You probably heard that Bitcoin was called Money 2.0. I'm disagree and would rather call it Gold 2.0 and it explains why using Bitcoin in day-to-day market life adopted so slow. Exactly same would happen if we suddenly decide to use gold as a mean of payment within domination fiat currency. If you remember deceased e-Gold they initially implemented electronic gold gram but pretty quickly introduced fiat equivalents for the sake of convenience.
Proposed Bitfiat is a kind Money 1.5, electronic money with fiat pattern but backed by Bitcoin with the following features:
- Separate block chain formed for all world currencies in one network (multicurrency)
- Bitfiat address is prefixed with currency code and transactions possible only between same prefix addresses
- No mining, Bitfiat emitted by reserving Bitcoin
- Anyone can emit Bitfiat by transmitting certain amount of bitcoins to a reserve address
- Reserve address may be "private" or "public" (only originator can get reserve back or any other public member)
- As an option allow only "private" reserve to suppress Bitfiat speculation market
- Bitfiat emission confirmed by more than 50% Bitfiat network nodes, each node free to use any exchange rate. Therefore in order to get confirmed issuer must provide solid amount of Bitcoin as a reserve
- Withhold of Bitcoin reserve takes by destroying Bitfiat in the same amount previously emitted
Bitfiat can be used as a workable decentralized substitution for PayPal, Dwola, Webmoney, Perfectmoney and alike. A practical merchant solution halfway between existing fiat realm and future Bitcoin world.