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April 27, 2013, 05:32:51 AM |
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Perhaps a group of trustworthy individuals (say the Bitcoin Foundation) could start a bitcoin bank. This bank would receive bitcoin deposits into a single jointly owned BTC address. The only way BTC can be released from this address is if several people from the group signed them out with their own individual keys. This way fractional reserve is prevented.
For every BTC deposited and locked up and for all to see (since the address is public), the group issues a fixed amount of paper and coin currency for any to acquire with digital BTC (minus a set percentage to cover for the administrative and production cost and interest). These bills can then be used as ordinary money for sheer convenience.
The physical currency could have a fixed expiration date printed on it. This money must be returned and converted back into digital BTC before the expiration date. This could be necessay in order to periodically account for lost bills. Physical BTC not claimed back this way would go into paying interest for those who deposited.
The bills would have to be comissioned to be made from a very reputable printer, or the printing machinery itself bought and customized, in order to prevent counterfeiting. Paper money printing has progressed a lot and there can be many ways to prevent counterfeiting now.
I am sure people would feel a lot more comfortable holding and exchanging physical BTC cash and can be the road for universal adoption.
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