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How would you propose making bitcoin "have stable value"?

by zodiac 9y ago

wmf 9y ago
https://blog.ethereum.org/2014/11/11/search-stable-cryptocurrency/ https://blog.ethereum.org/2014/11/11/search-stable-cryptocur...
- zodiac 9y ago
  I'm really interested in the stablecoin space but I don't think it's realistic to expect bitcoin to have started out as such. Firstly bitcoin was already testing some unknown assumptions (mainly "is our PoW scheme secure and scalable?") and it would be too confounding to also test "is our chosen stability mechanism effective?". Secondly none of the solutions Vitalik mentioned are easy at all; you need decentralized measurement, and all the solutions he presented have problems. Broadly speaking, if it were really easy to create a stablecoin - so easy that you think Bitcoin could have started out as one - a good one should have existed by now, but there's no good one so far. Thirdly, all of Vitalik's solutions require a volatile coin, which would presumably have increased in market cap over time and be subject to boom-bust cycles, all of which you object to. I also think the only approach that would lead to an effective stablecoin (ie one with a good peg) is one that uses other cryptocurrencies, external to the stablecoin, as collateral (eg MKR's approach), and that requires things like bitcoin to exist.
  - wmf 9y ago
    It seems like some variant of a bounded estimator would have dramatically reduced volatility without the complexity of two currencies.
    - zodiac 9y ago
      And yet, I'm not aware on any current cryptocurrencies that implement bounded estimator-based stabilization - not trying to be snarky, but stablecoins will indeed be pretty useful, if you think bounded estimator-based inflation would be "good enough" for stabilization, fork bitcoin (or build it on top of ethereum, idk if it's possible) and you'd have produced something valuable
- dwaltrip 9y ago
  This is highly theoretical research. It's not surprising Bitcoin didn't include something like that, on top of everything else.
empath75 9y ago
What if we had a centralized institution, like say, a bank, that controlled the supply of coins.

How would you propose making bitcoin "have stable value"?

by zodiac 9y ago

How would you propose making bitcoin "have stable value"?

wmf 9y ago

https://blog.ethereum.org/2014/11/11/search-stable-cryptocurrency/ https://blog.ethereum.org/2014/11/11/search-stable-cryptocur...

zodiac 9y ago
I'm really interested in the stablecoin space but I don't think it's realistic to expect bitcoin to have started out as such. Firstly bitcoin was already testing some unknown assumptions (mainly "is our PoW scheme secure and scalable?") and it would be too confounding to also test "is our chosen stability mechanism effective?". Secondly none of the solutions Vitalik mentioned are easy at all; you need decentralized measurement, and all the solutions he presented have problems. Broadly speaking, if it were really easy to create a stablecoin - so easy that you think Bitcoin could have started out as one - a good one should have existed by now, but there's no good one so far. Thirdly, all of Vitalik's solutions require a volatile coin, which would presumably have increased in market cap over time and be subject to boom-bust cycles, all of which you object to. I also think the only approach that would lead to an effective stablecoin (ie one with a good peg) is one that uses other cryptocurrencies, external to the stablecoin, as collateral (eg MKR's approach), and that requires things like bitcoin to exist.
- wmf 9y ago
  It seems like some variant of a bounded estimator would have dramatically reduced volatility without the complexity of two currencies.
  - zodiac 9y ago
    And yet, I'm not aware on any current cryptocurrencies that implement bounded estimator-based stabilization - not trying to be snarky, but stablecoins will indeed be pretty useful, if you think bounded estimator-based inflation would be "good enough" for stabilization, fork bitcoin (or build it on top of ethereum, idk if it's possible) and you'd have produced something valuable
dwaltrip 9y ago
This is highly theoretical research. It's not surprising Bitcoin didn't include something like that, on top of everything else.

empath75 9y ago

What if we had a centralized institution, like say, a bank, that controlled the supply of coins.