This volitilty can be solved within bitcoin itself via the adoption of “coloured coins”. Essentially, this means credible institutions can issue “MyBankUSDcoins” for example, with coins with a certain history being declared redeemable at a specified rate via whatever banking mechanism that kind of company does. Similarly pecunix could offer “Pecunix coins” which it backs with gold (its normal business model). Then transactions can be made in gold, or USD, or AUD via the same technology (and distributed security structure) that bitcoin uses.
Hm. Sounds like colored coins have all the advantages of Bitcoin, plus lack of volatility. So if they existed then would we ditch regular Bitcoins for them? How much software would need to be changed in order to implement colored coins?
Ultimately, I suspect that Bitcoin is a product that no one really wants that bad, and ultimately the interest in them is mostly from speculation… if there’s any interest in using them as an actual currency, it’s liable to be faked interest from people who have large bitcoin balances and would profit if that happened.
Ultimately, I suspect that Bitcoin is a product that no one really wants that bad
Well there was a lot of interest in Bitcoins in southern Europe following the Cyprus, bank account confiscations. Basically, if people are treating putting money into Bitcoins as an alternative to putting it in banks.
Hm. Sounds like colored coins have all the advantages of Bitcoin, plus lack of volatility.
Alas no. They have most of the advantages of bitcoin since they are still bitcoin in full. However, whatever additional value the ‘color’ grants to the coin over the base worth os a BTC is based on trust in a specific agent. They are nothing more than a promise from a supplier to redeem the coins into another form of value at some time in the future. It is a trade off. Convenience and stability purchased by requiring trust.
So if they existed then would we ditch regular Bitcoins for them?
The regular coins are still what are required to produce coloured coins (the name is really good analogy). Coloured coins being used more would seem to lower the expected price of uncoloured bitcoin, but they couldn’t make uncouloured coins worthless since they themselves entail a demand for them.
How much software would need to be changed in order to implement colored coins?
It would mean taking the existing ‘beta’ implementations, making them stable and having people start to use them. Merchants accepting them automatically (and being able to tell they are worth more than uncouloured coins) would also require making improvements to whatever software it is that they use now.
Hm. Sounds like colored coins have all the advantages of Bitcoin, plus lack of volatility. So if they existed then would we ditch regular Bitcoins for them? How much software would need to be changed in order to implement colored coins?
Ultimately, I suspect that Bitcoin is a product that no one really wants that bad, and ultimately the interest in them is mostly from speculation… if there’s any interest in using them as an actual currency, it’s liable to be faked interest from people who have large bitcoin balances and would profit if that happened.
Well there was a lot of interest in Bitcoins in southern Europe following the Cyprus, bank account confiscations. Basically, if people are treating putting money into Bitcoins as an alternative to putting it in banks.
Alas no. They have most of the advantages of bitcoin since they are still bitcoin in full. However, whatever additional value the ‘color’ grants to the coin over the base worth os a BTC is based on trust in a specific agent. They are nothing more than a promise from a supplier to redeem the coins into another form of value at some time in the future. It is a trade off. Convenience and stability purchased by requiring trust.
The regular coins are still what are required to produce coloured coins (the name is really good analogy). Coloured coins being used more would seem to lower the expected price of uncoloured bitcoin, but they couldn’t make uncouloured coins worthless since they themselves entail a demand for them.
It would mean taking the existing ‘beta’ implementations, making them stable and having people start to use them. Merchants accepting them automatically (and being able to tell they are worth more than uncouloured coins) would also require making improvements to whatever software it is that they use now.