Could/should Bitcoin be changed to stabilize it? How?

[TCraver]

Should Bitcoin be changed in some fundamental fashion, to make it more stable?  Could it?   How?

Maybe create a non-profit trust fund bank that will buy and hold capital assets to "back" BC.   Change from mining free BC, to mining a right to purchase BC at half the current exchange rate, with the income going into the bank.   Anyone could exchange their BC for their share of their current value of those capital assets (minus a 5% withdrawal penalty).  Normally the price would float somewhat above the asset value - when it rises enough, allow the bank to directly create BC and use them to purchase more assets - locking in gains and at the same time keeping the exchange rate from rising too fast, reducing the impact of speculation. 

Objections / alternatives?

[1714657179]

1714657179

[1714657179]

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[twiifm]

Should Bitcoin be changed in some fundamental fashion, to make it more stable?  Could it?   How?

Maybe create a non-profit trust fund bank that will buy and hold capital assets to "back" BC.   Change from mining free BC, to mining a right to purchase BC at half the current exchange rate, with the income going into the bank.   Anyone could exchange their BC for their share of their current value of those capital assets (minus a 5% withdrawal penalty).  Normally the price would float somewhat above the asset value - when it rises enough, allow the bank to directly create BC and use them to purchase more assets - locking in gains and at the same time keeping the exchange rate from rising too fast, reducing the impact of speculation. 

Objections / alternatives?

Just peg it to a major currency.  I don't know who could do this though. 

[TCraver]

Just peg it to a major currency.  I don't know who could do this though. 

I was only proposing moderating the fluctuations, but yes, finding a way to fix the exchange rate would do that.

But that's really just sort of a way of restating the problem, isn't it? 

The question is - HOW to do it, and who has the power to do it with Bitcoin?

[practicaldreamer]

Good questions to ask.

Unfortunately i don't have any answers.

Soviet Union, via planned economy, had an autonomous currency (that couldn't be forex traded (or even leave the country)). Its value was stable. Don't know if this is at all relevant - probably not - just thinking aloud.

How could we acquire BTC if it can't be traded ? Could it be allocated according to (a pre ordained/consenually agreed upon) contribution to the network (economy in the case of the Soviet Union). Maidsafecoin (safecoin) will work in this manner, as I understand it - coin allocated according to drive space/bandwidth/cpu time etc. Of course, these things still have to be bought.

How about contributions that can't be bought ? I'm thinking of intellectual contributions being rewarded with coin. The value of the contribution would be consensually arrived at/agreed upon by each and every other participant of the network. Evolutionary, kind of.

Again, just thinking aloud - I'm sure this stuff has already been discussed elsewhere (many times)  



But yes, when you are relying on it to buy a loaf of bread - or pay your mortgage  -  a 20% drop in value within 2 weeks is not an acceptable characteristic of a currency.

[twiifm]

Just peg it to a major currency.  I don't know who could do this though. 

I was only proposing moderating the fluctuations, but yes, finding a way to fix the exchange rate would do that.

But that's really just sort of a way of restating the problem, isn't it? 

The question is - HOW to do it, and who has the power to do it with Bitcoin?

Write a code that pegs it to USD, then have everyone hard fork.

If you want to know why major currencies are stable compared to minor ones.  It's because the corresponding economies/ govts are stable.

[Q7]

Should Bitcoin be changed in some fundamental fashion, to make it more stable?  Could it?   How?

Maybe create a non-profit trust fund bank that will buy and hold capital assets to "back" BC.   Change from mining free BC, to mining a right to purchase BC at half the current exchange rate, with the income going into the bank.   Anyone could exchange their BC for their share of their current value of those capital assets (minus a 5% withdrawal penalty).  Normally the price would float somewhat above the asset value - when it rises enough, allow the bank to directly create BC and use them to purchase more assets - locking in gains and at the same time keeping the exchange rate from rising too fast, reducing the impact of speculation. 

Objections / alternatives?

And follow the same route on what fiat is going through right now? the non-profit trust fund bank like what you say could end up as centralized bank to control flow of bitcoin. In other words, open up the possibility for manipulation? No way. Let it be in a free market.