What do you think? Bitcoin's RGB network and national currencies

[Elwar]

Sounds logical but I'm not sure any country would embark on such a project anytime soon.
Probably even if they would be half convinced this is a good thing they will hold a referendum for this and I'm willing to bet that not only now, even if we talk 4-5 years from now people would vote against this.

And now that I think about, I believe a lot of governments would only complete half of the plan, issue the stable colored coins, print as many as they can and use them to cover up government expenses forgetting about the second stage and so the value of 1sat/cent would be achieved by the cent being worthless not the other way around.

Yes, the likelihood is certainly low. But just having one small country try it and become successful leads to a domino affect among all other nations.
I just think it would be good to hash out a sound strategy that could be executed if the right government gets put into a position of power that supports crypto.

There would really be no way to "issue" stable colored coins. You are issuing 1 satoshi per "coin". That one satoshi may start out with a price of .001 cents, and fluctuate based on the bitcoin value over time. But people will still have satoshis. When the time comes that one satoshi equals one cent...then you can't dictate what the value is. People can now use that one satoshi as a cent anywhere in the world.

You're essentially putting bitcoins into the hands of the people. Initially a tiny percentage of your overall money supply. Not enough for anyone to really notice. But as the price rises that percentage becomes larger and eventually dwarfs the value of the fiat in the money supply. Such that the fiat currency becomes irrelevant. This will happen globally but on a longer timeframe. Focusing on one forward thinking nation would boost their economy to the moon. All it takes is one intelligent politician in power (I know, not a likely scenario).

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[Indamuck]

If this were to happen a new crypto would have to be created to give everyone a fair shot at the launch.  Bitcoin is already massively skewed towards the whales with very few people in the world even own 1/10th of a coin.  Barely anyone knew about BTC at the start, may as well call it a premine.

[Elwar]

If this were to happen a new crypto would have to be created to give everyone a fair shot at the launch.  Bitcoin is already massively skewed towards the whales with very few people in the world even own 1/10th of a coin.  Barely anyone knew about BTC at the start, may as well call it a premine.

This idea was pitched to Tuvalu with a new coin.

That new coin was called Bitcoin.

They had a fair shot.

[Kakmakr]

The problem I see with this is as follows. Imagine a scenario where a economical strong country wants to destroy an economy of a bunch of smaller countries, so they buy the colored coins of that country and deposit it into a "Burn" address and effectively destroy the currency of that country.  

We do not use colored coins because colored coins can be targeted for whatever reason, so each Bitcoin is the same and no individual or group or country can be exploited or manipulated by actions like this.  

In any way, governments want currencies that they can manipulate, so they would rather opt for a option to create their own "GovCoin" that cannot be manipulated or exploited like this. 

[stompix]

The problem I see with this is as follows. Imagine a scenario where a economical strong country wants to destroy an economy of a bunch of smaller countries, so they buy the colored coins of that country and deposit it into a "Burn" address and effectively destroy the currency of that country.  

So you're basically saying that a country can also destroy Bitcoin, because they can buy all the bitcoins, right?
A country could simply set some fake shops subsidized by them that only sell in Bitcoins, some exchanges with insane low fees and simply get bitcoin after bitcoin without putting buy orders drive price ups and burn them all once they get them.

Why would this strategy work with a small country with a few tens of billions in monetary mass and no with Bitcoin (remember that those 200b include all the lost coins also),

Anyhow, the solution would be pretty simple.
The small country could issue a rainbow coin for every coin that has not moved for x period or for every coin that has been detected as "burned". Just as they do with banknotes that get trashed.

[Elwar]

The problem I see with this is as follows. Imagine a scenario where a economical strong country wants to destroy an economy of a bunch of smaller countries, so they buy the colored coins of that country and deposit it into a "Burn" address and effectively destroy the currency of that country.  

We do not use colored coins because colored coins can be targeted for whatever reason, so each Bitcoin is the same and no individual or group or country can be exploited or manipulated by actions like this.  

In any way, governments want currencies that they can manipulate, so they would rather opt for a option to create their own "GovCoin" that cannot be manipulated or exploited like this. 

The only thing buying all of the colored coins would do is stall the conversion to bitcoin at a price of 100 times the bitcoin price. They still have fiat until that fiat is no longer necessary.

The key hurdle here, I believe, is technical as opposed to economical.

Having a country using colored coins in such small denominations as their cash requires a lot of tiny transactions. This cannot be done on the blockchain as the minimum transaction needs to be around 1k satoshis. It would need to be lightning network based. You would likely need some centralized lightning nodes to handle the transactions because on the Lightning Network you cannot see the source address. So you could send some non-colored coins (bought cheap) to the colored coin network.

I have not figured out this technical challenge.

[buwaytress]

Sorry to sort of hijack this thread but welcome back Elwar, and we're so happy to see you! And really, that's all. Hopefully, the last few months of Bitcoin price developments will be some comfort to what transpired, but onwards and upwards right?

On coloured coins: you guys heard about Spectrum?

Speaking of Tuvalu: I asked someone from there and they never heard about the Bitcoin attempts. Strange for such a small place I thought. I wonder how many people bought their passports.

[Elwar]

Sorry to sort of hijack this thread but welcome back Elwar, and we're so happy to see you! And really, that's all. Hopefully, the last few months of Bitcoin price developments will be some comfort to what transpired, but onwards and upwards right?

On coloured coins: you guys heard about Spectrum?

Speaking of Tuvalu: I asked someone from there and they never heard about the Bitcoin attempts. Strange for such a small place I thought. I wonder how many people bought their passports.

Yep, it was back in 2010 or so. The guy who built the seastead went there to encourage them to integrate Bitcoin as their currency.

Of course, several people go there to try to influence them on many things. He said that there were people there from the Phillipines asking for fishing rights. In exchange they got the president(?) a brand new mercedes to drive around. On an island with about 5 miles of road. He said the guy there who is in charge of the FIFA vote has a lot of power as his one vote is equal to that of other powerful nations. He was there at the same time as congressman Alan Grayson but he did not know what he was there for.

[Elwar]

The key hurdle here, I believe, is technical as opposed to economical.

Having a country using colored coins in such small denominations as their cash requires a lot of tiny transactions. This cannot be done on the blockchain as the minimum transaction needs to be around 1k satoshis. It would need to be lightning network based. You would likely need some centralized lightning nodes to handle the transactions because on the Lightning Network you cannot see the source address. So you could send some non-colored coins (bought cheap) to the colored coin network.

I have not figured out this technical challenge.

It appears that this technical challenge is being overcome by the development of RGB.

I have also learned that many countries are trying to figure out how to have their own crypto currencies based on Bitcoin becoming a bit more mainstream. I do not doubt that within the next 4-5 years there will be some nation in the world that adopts a cryptocurrency or allows it for payments of government services.

This strategy would give the nation a transitional period while also providing them the huge benefits of a currency with DEX, smart contracts and fast low fee transactions.

I have spoken to some people here in Panama that are open to the idea (Panama uses a national currency pegged to the US dollar). The government started working on a cryptocurrency during the pandemic when they were giving out food vouchers to people, they wanted to have the cryptocurrency used for the vouchers accepted at all of the grocery stores.

We already have stablecoins in Tether, DAI, USDC and others so the idea is not too foreign. Having a stablecoin using the Bitcoin Lightning Network that eventually transitions into the nation using bitcoin as their currency would be even better.

It looks like they plan on inflating the dollar to trash status, in so doing they would eventually lose Panama as a nation using their currency. And Panama would then prosper with a currency that doesn't purposefully lose value over time (they really get screwed by using the dollar, the US prints the money and spends it while Panama's currency loses value).