[POLL] eMunie initially backed by fiat

[Fuserleer]

Hi Altcoiners

Some of you when reading the initial announcement of eMunie may have noticed a mention that we were considering the option of backing a quantity of pre generated EMU's, at least initially, with an amount of fiat currency. This would most likely be USD, in the region of $50k-$100k, but we are as yet undecided.

There are obvious pro's to doing this:

• Allows an exchange to real currency you can use to be put in place soon after launch
• Allow other services to come online faster and have a real world benefit
• Assign the currency some real world value quickly
• Provide more initial confidence in the currency
• Ward off, at least initially, any violent fluctuations in price

There are con's too:

• Initial control of currency value by a central authority (us)
• Provided stability will slow currency value upward trend
• Developing a safe umbilical cord to fiat will be challenging
• Potential of a fractional reserve

Thus we are unable to come to an decision.

As we want eMunie to develop into a thriving community post launch, where everyone has a say, we thought what better way to get a majority concensus, than to ask those that will be using it (we hope), you

Feel free to express you opinion on the idea, good or bad, as we would like to know everyone's thoughts.

I've self moderated this post so I can keep out the noise.  If you want to discuss eMunie, its approach, or anything that's not related to this thread, please do that here -> https://bitcointalk.org/index.php?topic=220530

Thanks all.

[Fuserleer]

For what it's worth I'm stuck in the middle, there are obvious benefits, and obvious pitfalls (aside from loss of capital if it fails, but that's not the issue here).

I'll be fairly silent in this thread, I would like to get a discussion between members here, as we've had enough already

[sor.rge]

What exactly does that mean? Will you buy eMunie for USD at a set rate until your fund runs dry? I think it will have only a short-term effect, but it will be beneficial.

[Fuserleer]

Kind of yes, the hope being that the initial backing will "kickstart" it a little. 

After a short period, and before the USD fund ran dry, there would be enough trust and demand for EMU's, with a decent infrastructure in place, that the initial backing is not needed anymore and its reliant only on itself.

The math checks out, the models check out, but that's a total different ballgame to real world and what the real world wants.

Looking at the poll so fat, its pretty much a dead 50/50 split here too, which is exactly where we are too.

[sor.rge]

After a short period, and before the USD fund ran dry, there would be enough trust and demand for EMU's, with a decent infrastructure in place, that the initial backing is not needed anymore and its reliant only on itself.

I think you should be prepared to see it drop in price as soon as your backing is withdrawn. It will be so even for psychological reasons. The math confirms: from the point of view of an eMunie holder, while the backing is there, it can't drop below it, so it can only rise, and is therefore profitable to hold. Once the backing is gone, the game changes dramatically: the new bottom is 0. The profitability of holding is much less obvious. The new equilibrium will inevitably be lower.

[Fuserleer]

Exactly, so in long term, after the initial backing it may do more harm than good.  But on the flip side, it could be beneficial for a long term success as mass trust and adoption can to a degree compensate for lack of backing (fiat )

Decisions, decisions

[Fuserleer]

Of course, don't forget that we wouldn't just be buying them, we would be selling too, so that would prolong the backing period of time.

Hatchers would sell, individuals would buy, use and someone else sells back, rinse repeat.  So the "dry up" of the backing would be later in the future.

Some hatchers and individuals would also hold on to them speculating for a higher future value.  But then you get into a fractional reserve, which again, isn't the best situation to be in long term.

[anderl]

what are the legal implications of doing so?  Would it be USD?  Will you apply as a electronic trading fund?  Will you have to register with the SEC?

[Fuserleer]

to do it legally yes, there's a few hoops to jump through, hence it being a "challenge" aside from the technical requirements.