BitChip The Bitcoin Killer - The Merchant's Solution To The Bitcoin Problem
http://seekingalpha.com/article/1987521-bitchip-the-bitcoin-killer-the-merchants-solution-to-the-bitcoin-problem?source=feedBitChip; The Dog that Wags the Tail and Bites Bitcoin Where it Counts.
I've written extensively about how poorly designed the Bitcoin is. There is no doubt that the Bitcoin is a major advancement is computer security, cryptology and solves a major virtual currency problem called the Byzantine General problem. There are a lot of good things about the Bitcoin.
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Building a better Bitcoin; The BitChip:
A successful virtual currency will build upon the success of the Bitcoin and address its weaknesses. The main Bitcoin weakness is that it is designed to solve an imaginary political problem, it isn't designed to function as a currency that would facilitate commerce. To do that a successful virtual currency must be elastic. Its supply must expand and contract with demand, and it must maintain a fixed exchange rate with the local currency.
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A virtual casino chip is the Bitcoin killer. Best yet, it would use the existing Bitcoin code as its backbone.
How would it work?
Simple, a casino would replace the network of "miners" and the code would be altered to allow the casino to "mine" as many BitChips as demanded, i.e. make the Bitcoin elastic. No longer would the Bitcoin have a 21 million Bitcoin maximum. Almost everything else would be the same. This essentially creates a stable Bitcoin, a $1 casino chip is worth $1, and that value never changes. Just like a $25 gold coin minted in 1800 still buys $25 worth of good today (unless you melt it down, but then it won't be a $25 coin anymore).
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Under the virtual BitChip system, the casino replaces the "miners." People would go on-line and visit for example Caesar's Castle Casino. They would buy virtual Caesar's Castle Casino Virtual Chips or CCC BitChips.
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Best of all, because the BitChip is convertible and will always hold its value, there is no problem with long-term planning, budgeting and most importantly, paying taxes. Merchants don't have to worry about their BitChip losing value so when it gets converted to dollars there isn't enough to pay the IRS. A worst case scenario would be having to fly to Las Vegas to convert the chips in person.
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Worth reading for a laugh
