Topic: What do you think? Bitcoin's RGB network and national currencies - page 2. (Read 400 times)
I think it will be very difficult to make bitcoin as an international currency because right now not all countries support the use of bitcoin, many countries actually forbid their people to use bitcoin and even using bitcoin is considered an unlawful act, besides all countries have internet access and infrastructure needed to be able to use bitcoin.
I don't think this will be possible. The thing here is that there is no country that will be accepting bitcoin as their national currency or crypto currency. Decentralization, volatility, and fees could affect the economy. That is fine if that is just a way to gradually adopt bitcoin but I don't think bitcoin will be more than an alternate payment method, or an investment.
it does not make sense to use two currencies at the same time. I believe that btc has to be implemented as the only currency, connecting several countries.
I think the implementation is too difficult. And besides, how to give people these very small amounts of money with current transaction fees? And the volatility is just too high to sustain a normal economy on Bitcoin. But boosting adoption can be easier, even though riskier.
1. Print more national fiat, pay out the loans your country took, raise salaries and scholarships, etc.
2. The national currency will become less and less valued as you do that.
3. Tell people about Bitcoin and how it's not susceptible to inflation. Accept payments in Bitcoin.
4. As fiat goes down, people will naturally invest in the safer thing, which at that time will be Bitcoin.
This list doesn't solve the issues of micro-transactions, of course, but this can boost adoption, even though in a very risky way.
1. Print more national fiat, pay out the loans your country took, raise salaries and scholarships, etc.
2. The national currency will become less and less valued as you do that.
3. Tell people about Bitcoin and how it's not susceptible to inflation. Accept payments in Bitcoin.
4. As fiat goes down, people will naturally invest in the safer thing, which at that time will be Bitcoin.
This list doesn't solve the issues of micro-transactions, of course, but this can boost adoption, even though in a very risky way.
No state will ever take any measures to transfer their national money into Bitcoins or another decentralized cryptocurrency. This would mean the loss of its own monetary system, and with it the loss of its statehood. As long as there are states with their own financial and other interests, until then they will have their own national currency. Only when states combine their financial resources, as we see in the example of the European Union, only then can states temporarily refuse national money. Therefore, to fantasize about what can not be in practice, meaningless.
All of this is assuming cooperation with the nation whose currency you are replacing. They would need to be able to collect taxes, fines, pay for things with this currency.
Also, it would not be necessary for all of the money to be reserved up front as a colored coin. An exchange or the government service could specify the addresses they will use as passthroughs to colored coins and as people convert to bitcoin the colored coins grow until they reach the threshold.
Consider a country like Panama which has no central bank (and whose banks were just put on the gray list so they cannot do international wire transfers), they could easily do the transition without disrupting any powerful organization. The long term benefit is a more valuable currency that has more features than all other currencies while being able to compete globally.
Going this route allows several years of transition which does require a central peg at start but is guaranteed to leave that peg once the value reaches a certain point.
Also, it would not be necessary for all of the money to be reserved up front as a colored coin. An exchange or the government service could specify the addresses they will use as passthroughs to colored coins and as people convert to bitcoin the colored coins grow until they reach the threshold.
Consider a country like Panama which has no central bank (and whose banks were just put on the gray list so they cannot do international wire transfers), they could easily do the transition without disrupting any powerful organization. The long term benefit is a more valuable currency that has more features than all other currencies while being able to compete globally.
Going this route allows several years of transition which does require a central peg at start but is guaranteed to leave that peg once the value reaches a certain point.
1. Why would any government do this or allow it to happen?
2. Who in their right mind would give up the value of underlying Bitcoin just to give people the ability to use Bitcoin's network for these "stablecoins"?
3. How would you enforce the use of colored coins as colored coins and not as bitcoins? As far as Bitcoin's protocol is concerned, all coins are equal, it doesn't know anything about colored coins.
2. Who in their right mind would give up the value of underlying Bitcoin just to give people the ability to use Bitcoin's network for these "stablecoins"?
3. How would you enforce the use of colored coins as colored coins and not as bitcoins? As far as Bitcoin's protocol is concerned, all coins are equal, it doesn't know anything about colored coins.
This was extremely confusing and hard to understand, even the TL&DR, lol.
This in itself is unfeasible, in my opinion. The extent of investment that this requires is extremely large, and I doubt anyone with that kind of capital, looking to put a fiat currency on the blockchain will look at colored coins as a viable option to digitize their economy.
So, who will be issuing it?
Why would anyone trust that whoever issuing it will back the value of these colored coins, since they are initially pegged to a fiat value, before they "equal the smallest currency denomination"?
Quote
Let's say that country X has a total of $100 billion of wealth in its own currency. To have each penny equal to one satoshi you would need 100,000 BTC set aside as colored coins for this nation (however that is done, a big national push, wealthy group, whichever).
This in itself is unfeasible, in my opinion. The extent of investment that this requires is extremely large, and I doubt anyone with that kind of capital, looking to put a fiat currency on the blockchain will look at colored coins as a viable option to digitize their economy.
So, who will be issuing it?
Why would anyone trust that whoever issuing it will back the value of these colored coins, since they are initially pegged to a fiat value, before they "equal the smallest currency denomination"?
I have been doing some thinking on how one would gradually convert a national currency to bitcoins.
The idea being that colored coins are used to peg the currency to the national currency for a specific amount of satoshis.
The amount of satoshis would need to equal the amount that the specific nation could handle as the smallest value that can be used as a currency.
Let's say that country X has a total of $100 billion of wealth in its own currency. To have each penny equal to one satoshi you would need 100,000 BTC set aside as colored coins for this nation (however that is done, a big national push, wealthy group, whichever).
For simplicity let's say the current BTC price is $10k/BTC. $1 billion would be needed to set this up.
Each colored satoshi will be given the value of .001 cents at the current conversion rate, and follow the rate of the nation's currency either through some sort of smart contract or centrally controlled ("trusted" sources) method.
People then use these colored coins in their day to day transactions, setting up payment terminals, lightning network payments, etc. It's just a new payment method with their same currency using a back end network that they need not understand.
As the bitcoin price rises from $10k/BTC to $1 million/BTC, their satoshis are now equal to one penny.
It is at this point that the moniker of their old currency is dropped and they use the satoshi as the smallest denomination, 100 satoshi as their main currency. They can now interact with this currency with the full Bitcoin network.
It may take years, but the adoption of this method for the nation would push that bitcoin price toward that $1 million/BTC and the same approach can be done for other nations.
TL;DR Smallest currency denomination is pegged to colored satoshis until one satoshi equals the smallest currency denomination and it is no longer colored.
Thoughts?
The idea being that colored coins are used to peg the currency to the national currency for a specific amount of satoshis.
The amount of satoshis would need to equal the amount that the specific nation could handle as the smallest value that can be used as a currency.
Let's say that country X has a total of $100 billion of wealth in its own currency. To have each penny equal to one satoshi you would need 100,000 BTC set aside as colored coins for this nation (however that is done, a big national push, wealthy group, whichever).
For simplicity let's say the current BTC price is $10k/BTC. $1 billion would be needed to set this up.
Each colored satoshi will be given the value of .001 cents at the current conversion rate, and follow the rate of the nation's currency either through some sort of smart contract or centrally controlled ("trusted" sources) method.
People then use these colored coins in their day to day transactions, setting up payment terminals, lightning network payments, etc. It's just a new payment method with their same currency using a back end network that they need not understand.
As the bitcoin price rises from $10k/BTC to $1 million/BTC, their satoshis are now equal to one penny.
It is at this point that the moniker of their old currency is dropped and they use the satoshi as the smallest denomination, 100 satoshi as their main currency. They can now interact with this currency with the full Bitcoin network.
It may take years, but the adoption of this method for the nation would push that bitcoin price toward that $1 million/BTC and the same approach can be done for other nations.
TL;DR Smallest currency denomination is pegged to colored satoshis until one satoshi equals the smallest currency denomination and it is no longer colored.
Thoughts?
Jump to: