killer app idea :)

[albert11]

oh my bad you are absolutely correct not sure why but i always thought you couldn't deposit btc and lock in the dollar amount on most exchanges, i thought only a few like btc-e did that but you had to sell those coins so ultimately lose money and never really trusted those site either.

Actually it would be nice to have a way of locking the dollar amount in our desktop wallet for instance, being able to stabilize the value without using a third party that send your info to DEA

One solution is to use a combination of Peter Todd's CHECKLOCKTIMEVERIFY -http://www.mail-archive.com/bitcoin-development@lists.sourceforge.net/msg06250.html with a sidechain to lock in BTC in a bond where the sidechains algo took a rolling volatility average over the preceding year to calculate the expected risk the community would feel comfortable accepting for digital representations of fiat /gold /ect backed securities that would lock themselves on the blockchain and pay dividends, be partially refunded, or bought back after maturity.

The way it would work in practice:

1) download a wallet and deposit arbitrary amount ... i.E.. 2 BTC(lets say is worth 500usd at the time)
2) Decide you want half of it denominated in a more stable currency and half in BTC
3) Transfer half BTC to purchase 250 of bitusd(name doesn't matter) but essentially a fiat representation asset on a Bitcoin sidechain which locks in 250 usd of bitcoin of 1 Bitcoin. The sidechain algo calculates +/-40% volatility during the previous 12 months so allots 200 bitusd tokens that are pegged to the value of the usd fiat.
4) Consumer now has a wallet with security assets backed by BTC and straight BTC (200 worth of  bitusd and 1 bitcoin)
5) Consumer can now make purchases using the security or bitcoin depending on which is accepted or more advantageous at the moment. (I.E.. if BTC is up spend the BTC, if not than spend the bitusd.


When the timelock is mature the user has several choices :

1) If Bitcoin has increased in value above the initial purchase price the algo would than calculate the previous volatility average and allow the user to either receive a dividend of the difference in BTC, a securitized asset like bitgold/bitusd/bituero/ect , or they can receive all their BTC back and the appreciation with a buyback.

2) If Bitcoin has decreased in value below the initial purchase price the algo would  than calculate the previous volatility average and allow the user to either buy the difference to keep their securitized asset valuation or forfeit their deposited BTC which will than be sold on a trustless decentralized exchange for any other of the sidechains securitized assets.

This would all work fine assuming Bitcoin survives.

Anybody is free to steal this idea and make it your own or modify it as long as you do so for the good of the community....

sounds good,I ll have a look into that

[Danydee]

I am seriously starting to get irritated by all those comment claiming bitcoin isnt viable solution because its value is highly volatile, these articles are popping up everywhere

Of course it is volatile,people are not used to free unmanipulated markets, are people really expecting stability when you have a market cap of 3billions? 3 billions is equivalent to 1 very rich man... , bitcoin will stabilize if it is mass adopted and the average joe uses it in his every day life.

I feel that people who badly want bitcoin to fail will use the unstability issue to scare people away and as a result bitcoin not be adopted.


The volatility problem has been sorted on merchants side with bitpay, coinbase,etcc system but someone needs to come up with an app to protect buyer against volatility.

An app that integrates a btc exchange within the payment , customers hold $ and when he wants to pay in bitcoin  the conversion usd-->btc would be done automatically and instantly within the app ,something that will render value unstability totally irrelevant

I know it might be a  more difficult than it sounds but iam sure people who have the skills can come up with such system.

The big payment processor company and banks are coming up with new similar technology and the average joe will use them if they are easier to use because he doesnt understand the importance of not using government issued money.

If people can convert and pay instantly in btc they will do it because btc merchants are offering discount if people pay in btc

This is a technology and innovation war

No, that isen't this

 bitcoin is not suitable as a ordinary payment method, he does not have the specifications of a common currency.

 I'ts great to have the possibility of payment in bitcoin for whose like this so bitcoin does not work as a classic currency.



 

[albert11]

I am seriously starting to get irritated by all those comment claiming bitcoin isnt viable solution because its value is highly volatile, these articles are popping up everywhere

Of course it is volatile,people are not used to free unmanipulated markets, are people really expecting stability when you have a market cap of 3billions? 3 billions is equivalent to 1 very rich man... , bitcoin will stabilize if it is mass adopted and the average joe uses it in his every day life.

I feel that people who badly want bitcoin to fail will use the unstability issue to scare people away and as a result bitcoin not be adopted.


The volatility problem has been sorted on merchants side with bitpay, coinbase,etcc system but someone needs to come up with an app to protect buyer against volatility.

An app that integrates a btc exchange within the payment , customers hold $ and when he wants to pay in bitcoin  the conversion usd-->btc would be done automatically and instantly within the app ,something that will render value unstability totally irrelevant

I know it might be a  more difficult than it sounds but iam sure people who have the skills can come up with such system.

The big payment processor company and banks are coming up with new similar technology and the average joe will use them if they are easier to use because he doesnt understand the importance of not using government issued money.

If people can convert and pay instantly in btc they will do it because btc merchants are offering discount if people pay in btc

This is a technology and innovation war

No, that isen't this

 bitcoin is not suitable as a ordinary payment method, he does not have the specifications of a common currency.

 I'ts great to have the possibility of payment in bitcoin for whose like this so bitcoin does not work as a classic currency.



 

Bitcoin surely isn't an ordinary payment method but it has all the characteristics needed to be a currency (bar volatility)even more so than fiat actually.

Interested to know what "specifications" does it lack? and why bitcoin doesn't work like a classic currency?

[albert11]

Hi OP,

Interesting post, i agree with most of what you are saying and have been thinking the same myself for a long time however i don't like your proposed solution. If i understand you correctly, your proposed exchange would only utilize Bitcoin as a payment network (holding users money in $ until the customer purchases something at which point the $ is converted to BTC for payment purposes and sent to its destination, probably to be converted back to $ at the other end of the transaction).

I believe Bitcoin has to be used as both a payment network and as a currency because one can't function without the other. It is the value of the currency that gives miners incentive to secure/run the decentralised payment network. No currency, no network.

After thinking long and hard about why the average joe isn't falling over themselves to acquire bitcoin therefor pushing the price up legitimately due to demand, and why the price continues to steadily fall even when adoption numbers increase and general good news keeps flooding in I've come to the conclusion that price volatility is the cause of both.

People are rightly sceptical of 'internet money' that fluctuates in value so wildly so aren't jumping in as should be expected by now, imagine being paid your usual salary in bitcoin only to find the next day your earnings won't even buy a loaf of bread, extreme example i know but you get my point. Average joe thinks "i'll just stick with what i know".

As to the reason why bitcoin is experiencing such price volatility i believe it is due to using old 19th/20th century bid-ask exchange systems that were DESIGNED to generate volatility and be open to manipulation in the way that they operate.

Currently BTC price on major exchanges is in the $230 - $240 range. However i value my BTC at a far higher figure as do many others, but if one single person sold a BTC for $100 within the bid-ask exchange system, that would then automatically value my and all others BTC at $100. Albeit only for a short time but still.

This is a flawed and unfair way of determining the value of something in my opinion, we are using 19th/20th century bid-ask exchange systems to determine the value of a 21st century financial asset. Who said we had to use the bid-ask exchange system to determine the price? MTGox because they were the first bitcoin exchange and copied the existing financial trading markets... we all know how well that one worked out and we all know how existing financial markets can be manipulated by those with enough money/power/connections.

So maybe there is another way to determine the true real time (fiat) value of a bitcoin which will decrease overall volatility and enable the fiat price to be set in a fair and stable manner where EVERYONE can dictate the price of a bitcoin without even having to own or sell one., similar to how the gold spot price is set twice a day.

Fix the volatility issues = fix the adoption issues
Fix the adoption issues = fix the the current price issues (which in my opinion will increase due to increased adoption (law of demand and supply)
Fix the price issues = fix the miners not currently making any profit issues

Everything is connected, but people need to change the way the price is set in order for everything else to fall into place, I do have a potentially very simple solution that might make bid-ask exchanges systems obsolete, but right now i just don't have the energy to implement it.

Regards,
J

I agree, my solution is not ideal as it defeats the purpose of btc as a currency as you explained . But i just suggested that as i really don't see how people will use it as a currency when it is so volatile.

It's very interesting what you said about bid/ask but how would the btc value work out if this system was obsolete?

I'm also curious to know about your simple solution (roughly)

[nextgencoin]

Isn't there already a coin that mirrors the value of the Dollar? I can't remember its name right now, but it exists.


Yes Bitcoin is a fast way to transfer money but I think seeing Bitcoin as a better Paypal is seriously flawed PR focus for Bitcoin. People should be pushing the idea of Bitcoin being sound money due to its scarcity. The only reason its volatile is cause there are so few actual users of it. All currencies are volitile but once you have 100 million people using one it finds its value pretty fast and is stable. I personally think we need to see Bitcoin in the 10's of thousands before we start to see 'stability'.

[Bitcoinexp]

Isn't there already a coin that mirrors the value of the Dollar? I can't remember its name right now, but it exists.


Yes Bitcoin is a fast way to transfer money but I think seeing Bitcoin as a better Paypal is seriously flawed PR focus for Bitcoin. People should be pushing the idea of Bitcoin being sound money due to its scarcity. The only reason its volatile is cause there are so few actual users of it. All currencies are volitile but once you have 100 million people using one it finds its value pretty fast and is stable. I personally think we need to see Bitcoin in the 10's of thousands before we start to see 'stability'.

Bitcoin's volatility is constantly scaring other would-be users from accommodating it into their daily lives. But then bitcoin needs mass adoption to ensure it's stability. It's a vicious cycle which needs something to flip things over. 

[albert11]

I came accross this site https://coinapult.com

it basically enables you to lock your btc for £,$ euro or even gold,silver. It is very easy to use, they dont ask id check for locking/unlocking coins and you can do so at any time.

Only drawback is that the site is on a single server and could potentially go down anytime. I wish people would create same kind of projects but open source.

[manselr]

Post it in the marketplace and search for investors and do it yourself.

[Danydee]

I am seriously starting to get irritated by all those comment claiming bitcoin isnt viable solution because its value is highly volatile, these articles are popping up everywhere

Of course it is volatile,people are not used to free unmanipulated markets, are people really expecting stability when you have a market cap of 3billions? 3 billions is equivalent to 1 very rich man... , bitcoin will stabilize if it is mass adopted and the average joe uses it in his every day life.

I feel that people who badly want bitcoin to fail will use the unstability issue to scare people away and as a result bitcoin not be adopted.


The volatility problem has been sorted on merchants side with bitpay, coinbase,etcc system but someone needs to come up with an app to protect buyer against volatility.

An app that integrates a btc exchange within the payment , customers hold $ and when he wants to pay in bitcoin  the conversion usd-->btc would be done automatically and instantly within the app ,something that will render value unstability totally irrelevant

I know it might be a  more difficult than it sounds but iam sure people who have the skills can come up with such system.

The big payment processor company and banks are coming up with new similar technology and the average joe will use them if they are easier to use because he doesnt understand the importance of not using government issued money.

If people can convert and pay instantly in btc they will do it because btc merchants are offering discount if people pay in btc

This is a technology and innovation war

No, that isen't this

 bitcoin is not suitable as a ordinary payment method, he does not have the specifications of a common currency.

 I'ts great to have the possibility of payment in bitcoin for whose like this so bitcoin does not work as a classic currency.



 

Bitcoin surely isn't an ordinary payment method but it has all the characteristics needed to be a currency (bar volatility)even more so than fiat actually.

Interested to know what "specifications" does it lack? and why bitcoin doesn't work like a classic currency?

 a classic currency is mainly a tool of exchange more than anything else, she doesn't need a constant work for generating (that like the gold or the silver), she's quantity and value can be adapted at will.

a too much obstinacy to make bitcoin a simple mean of payment will lead him to an destruction .




 the system you describe is a very good thing. I don't say otherwise
maybe well use it when bitcoin has crossed this stage of torments.

[Lauda]

How about you read my original post properly. Did i ever mentionned that i had the intention of doing this without a license? or even doing it myself?

your answer was off topic and inappropriate no offence though

Here was my question:

why do you think the idea isn't bulletproof? what issue could such idea pose?

No, the answer is not off topic (i.e. check definition). Inappropriate or not, that's not my problem, it's your subjective opinion of my answer.
You never mentioned getting a license, so this goes both way.

The idea helps support the view of Bitcoin in $ or other currencies. That is not the right way.
Let us compare to gold. When you look at your items made out of gold, do you only think of about its value?
This was not what Satoshi intended for Bitcoin, I would say.