults to the current system.

Call me nuts,  but I think that would help stablize the price and keep it decentralized because if no agreement is made it just defaults to the current system...

[Ekaros]

Stabilize price to what?

You would need to choose one currency and use it. Then we would end up just with handy less useful version of that currency.

Or you could do a basket, but there is lot of issues with inflation and valuation there too...

[Sukrim]

Why do you think miners are the ones cashing out? Yes, you need to pay for electricity, but for a lot of miners that's probably just equivalent to buying a certain amount of coins for USD every month... at rates that people on exchanges can still only dream of.

[the founder]

Why do you think miners are the ones cashing out? Yes, you need to pay for electricity, but for a lot of miners that's probably just equivalent to buying a certain amount of coins for USD every month... at rates that people on exchanges can still only dream of.

It's not the miners specifically,   it's the overall "printing of money" during crashes....  

Or you could do a basket, but there is lot of issues with inflation and valuation there too...

I was implying a basket... 

[tysat]

Call me nuts

Done, you're crazy.

This would be a huge fundamental change, implementing something like this would need a lead time of at least a year.  Bitcoin rewards have been set in stone and will continue to be, as I could never see something like this getting passed.  The real way to flatten out the spikes is to get more people into Bitcoin.

[malevolent]

I don't like your regulatory-intervenionist tendencies.

How will you decide which currency is the most important? If it's due to liquidity USD you are limiting yourself to the US, you might not know it, but Bitcoin is also known and used in Europe and on other continents too (not sure about Antarctica though). Why not change the numbers of coins issued on something more reliable than fiat (precious metals)? How will you decide which exchanges should be taken into consideration? Why them? What if a new exchange with a lot of trading going on pops out? Will you adjust the algorithm to that? Who is to do it? How will you convince others to use the new protocol?

If you want such radical, unsafe and nonsensical changes I suggest you start your own coin.

The real way to flatten out the spikes is to get more people into Bitcoin.

And get them use other exchanges, so that (ideally) no single exchange is a single point of failure, has monopoly on 80% of BTC exchange, and where its deficiencies have an influence on price (laaags)

[BitDreams]

Give it 12 months and watch what the ability to seriously short and leverage bitcoins does in my opinion. In theory, it should work to stabilize the market and I believe we will soon know.

[superduh]

Give it 12 months and watch what the ability to seriously short and leverage bitcoins does in my opinion. In theory, it should work to stabilize the market and I believe we will soon know.

should, but with such a "small" market where many big players can affect it easily. i have no idea what to even expect. $200 one day, 800 next, 150 the following day and back to 400.

[cryptoanarchist]

the huge pump and dumps are easily created by people who can print as much fiat as they want to create such pump and dumps.

It's not a coincidence that some people seem to know when these bubbles are about to pop.

[FandangledGizmo]

Lots of people seem concerned with Bitcoins adoption by more merchants, I think Bitcoin functions great just as it is - online gold.

Another digital currency that was inflationary enough to prevent hoarding & had faster confirmation times would work better than BTC
for day to day online purchases?

If that statement is true. Rather than trying to force BTC into a role it is not suited for & a battle it will ultimately lose.
Wouldn't it be better to rather focus on its' strength as an online store of wealth, by virtue of its' very limited inflation & make sure it is easily/seamlessly convertible into whatever digital currencies are better suited to that role?  

BTC is a great place to store 2.5-5% of your savings in my opinion. (Maybe more depending on its' future stability.)

So just like we don't go into shops and pay in physical gold, we keep gold because it will hold it's value relative to whatever the most popular/useful current means of exchange is whenever we need to convert it.

[glendall]

^ +1

I think so as well.

I think Bitcoin should be the gold, and another currency, perhaps Litecoin, perhaps not, will eventually take the role of the go-to credit for online purchases. This alternate coin will have a much smaller valuation to BTC but the ratio at which it is traded for BTC should remain relatively similar.  Once BTC market cap is 10 or 100 billion then fluctuations as less troubling.

I'd imagine, though no one has this plan yet,  that it Litecoin or coming Coin 'X' for small purchases would work well if it had a incredible value for 1 coin, and a great deal units smaller than a Satoshi .

For example, say Xcoin had a agreed upon initial value of 10,000,000 bitcoins.  Yet miners could mine and generate units of 0.00000000000001 Xcoin.  You could leave the ratio of exchange between Xcoin and Bitcoin fluctuating, but because just 1 coin had such huge worth, users purchasing stuff under a $1000 dollars would be much less affected by the daily currency fluctuations of BTC.

Hmm.... well already finding some errors in my line of reasoning. But ideas or similar other ideas are needed I think, to take cryptocurrencies to the next stage. The swings in BTC is a problem for its use as a currency to buy/sell things online.

This problem is interesting because it is similar to what any physical country would have I think, if they were newly 'created' and where accessible to anyone online. I'm in an economist but would expect many future PhD theses will study BTC's rise in the coming decades.

[Killdozer]

Terrible idea. The issuing of new bitcoins it the one thing that should NEVER change in any way.
It is one of the biggest reasons Bitcoin got to where it is today.
The biggest rules should not and shall not be changed.

[glendall]

No you misunderstood me I think, or I was not clear.

Not the issuing of BTC.

The issuing of a second new hypothetical coin that would be used for daily online purchasing and selling.

The few giants of BTC could create it. Create only one coin for the initial price of 10,000,000 BTCs say.

And then this new coin (perhaps only 1 initial coin), could trade with online using 0.00000000000000000001's denominations of that coin.

edit: Ya doing some math and this idea doesn't work much better than the current system if BTC gains or loses 2x its value in a day.  Just an idea...

[pretendo]

it will flatten out, crashes just freak everyone out

I look forward to bitcoins becoming securitized