Topic: A Small Idea : a digital currency unit - page 2. (Read 1812 times)

Isn't that exactly what Bitpay does?

Why not just make a system that still has a dollar value tied to it, and it just calculates that price in bitcoins and charges that. Like baker wants 3$ for a loaf of bread, but in order to charge it he has a QR code (or something) that has automatically calculates what 3$ is in bictoins and charges that, then he can convert that to dollars or keep the bitcoins. I think that is better then creating a new currency.  

What you've done here is reinvent money. It's not actually necessary as money was already invented quite a while ago. Let me explain what I mean:

Money was invented because the barter economies that existed before money weren't scalable. If I grow tomatoes, and I want to go to the market and buy cucumbers, oranges and apples, I need to decide how many tomatoes I'm going to pay per cucumber, how many per orange and how many per apple (assuming the cucumber-grower, the orange-grower and the apple-grower actually want tomatoes to begin with). Therefore, the market has to undergo price discovery based on supply and demand, for every pair of tradable goods. There needs to be a tomato-cucumber exchange rate, a tomato-orange exchange rate, a cucumber-orange exchange rate, and so on.
That works out to be n(n-1)/2 exchange rates, for n tradable goods. In other words, the number of exchange rates in the market grows exponentially with the number of goods.

If all goods are traded against one standard, say gold for example, you only need n exchange rates for n tradable goods - gold-tomato, gold-cucumber, and so on. I will exchange my tomatoes for gold, and then exchange that gold for cucumbers, oranges and apples. This has another big advantage - expanding the market range and increasing tradability. I don't have to find someone who wants tomatoes AND is willing to sell cucumbers - I can sell tomatoes to anyone who wants them, and use the gold I receive to buy cucumbers from anyone selling them. I can exchange tomatoes for cucumbers even if there isn't a single counterparty in the entire world interested in exchanging cucumbers for tomatoes. That's why money is so useful.

Today we've come full circle: there are so many currencies in the world, both crypto and fiat, that we've returned to the original problem of multiple exchange rates and limited trading opportunities. The universal standard you're suggesting aims to solve this problem, but it really doesn't. What is a Uc worth? You seem to want it to have a constant economic value vs. certain goods, such as a sandwich. But the value of a sandwich is also variable, depending on multiple economic parameters, and the values of different goods vary in different ways. In the end of the day, you'd have no choice but to peg the value of a Uc to something. What will you peg it to? The only viable answer is an existing standard.

This is exactly the solution that currency markets have already found. Most currencies are not regularly traded against each other, but rather against one (or a few) standard currencies. In the legacy financial system, the US dollar is the main standard against which other currencies are traded. In the crypto world, it's Bitcoin. I think most of us here hope that one day, Bitcoin will be the main accepted standard throughout the world.

So you can peg your Uc to an accepted standard which allows for the quantification of value. But then what's the point of having a Uc? How is Uc any different than just using one currency to trade against all others? Unless you can find a more objective way to quantify the "real" economic value of a sandwich, a new universal unit of account is useless.   

The dollar is about as close as you will get to a universal unit of value. Units of gold used to be the universal units of value. That system didn't work very well (or it worked too well, depending on who you talk to).

The euro is a modern example of a universal currency, so if you want to know how well or how badly a universal currency works, take a look at the euro.

Finally, having a universal unit of value doesn't prevent prices from changing.

Could only think of this

Hi, i'm here to talk about an "idea" that poped in my mind just when i wanted to sleep last night (that's always like that ... can't sleep after ...)

What money/currency has not instead of a lot of "measures", the unit :

When you use any unit of distance, you can express it in meters.
When you use any unit of time, you can express it in seconds.

When you use money, everyone use something different. Most of the world express it in Dollar or Euro.

But it's not units, it's currencies, that fluctuate all the time.

Sometimes sellers have to change their prices in "real" money because of the fluctuations, but with digital currencies, the prices are never the same.

Example of a sandwich sold by a baker

Let's say that a baker that sell is sandwich at 3$ want to use digital currencies. So he will try to use BitCoin and use the equivalent in bitcoin to the price in $.

But because of the fluctuation he will have to change the price everyday or so, not to sell it too cheap or too expansive



Like i've read in a french article, a journalist tried to buy something in a bakery "accepting Bitecoins". But the baker had stopped to took Bitcoins, because he thought he couldn't keep with the pace of this currency.

Why not use a fixed unit ?

So i thought, if we could use a international/universal unit, like any measures, could it make things easier ? (Like gold was used before i think ?)

That's what i mean by 'universal currency unit' (or 'unic' / Uc)

If you set a FIXED unit, and put currencies value with it, you can express every currency in this unit, exchange what you want of this unit using many currencies.

For digital currencies which have a very fluctuating value, maybe a short life, would it be really useful ?

And you can set something that is not related to any country (because even real money can be expressed in it)

So for the case of our baker, he could give the price of his sandwich in Unic and his country money (like we had for euro when it came)

He will just have to say what currencies he accept



So i think this would help to make seller accept better the digital currencies

Or maybe i'm just a fool, and for sure i forgot a lot of parameters ^^


What's next ?

if you think it's an interesting idea, vote for it.

If you would want to create something on that, or discuss more about it, i'm about to make a forum.

If you think it's really stupid, say it too  

(ps : i will rewrite this post, it's a little messy ...)