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Basecoin: A Robust, Price-Stable Cryptocurrency with an Algorithmic Central Bank
- xwvvvvwx 9y agoReally interested in this. There are very good reasons we moved off the gold standard, and I've never seen a really convincing argument why we would change our minds.
- qubex 9y agoI wrote this about the absurdity of bitcoin's (and other naive cryptocurrencies’) finite amount of money a while ago, and have posted it a few times in threads (so please forgive me if you have already seen it). I try to explain in layman's terms (I am a macroeconomist) why finite-supply (thus deflationary) and non-fractional-reserve-banking-enabling currencies are toxic to the economy. https://medium.com/@jamesjunghanns/my-0-00000173120-btc-a-practicing-orthodox-macroeconomists-unsolicited-views-on-bitcoin-543da352fc49?source=linkShare-229012a5fba0-1513957626 https://medium.com/@jamesjunghanns/my-0-00000173120-btc-a-pr... I specifically mentioned BaseCoin as being a reasonable and macroeconomically valid currency.
- mooneater 9y ago> absurdity of bitcoin's (and other naive cryptocurrencies’) finite amount of money Bitcoin can be seen as a middle finger to inflation, more than a basis for primary currency. If nothing else, it certainly as helped advance the conversation on the nature of money supply.
- qubex 9y agoCryptocurrencies (at least the first ones, those before BaseCoin) aren’t really currencies at all. They’re ’just’ clever decentralised ways of manufacturing scarcity in this day and age of infinitely copiable digita information.
- dreamdu5t 9y agoWhy pegged to the dollar? Seems like a fatal flaw.
- cantrip 9y agoThe point is that it's stable relative to the most used and trusted currency on the planet.
- dreamdu5t 9y agoSo why not just hold dollars?
- vannevar 9y agoI assume for the usual reasons argued in favor of cryptocurrency: anonymity and decentralization. But the exchange rate and contraction/expansion algorithms presumably must be consensus. And the more heuristics you constrain the system with at the start, the greater the likelihood of forks down the road.
- cantrip 9y agoA "stablecoin" allows traders to move in and out of cryptocurrency positions to a stable currency quickly, without converting to true USD, which is slow to process. It also allows the transfer of stable value (payments, remittances) on the blockchain, rather than transferring volatile currencies and converting them to USD, incurring the risk of price fluctuation and conversion fees. A stable coin is a very valuable asset to the ecosystem.
- xwvvvvwx 9y agoJust as something very stable to bootstrap the network. The paper also talks about pegging to a basket of good (e.g. CPI) as the end state if it ever ends up superseding the dollar.
- blueadept111 9y agoSo how does this coin make or save me money, to compensate for the risk of buying it and trusting the "algorithmic" central bank (which apparently has a tweakable algorithm, and therefore requires trust in the central overseer?)
- joelinuxyx 9y agoOne problem with cyrptocurancy is its decentralized model and instability; that is why institutions are more interested in Ripple and similar solutions.
- xwvvvvwx 9y agoRight now crypto traders sometimes sell to fiat to wait out a period of market volatility. Selling instead to the stable coin would mean they don't have any tax issues.
- mooneater 9y agoI love the concept of leapfrogging fiat by pegging to CPI in future. Avoid deflation of bitcoin and inflation of USD. Although then the game becomes (as it is now with CPI), who determines exactly what's in the CPI basket?