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It sounds like what you're describing is replacing the functional (read: relatively stable inflation-wise) swiss franc with... ? Assuming you implemented a POW

It sounds like what you're describing is replacing the functional (read: relatively stable inflation-wise) swiss franc with... ? Assuming you implemented a POW blockchain-based, decentralized (anyone can download and run a node), virtual currency, this would remove control over the supply and generation of the currency from the Swiss National Bank (fiscal and monetary policy experts) and give it to...Chinese cryptocurrency miners + whatever group of developers Switzerland decides to put in charge of maintaining and upgrading the swiss blockchain? What your friend is referring to is actually an idealized economic concept, the "Stablecoin" - one that is pegged to the exact right basket of goods, services, and semi-finished industrial products that it experiences little to no inflation/deflation and can be counted on as a store of value. All countries are or should be trying to create a Stablecoin relative to their own economies - allowing private citizens to assume their $5,000 USD will be able to buy roughly the same amount of goods and services in, say 6 months. All this to say...the Swiss have already created a Stablecoin for their economy...the franc. There is no reason to break up and decentralize an organization that is competently managing a currency. It only makes sense in cases (such as Venezuela) where the central authority is doing a terrible job of managing their currency, and is nowhere near achieving "Stablecoin" status. Or for markets where there is no accepted "Stablecoin" because they are illegal/no enforcement mechanism to honor the transaction (e.g. you can't bring a lawsuit in a US court against a drug dealer if he takes your USD and sells you bad drugs).

ghthor 9y ago
There is no reason the governance needs to change, they could still create a distribed mined coin and maintain goverance over the issue and destruction of tokens to maintain stable trading values.
- roymurdock 9y ago
  Wrong...if you create a distributed mined coin, you're giving power to the miners. You can try and push updates (say from version 1 to version 2) to the nodes, but if the miners choose to ignore those updates, they can hard fork the network and run it according to a past version, or their own version, essentially creating a derivative currency. This has happened to Bitcoin - see bcash, bitcoin gold, bitcoinX, etc. Decentralizing control by definition gives power to all of the nodes in the network, requiring their buy-in to conduct any type of "monetary policy" by changing the source code and rolling out an upgraded application. Any changes that could increase the hash rate, increase the max number of tokens, "destroy" transactions, rollback to a certain state, etc. would require miner cooperation. Whereas right now central banks can just "create" liquidity by tweaking monetary policy without needing the banks and populace to approve and agree to these changes.
  - gcb0 9y ago
    the miners can't control what's legal
    - roymurdock 9y ago
      Ok so if you’re going to send inspectors and police out to the ASIC farms to verify compliance and register that miner as a “chartered” miner running the right software...why change the system at all? That’s how it works with banks under the current federal reserve system in the US and defeats the whole point of decentralization
      - gcb0 9y ago
        you missed the point. miners can do whatever they want with currency. but ultimately government control how you translate that into goods, land, and how those things are taxed.
dreit1 9y ago
Pick a consortium style chain instead? dBFT or dPOS would be great for a national, distributed currency which a government still exerts a great amount of influence over
kosmet 9y ago
If any country wants to have a stable coin, they can choose US dollar or Swiss Franc as its currency. There are already some countries doing that. Hence, there is no need for a crypto currency for a stable coin. The downside is that you cannot control the monetary policy of your of own country. You cannot pump money according to the economic situation. Look at the eurozone, for example, Germany wants to increase rates -hence increase the value of Euro- whereas Greece is still struggling. Leaving your currency to somebody else’s decisions may not be a good idea.
- gilj 9y ago
  Just a small off-topic comment: the Swiss Franc is not as stable as you think. For example, it used to be pegged (as in, CHF 1 was supposed to be worth EUR 1.2), but in recent history the Swiss Central Bank decided to unpeg the CHF to EUR, seemingly out of the blue. Some reading: - https://www.economist.com/blogs/economist-explains/2015/01/economist-explains-13 https://www.economist.com/blogs/economist-explains/2015/01/e... - https://www.reuters.com/article/us-swiss-franc-shock/three-years-on-from-currency-shock-swiss-central-bank-cant-get-back-to-normal-idUSKBN1F30FQ https://www.reuters.com/article/us-swiss-franc-shock/three-y...
  - mseebach 9y ago
    Yes... But since we're off-topic, running with the thread for a bit, the kind of upset caused by the euro/franc un-peg is entirely inside the boundaries of "stable" in the context of the kind of country for which just adopting another nations currency is an attractive choice.

ghthor 9y ago

There is no reason the governance needs to change, they could still create a distribed mined coin and maintain goverance over the issue and destruction of tokens to maintain stable trading values.

roymurdock 9y ago
Wrong...if you create a distributed mined coin, you're giving power to the miners. You can try and push updates (say from version 1 to version 2) to the nodes, but if the miners choose to ignore those updates, they can hard fork the network and run it according to a past version, or their own version, essentially creating a derivative currency. This has happened to Bitcoin - see bcash, bitcoin gold, bitcoinX, etc. Decentralizing control by definition gives power to all of the nodes in the network, requiring their buy-in to conduct any type of "monetary policy" by changing the source code and rolling out an upgraded application. Any changes that could increase the hash rate, increase the max number of tokens, "destroy" transactions, rollback to a certain state, etc. would require miner cooperation. Whereas right now central banks can just "create" liquidity by tweaking monetary policy without needing the banks and populace to approve and agree to these changes.
- gcb0 9y ago
  the miners can't control what's legal
  - roymurdock 9y ago
    Ok so if you’re going to send inspectors and police out to the ASIC farms to verify compliance and register that miner as a “chartered” miner running the right software...why change the system at all? That’s how it works with banks under the current federal reserve system in the US and defeats the whole point of decentralization
    - gcb0 9y ago
      you missed the point. miners can do whatever they want with currency. but ultimately government control how you translate that into goods, land, and how those things are taxed.

dreit1 9y ago

Pick a consortium style chain instead? dBFT or dPOS would be great for a national, distributed currency which a government still exerts a great amount of influence over

kosmet 9y ago

If any country wants to have a stable coin, they can choose US dollar or Swiss Franc as its currency. There are already some countries doing that. Hence, there is no need for a crypto currency for a stable coin. The downside is that you cannot control the monetary policy of your of own country. You cannot pump money according to the economic situation. Look at the eurozone, for example, Germany wants to increase rates -hence increase the value of Euro- whereas Greece is still struggling. Leaving your currency to somebody else’s decisions may not be a good idea.

gilj 9y ago
Just a small off-topic comment: the Swiss Franc is not as stable as you think. For example, it used to be pegged (as in, CHF 1 was supposed to be worth EUR 1.2), but in recent history the Swiss Central Bank decided to unpeg the CHF to EUR, seemingly out of the blue. Some reading: - https://www.economist.com/blogs/economist-explains/2015/01/economist-explains-13 https://www.economist.com/blogs/economist-explains/2015/01/e... - https://www.reuters.com/article/us-swiss-franc-shock/three-years-on-from-currency-shock-swiss-central-bank-cant-get-back-to-normal-idUSKBN1F30FQ https://www.reuters.com/article/us-swiss-franc-shock/three-y...
- mseebach 9y ago
  Yes... But since we're off-topic, running with the thread for a bit, the kind of upset caused by the euro/franc un-peg is entirely inside the boundaries of "stable" in the context of the kind of country for which just adopting another nations currency is an attractive choice.