The RealCoin Idea

[markm]

Okay, so the proposal is multiple reserve rather than fractional reserve, fine.

However part of what I liked about the Freeciv Nations and Multigalactics currencies concept was one could hopefully end up not only stabilising your several hundred (one per galactic nation plus one per multigalactic corp that chooses to issue its own currency like GMC and GRF) currencies BUT ALSO MAYBE BITCOIN TOO.

The concept was our warchest would end up not only having piles of different kinds of fiat and piles of bitcoins and piles of devcoins and piles of groupcoins and piles of i0coins and piles of ixcoins and piles of litecoins but also piles of each of potentially hundreds or thousands of other currencies, each wielded by some despot or royal family or republic or communist-party or democratic process, each using its own "warchest" to stabilise its own currency AND MAYBE BITCOIN TOO.

The whole idea of each and every game-nation being able to issue its own currency or currencies is not intended to detract from bitcoin whatsoever, it is intended to show how useful the whole bitcoin concept and algorithms are and provide endless numbers of possible baskets one could form from one's choice of which of these currencies one thinks the entity behind it is worth your while to ally with or go to war with or ignore or whatever.

Bitcoin provides all of them with the ability to put aside the whole legal crap about fiat currency, and have fun with the whole actual empirical doing of stabilising currencies, coping with what happens when the Foo of the Manchu deliberately turns the Manchu currency into a scam (as if anyone didn't expect him to, like duh, the deviousness of the Foo of the Manchu is infamous) and so on...

-MarkM-

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[cunicula]

Thanks D&T. I appreciate your ability to get past my megalomania. Also, sorry for going apeshit on you SgtSpike. My teaching evaluations always say that I am a poor communicator and it must be true. I have some issues.  I'm afraid that my reputation and communication ability hamper my ability to spread ideas. No one is going to hire me to handle public relations. I say things like the CEO of Citibank on national TV regarding public anger against bank executives [something like] "It is sad that America has become a country where people hate anyone who is better than them"

D&T, if you want to start a new post with the proposal, it might be a good idea. We would need to eventually attract interest from a talented coder for the new currency to work. He could potentially be paid with seed capital or shares in the enterprise.

Like D&T, I was thinking that the trust would start with seed capital, and then charge say a 0.3% fee on any txn with the trust's exchange. 0.2% would go to increasing the size of the reserve and 0.1% would go to reward the investors. There would also be a 0.1% mandatory txn fee which could pay miners on all txns.

So the total fee on the exchange txn would be 0.4%. The use volume is potentially large because daytraders could use the exchange as a substitute for trading on Mt. Gox. Given the other hassles associated with Mt. Gox, the fees should be low enough to be competitive.

As for the seed capital, I was thinking that say 50 trustees could submit 50 BTC each which would be locked in the venture as equity. These 50 trustees would share an m-of-n multisig account on bitcoin and an m-of-n multisig account on the new currency which would be used for exchange. Any txn with either currency would need to be signed by at least 25 of the 50 trustees.

The identities of these trustees could be anonymous if desired. It could be that some people submit 50 BTC several times, that doesn't really matter. It is just like they are buying multiple shares.

[SgtSpike]

Thanks D&T. I appreciate your ability to get past my megalomania. Also, sorry for going apeshit on you SgtSpike. My teaching evaluations always say that I am a poor communicator and it must be true. I have some issues.

Like D&T, I was thinking that the trust would start with seed capital, and then charge say a 0.3% fee on any txn with the trust's exchange. 0.2% would go to increasing the size of the reserve and 0.1% would go to reward the investors. There would also be a 0.1% mandatory txn fee which could pay miners on all txns.

So the total fee on the exchange txn would be 0.4%. The use volume is potentially large because daytraders could use the exchange as a substitute for trading on Mt. Gox. Given the other hassles associated with Mt. Gox, the fees should be low enough to be competitive.

As for the seed capital, I was thinking that say 50 trustees could submit 50 BTC each which would be locked in the venture as equity. These 50 trustees would share an m-of-n txn account on bitcoin and an m-of-n txn account on the new currency which would be used for exchange. Any txn with either currency would need to be signed by at least 25 of the 50 trustees.

No worries.  It didn't help that I thought you and markm were the same person most of the time while I was reading, so I can't blame you entirely.

[Garr255]

In response to a few people claiming that whatever programmer creates a fork is going to imply his own rules, good or bad, I'd like to disagree. I want to program an experimental fork and I'd like to take many things into consideration, obviously. I like the idea of having a backed currency, and I think we should find a way to do this without it being centralized. I am probably going to start programming this this summer, because I'm in school now and I probably should focus on that, unlike all of my previous years.

If anyone would like to help sometime in the future, let me know!

-Garrett

[Uhlbelk]

Or we could have DryCleanedGarmentsCoin, backed by drycleaned garments, and have blockchain based laundry-tickets redeemable for the garments, and people could barter those?

Let's go for a more universal and purer form of labor: hugs

The only way to combat the problem is to attach a system outside of fiat currencies. So what concept is universal to most humans....
Well if time is money then it must be the time that is worth something. Time and the Goods that were produced in said time.

Let us say we (the community that accepts the new coin) attached the value of one hour of time per one coin.
Of course to make that work the community would need to understand that everyone's hour is worth the same. If you are a Doctor then your Hour is worth the same as the hairdresser down the street. What matters is the time you put in to your line (or lines) of work. So long as your skill meets a need of the community then your effort is paid by trading the coins for others services.

It runs along the concept of barter system but levels the playing field for all ages.
The time dollar is old hat and has been working well for many communities it would seem. One particular site is already used to keep track of jobs needing done and who has what time creds. What I would like to see is a decentralized form of this system by attaching the value to a btc fork.

Naturally we would need to figure out the least amount of time$s needed to supply basic needs. The community may need to adjust its greed level to make things work for everyone (agreeing to sell necessary goods at affordable levels).

If for some reason it becomes necessary to convert a time$ to a local currency then perhaps we could give its value as the local minimum wage (unless of course that is only an American thing.)

https://bitcointalk.org/index.php?topic=41513.msg1145565#msg1145565

[SgtSpike]

Or we could have DryCleanedGarmentsCoin, backed by drycleaned garments, and have blockchain based laundry-tickets redeemable for the garments, and people could barter those?

Let's go for a more universal and purer form of labor: hugs

The only way to combat the problem is to attach a system outside of fiat currencies. So what concept is universal to most humans....
Well if time is money then it must be the time that is worth something. Time and the Goods that were produced in said time.

Let us say we (the community that accepts the new coin) attached the value of one hour of time per one coin.
Of course to make that work the community would need to understand that everyone's hour is worth the same. If you are a Doctor then your Hour is worth the same as the hairdresser down the street. What matters is the time you put in to your line (or lines) of work. So long as your skill meets a need of the community then your effort is paid by trading the coins for others services.

It runs along the concept of barter system but levels the playing field for all ages.
The time dollar is old hat and has been working well for many communities it would seem. One particular site is already used to keep track of jobs needing done and who has what time creds. What I would like to see is a decentralized form of this system by attaching the value to a btc fork.

Naturally we would need to figure out the least amount of time$s needed to supply basic needs. The community may need to adjust its greed level to make things work for everyone (agreeing to sell necessary goods at affordable levels).

If for some reason it becomes necessary to convert a time$ to a local currency then perhaps we could give its value as the local minimum wage (unless of course that is only an American thing.)

https://bitcointalk.org/index.php?topic=41513.msg1145565#msg1145565

Completely terrible idea.  If you pay the same to a doctor as a hairdresser, then no one becomes a doctor.  Who is going to go through an extra dozen years of schooling, have a high-stress, long-hours job, have the threat of malpractice lawsuits constantly hanging over their heads with every move they make, only to make the same amount as the barber down the street who dropped out of high school?  Maybe a handful of people would feel it is their "duty" or "calling" to go through all that to help civilization, but certainly, the number of people who would become doctors would be far fewer than today, and certainly far fewer than necessary to server the general public.

And that could be extrapolated further.  Who is going to be a manager with a degree in manufacturing engineering when they could skip college and simply be an assembly line worker making the same dough?  Who is going to be an assembly line worker when they could do what they truly love and just write music all day?  So, we end up with a society full of a bunch of starving musicians and artists who can't buy food or clothing or shelter or transportation because no one is willing to make any of those things, because everyone wants to be a musician.

[SgtSpike]

Ideas like "everyone should be paid the same" are simplistic.
Wages are simply prices.  They are the price of persons labor/time.

Imagine if someone proposed all products and services must be priced exactly the same.
Ferrari & a bike must cost 10,000 BTC each.  Who would build Ferrari's?
A broken TV and a brand new house must both cost $100.  Hmm I think I will trade in some broken TV for houses.

When you apply the same "logic" to anything other than wages it become painfully obvious how silly it is.
So why do some products cost more than others?  Supply & Demand.  People are willing to pay a premium for iphones over other products hence the price is high.  At one time Motarolla (RAZOR anyone) products sold at a premium but not anymore.

Imagine if someone forced Apple & Motorolla to both sell their phones for the same price.  Say $200.  What would happen?  Chronic shortages of iphone and a black market where iPhones sold closer to what supply & demand supported.

Price controls on products don't work.  Wages are simply the price of labor.  Not all labor is equally valuable.

Excellent post DAT, as usual.

[Sunny King]

Of course it's clear to people with basic understanding of the machinery of free market that everyone's time should not be worth the same. Otherwise it's a system of charity rather than a currency.

On the other hand minting based on time is possible with centralized identification service (i.e. not applicable to the realm of crypto-currency). I think someone published a paper on this recently, this system includes built-in welfare because you get to mint coins by just living your life, but that probably would likely provide only bare mininum of subsistence.

[Uhlbelk]

Which gives rise to the fact that we as humans will never rise above doing things for personal gain.
But as stated, it would take a society that can provide basics of living to everyone, and above that would be your motivation to work for more.
So much for a Roddenberry future.
It must be mentioned that many people in this world actually volunteer their time as duty to fellow homo sapiens (and other animals too).

As for costs of things, our current market is way inflated due to government (and other lobbying corp) influence. So those currently gouging the system would not have the means to do so.

Wages, perhaps a good motivator for going into a more educated profession would be extra time allotted or the society credits you the time spent educating yourself.... Imagine that, being paid to educate yourself for the betterment of society.

Thanks for your views.

[SgtSpike]

Of course it's clear to people with basic understanding of the machinery of free market that everyone's time should not be worth the same. Otherwise it's a system of charity rather than a currency.

On the other hand minting based on time is possible with centralized identification service (i.e. not applicable to the realm of crypto-currency). I think someone published a paper on this recently, this system includes built-in welfare because you get to mint coins by just living your life, but that probably would likely provide only bare mininum of subsistence.

I think this would be an interesting experiment.  And not even at the "bare minimum of sustenance" level either - somewhere far below that.  But, an experimental currency that would give out an equal (per person) and continuous flow of digital coins to people based on some set of criteria that would most definitely set each person apart from the next.  DNA, maybe?  Certainly, the logistics of identifying a person and making sure they do not receive more than one payout would be by far the most difficult part of such a project.  Regardless, it would be incredibly interesting to see how people valued these coins given out for free.  They could actually provide a bare minimum of sustenance, depending on how much they are in demand.  Or they could be worth all of $0.10 for a month's worth.  Who knows?  The market would certainly set the price...

Which gives rise to the fact that we as humans will never rise above doing things for personal gain.
But as stated, it would take a society that can provide basics of living to everyone, and above that would be your motivation to work for more.
So much for a Roddenberry future.
It must be mentioned that many people in this world actually volunteer their time as duty to fellow homo sapiens (and other animals too).

As for costs of things, our current market is way inflated due to government (and other lobbying corp) influence. So those currently gouging the system would not have the means to do so.

Wages, perhaps a good motivator for going into a more educated profession would be extra time allotted or the society credits you the time spent educating yourself.... Imagine that, being paid to educate yourself for the betterment of society.

Thanks for your views.

You are completely correct.  Humans will never rise above doing things for self interest or self preservation.  Humans will always take the easiest path to achieve what they want.  Some people volunteer (and don't get me wrong - I volunteer too on a regular basis) because it makes them feel good, and thus helps them achieve their goal of happiness.  And it only takes one bad apple (AKA, a freerider) to spoil an entire utopia based on everyone "contributing equally".

I do agree that government adds a lot of inefficiencies, but that doesn't mean it still wouldn't take a great deal more effort to become and work as a doctor than it would be to be an assembly line worker, or a barber.

It's a pipe dream, and a ridiculous one at that.  Only really possible in small tribal communities where everyone knows each other and can hold each other accountable, and jobs more or less require the same amount of training/qualifications to accomplish.  Certainly not in the anonymously-global world we live in today with an incredibly wide spread between skills, education, and work load levels.

[Uhlbelk]

"  Only really possible in small tribal communities where everyone knows each other and can hold each other accountable"


I agree Absolutely. I reference timebank : http://timebanks.org/ taking this concept and moving the record keeping to use btc instead of the 3rd party keeping track of who has what coins.
That would also keep eyes from everyone's business.

Again, thanks for your more then honest input.

[SgtSpike]

"  Only really possible in small tribal communities where everyone knows each other and can hold each other accountable"


I agree Absolutely. I reference timebank : http://timebanks.org/ taking this concept and moving the record keeping to use btc instead of the 3rd party keeping track of who has what coins.
That would also keep eyes from everyone's business.

Again, thanks for your more then honest input.

I'm all for more user groups making use of Bitcoins!

[Bitcoin Oz]

Interesting.

[edmundedgar]

You cannot enforce a peg of $1 without a centralized warchest of US dollars.

I think you could, as long as there's an assumption that new money will be need to be created some time in the future. As long as you've got that you can set up incentives so that speculation creates stability instead of volatility:

1) When the currency is too weak, people can volunteer to destroy coins that they own. In exchange, they get a voucher entitling them to a share of the proceeds of:
2) When the currency is too strong, newly-created coins get distributed to people holding vouchers.

The vouchers would presumably be just be another kind of transaction on the blockchain.

What you do need is a reliable source of information about the exchange rate so your network knows when money needs to be created and when it needs to be destroyed. This is a bit fiddly and trust-requiring, but probably much easier to accomplish than requiring a bunch of people to hold real money and not run off with it.

[dolfcao]

Our team trying to make realcoin to be equal to legal currency like $, 1 REC=1$ maybe, we are not sure about the exchange rate. Because in real life, the purchasing power of 1$ varies at most time.

[solracx]

Haven't seen anything about it lately, but i was thinking and throwing some ideas around

If there were to be a $1/coin altcoin, where all coins are premined and sold at $1, and bought back at any time for $1...

a) How would we remove trust from the equation? how could the money be stored in a transparent way with no way of 'running off' with it? How could we prevent chargeback fraud?

b) Is there a way we could always pay $1/coin?, if there are any fee's, taxes or frauds the money from selling will be less than would be owing if everyone cashed out at once, If there are zero fee's charged (pay $1/coin get paid $1/coin), could it qualify as a not-for-profit and skip some of those fee's and taxes?

c) Unlike realcoin i would want it to be decentralised from the start, what would be a good way to do transaction fees?

i was thinking 1% of the total amount sent by default but the miners can set the minimum they want to accept and the clients can send what they want to send, with a warning about not getting confirmations with <1% fees... or The base fee is the minimum for 51% of miners to accept and then the rewards will find a place between the maximum people are willing to pay in fee's and the minimum miners are willing to mine for

You are looking at something that MoneyGram or Western Union does but using a P2P Decentralized coin.

It is possible to peg a coin,  just create miners that can only collect fees.  no newly minted coins created by miners.   

The only way to acquire a coin is through an exchange.   In that exchange your sell coins only at a fixed price relative to some other currency.    It also means that you buy coins also at that fixed price.     In short, you absolutely need to have the funds in your store so that any run on the bank gives folks there money back.


In short, it is just like any bank... but using p2p to communicate transfers!!

[solracx]

Our team trying to make realcoin to be equal to legal currency like $, 1 REC=1$ maybe, we are not sure about the exchange rate. Because in real life, the purchasing power of 1$ varies at most time.

Certainly possible with crypto-currencies.

If you are interested in this,   I can crank out the actual implementation for you.  PM me, or send email to info@frictionlesscoin.com

[jtimon]

If you have a centralized issuer there's no point in starting a new blockchain.
Use colored coins or ripple to issue your usd IOUs, backed currencies cannot be p2p, period.

[smoothie]

There's no way for a currency to be both pegged AND decentralized.  It just doesn't work.

Right. The pegging goes with centralization. A place where people look to get "the price" or "the law stating the price".

[edmundedgar]

There's no way for a currency to be both pegged AND decentralized.  It just doesn't work.

Right. The pegging goes with centralization. A place where people look to get "the price" or "the law stating the price".

I don't think that's right. The way we'd imagine it done with a crypto-currency the peg would get set as one of the core rules underlying the currency, like the Bitcoin block reward rate. That's sort-of centralized, but it's only adopted by consensus.

Markets tend to have a certain amount of centralization (or have to date) to the extent that there tend to be places - market squares, stock exchanges etc - where all the trading that sets the prices is done. But that doesn't necessarily have to be true, and even if it is the price discovery is still a decentralized process involving a lot of independent traders making their own decisions.

The war-chest model some people have suggested sounds centralized, but again doesn't have to be. I've suggested you can probably maintain the peg without having a war-chest at all, just through the money printing algorithm. On other threads, Croesus has been suggesting a rather complicated idea that I think involves a decentralized participatory war-chest, but I'm not going to pretend to understand it.

If you're pegged to a fiat currency then you're importing centralized control from the central bank of the currency you're pegged to, but even that wouldn't be true if you were pegged to a freely-traded commodity.