Chocolate Capitalism: How the next generation of cryptocurrencies can yield sound money
By: Scott Herrmann
Toronto, ON (CLN) – Bitcoin is a good thing, but it is not the best thing.
We love Bitcoin because it is sensible, decentralized, and mathematical. But we also hate it because it can be insanely, insanely volatile.
Everyone knows that the for the next big *coin to be taken seriously, it has to have stability. It has to be exchangeable, in a consistent manner, for things with real-world “cash” value.
Some people are already trying to invent such a coin. If you have Namecoin, you can buy a dot-bit domain name. But this raises the question: who the heck wants a dot-bit domain name? This author refuses to believe that anyone can desire a dot-bit domain name (or any other such arbitrary collection of computer bits) as much as she might desire a meatspace commodity such as a delicious chocolate bar.
And so, this author raises a modest proposal: why doesn’t a cryptocurrency come along which offers coins redeemable for tangible goods? Rather than being worth… well, nothing more than the blockchain its bits are written on, a “hard” cryptocurrency might be pegged in value to a chocolate bar, a chicken sandwich, or a soft drink.
Let’s examine where such a coin might come from, and how it might prove itself superior to Bitcoin.
The origin of this coin would have to be from the source which originates the product. Instantially, a “Chococoin” would be issued not by private speculators, but by Hershey, Mars, or some other big chocolate company. The issuing company would have to set up an exchange for Chococoin: a website where customers could pay the current cash-register-value of a regular bar of chocolate and receive instead a unit of Chococoin.
Each Chococoin would be something like a crypto gift card. It would contain a promise (issued by the chocolate company) that the bearer is entitled to receive, by surrendering this coin, a tasty chocolate bar, at any time now or in the future. The Chococoin would be more than a gift card, however: it would never expire, and it could be traded, free of charge or fee, to any other person.
By this method, waste is eliminated. Bitcoin mining is expensive: it wastes electricity, and, more significantly, uses up processor time on computers, which might be better spent on the valuable tasks of folding protein or finding aliens. The way to “mine” Chococoins, contrarily, is to add real value to the system, by purchasing Chococoin in dollars, pesos, or whatever your local currency is.
Which brings us to the reason why a major chocolate company would want to issue Chococoin: because, in addition to the obvious free publicity, Chococoin would bring in a large number of micro-loans to the issuing company. The time between a purchase of a Chococoin and its redemption represents an “advance” on the purchase of the chocolate. The chocolate company can spend the money in the mean time on new factories and facilities, or they can invest it in a certificate of deposit or similar interest-bearing instrument which not only beats inflation but brings in a profit.
And why would the customer buy Chococoin? Because it is a strong currency. It has innate stability: if the value drops below that of a chocolate bar by more than a sliver of a percent, then people who want to buy a chocolate bar in a store will go out and buy Chococoin on the open market to save on their purchase. (The inverse scenario, that of Chococoin’s value exceeding its retail purchase price, is impossible for obvious reasons.)
A Chococoin is like a “forever stamp” on buying a chocolate bar. A chocolate bar might have cost 5¢ in your childhood and 50¢ today, but it’s still worth about one-twentieth of a hot meal, or one-ten-thousandth of an acre of land in the country.
Chococoin is proximally inflation-proof and recession-proof. The stability of Chococoin, coupled with its’ other advantages (anonymity, ease of use) would lead users to see Chococoin not just as a gateway to chocolatey happiness, but as a sound reserve of value over time.
http://caplibnews.com/chocolate-capitalism-how-the-next-generation-of-cryptocurrencies-can-yield-sound-money/
