Topic: Can we fix excessive volatility? - page 2. (Read 2391 times)
Then you are in fact counterfeiting USD in a P2P network
Pegcoin would be awesome, but I don't see how you could make it work.
Why it wouldn't work in your opinion? The deficit of BTC's for withdrawals in case the exchange rate drops?
nothing can touch utopia
The thing is, where would you get the exchange rate from? And what would prevent people from charging more than 1 USD for 1 virtual dollar when there isn't enough supply to cover the demand?
Good point. Perhaps compute an average from the main BTC exchanges? The created arbitrage opportunity should also make their quotes equal, theoretically.
Regarding the supply, it would be unlimited.
The thing is, where would you get the exchange rate from? And what would prevent people from charging more than 1 USD for 1 virtual dollar when there isn't enough supply to cover the demand?
My bad, and my thought was that bitcoin was a exercise in getting away from governing in general.
To me the exchanges just exist so that nonminers can have some.
That you guys value yourself by looking at the outside is the problem and there is no solution.
To me the exchanges just exist so that nonminers can have some.
That you guys value yourself by looking at the outside is the problem and there is no solution.
How is my idea of a Dollar pegged crypto-currency hurting your utopia? It would be just a handy proxy for transacting and a quick way to escape the volatility and near-term losses (without having funds transfered all the way back to fiat), that's all.
My bad, and my thought was that bitcoin was a exercise in getting away from governing in general.
To me the exchanges just exist so that nonminers can have some.
That you guys value yourself by looking at the outside is the problem and there is no solution.
To me the exchanges just exist so that nonminers can have some.
That you guys value yourself by looking at the outside is the problem and there is no solution.
Feds would likely shut it down for similar reasons as to why they shut down Liberty Coin.
Saying they are equivalent to US dollar is dangerous.
Whatever group is behind it in charge of the infinite supply releasing and removing currency as necessary to keep it at a dollar would probably end up in jail.
But I'm no law expert. It just sounds like something that would legally be dangerous to try.
Saying they are equivalent to US dollar is dangerous.
Whatever group is behind it in charge of the infinite supply releasing and removing currency as necessary to keep it at a dollar would probably end up in jail.
But I'm no law expert. It just sounds like something that would legally be dangerous to try.
Well, it is sort of hard to "shut down" a p2p crypto-currency, isn't it?
Feds would likely shut it down for similar reasons as to why they shut down Liberty Coin.
Saying they are equivalent to US dollar is dangerous.
Whatever group is behind it in charge of the infinite supply releasing and removing currency as necessary to keep it at a dollar would probably end up in jail.
But I'm no law expert. It just sounds like something that would legally be dangerous to try.
Saying they are equivalent to US dollar is dangerous.
Whatever group is behind it in charge of the infinite supply releasing and removing currency as necessary to keep it at a dollar would probably end up in jail.
But I'm no law expert. It just sounds like something that would legally be dangerous to try.
Does anyone else have more relevant thoughts?
You raise some very good points about the volatile nature of virtual currencies which we have seen recently. I believe that it is more a supply and demand thing. Bit coins was in the news and hyped up during the early part of this year which probably caused a huge amount of interest in virtual currencies. However, if one day merchants are able to devise a system to provide bit coins instantly for credit cards or voucher codes etc therefore making bit coins more accessible then we could see a fall in the BTC/USD because of the supply to the greater market.
I had a revelation the other night - why don't we build a decentralized, open-source crypto-currency that is pegged (protocol-wise) to the US Dollar, which could anytime be bought with and sold for Bitcoin automatically (and perhaps exclusively), so to speak? It would be exactly like Bitcoin, with confirmations and all that, but with no mining and with an infinite supply.
Just imagine a separate downloadable client with a BTC address that would keep the received bitcoins in it's protocol (hell knows how, but it doesn't sound impossible) and provide you with a corresponding (at the then-current exchange rate) number of "coins", each of which you can always "cash out", again within the client, for $1 worth of Bitcoin. Whenever you cash out, you get paid automatically in Bitcoin at the current BTC/USD exchange rate, so you end up receiving the same exact money you brought in.
I could see this working flawlessly when the BTC appreciates, but when it depreciates there would be a deficit of BTC in the system. Here's an example:
John has 1 BTC (current price $100) and buys 100 Virtual USD coins with it. In the meantime, the BTC appreciates to $200 let's say, and when he (or anybody else, really) "cashes out" to Bitcoin, they receive 0.5 BTC, with half of the Bitcoin staying in the system.
And here's the counterexample, John has 1 BTC (current price $100) and buys 100 Virtual USD coins with it. In the meantime, the BTC depreciates to $50, and when he "cashes out" to Bitcoin, he must receive 2 BTC, when bringing in just 1 BTC. Is it possible that the first situation counterbalances the second one? In other words, can mass adoption solve this clusterfuck? I bet it can, if Bitcoin stays deflationary
Can a sustainable crypto-currency be built on the description above, and if yes, wouldn't this solve the volatility problem we have with Bitcoin, replacing it as a transaction currency and leaving it be a commodity, next to gold and silver?
Would be interesting to see what you guys think
Just imagine a separate downloadable client with a BTC address that would keep the received bitcoins in it's protocol (hell knows how, but it doesn't sound impossible) and provide you with a corresponding (at the then-current exchange rate) number of "coins", each of which you can always "cash out", again within the client, for $1 worth of Bitcoin. Whenever you cash out, you get paid automatically in Bitcoin at the current BTC/USD exchange rate, so you end up receiving the same exact money you brought in.
I could see this working flawlessly when the BTC appreciates, but when it depreciates there would be a deficit of BTC in the system. Here's an example:
John has 1 BTC (current price $100) and buys 100 Virtual USD coins with it. In the meantime, the BTC appreciates to $200 let's say, and when he (or anybody else, really) "cashes out" to Bitcoin, they receive 0.5 BTC, with half of the Bitcoin staying in the system.
And here's the counterexample, John has 1 BTC (current price $100) and buys 100 Virtual USD coins with it. In the meantime, the BTC depreciates to $50, and when he "cashes out" to Bitcoin, he must receive 2 BTC, when bringing in just 1 BTC. Is it possible that the first situation counterbalances the second one? In other words, can mass adoption solve this clusterfuck? I bet it can, if Bitcoin stays deflationary
Can a sustainable crypto-currency be built on the description above, and if yes, wouldn't this solve the volatility problem we have with Bitcoin, replacing it as a transaction currency and leaving it be a commodity, next to gold and silver?
Would be interesting to see what you guys think
Jump to: