Again, I'm forced to ask: Regardless of whether or not it would be possible or practical, should we put together an altcoin that is resistant to this volatility? The only things worse than having one one printing press cranking out fiat paper and binary numbers without mercy is 77 printing presses doing so.
The fact that it's impossible makes this question basically irrelevant.
How on earth would you even create an altcoin that is "resistant" to USD price volatility?
The only altcoin that would resist volatility would be an altcoin that can't change hands!
Make supply match demand. Once buyers on an exchange became confident that reward coins for mining would not be issued until demand for the currency caught up (rather than running the printing presses endlessly, as with so many bitcoin clones), there's no more a rush for the door. As important, there are funds out there that would be invested if they felt that there was much less risk to short- medium- or long-term loss. Although holders of such an altcoin would only see a 0-1% increase each month, short term speculators would tend to stay away, in favor of those who put more value in for the long haul.
Like any central bank in the real world, what's needed is the certainty that the currency will not be arbitrarily devalued by endless overproduction of paper/coins.
I've got some nebulous ideas that you would need a kind of internal prediction market where people bet their existing coins either for inflation or deflation and the block-chain either grows or shrinks the money supply in the opposing direction. The trick is that the bets need to be self-fulfilling while also being denominated only in the coin itself which I don't know how to resolve. If your interested in trying to develop this idea PM me.
If the method of growing or shrinking the money supply involves adjusting the balance of all inputs proportionally, then nothing is actually solved because the exact same fiat market cap will just be spread over a different number of units that are proportionally in the same hands. That would in essence be exactly like arbitrarily talking about mBTC.
If the mechanism is variable mining block size, the remedy to volatility simply isn't fast enough to counteract the kind of volatility we see in cryptos in practice.
Also there would need to be some mechanism that incentivizes actually using the internal prediction market instead of simply trading for fiat outside of the blockchain.
I think designing around eliminating price volatility misses the boat with cryptos entirely, because pegging against fiat is not necessarily desirable. The endgame on cryptos is not to be pegged to fiat or anything else, it's the utility of the payment network displacing existing inefficient markets, and the fiat valuation is just a secondary consequence of that phenomenon.
