1/ Watching #btc volatility & thinking about current use cases, I finally appreciate why @VitalikButerin says it's important to make a StableCoin. Ppl should be able to store value w/o taking on all this currency risk.
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IMO any coin will be stable as soon it gets sufficient adoption. The dollar is stable even with QE because of the world adoption and demand. BRL is less stable in world terms b/c it's used solely in Brazil, but it's relatively stable inside Brazil despite inflationary policies.
Certainly a coin at full adoption will have more stable value. However, I question whether a (non-stablecoin) cryptocurrency will ever be as stable as USD. Won't demand shift among altcoins far more than among fiats (which each have a locked-in market)?
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Perhaps demand shift among alts could be dampened by a “basket of alts” coin, in analogy to a “basket of metals” dampening demand shift betw say gold & silver.
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I like it! The issue for backing a token w/ one or more commodity/fiat is the counterparty risk (who holds the reserves?). But a stablecoin contract that securely holds and automatedly trades altcoins would be a trustless reserve.
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In general I'm not sure how a network would securely hold private keys to accounts other networks, but it seems easy for an Ethereum contract to exchange/hold ERC20 tokens.
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Perhaps http://prism.exchange could be used for this. Use ETH contracts to hold a basket of alts in proportion to their market caps. Provides stability without traditional reserve-holder-counterparty risk. Result = a synthetic “stablecoin”?
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That's close to what I'm imagining. Market cap is nice since no rebalancing (important!). You would buy in/cash out using a full basket. Though I think vulnerability to exchange arbitrage or price-feed attacks is a serious concern.
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I was also thinking, rather than keeping a cap-weighted basket, you let people buy in/sell out with any altcoin; converting at a rate based on the current valuation of that coin relative to the reserve pool. But that's potentially even more vulnerable to arbitrage.
End of conversation
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As stable as the USD?? In 105 years it’s lost close to 90% of it’s value. Let’s not forget that fact when discussing this incredibly important topic. That being said, a stable store of value would be a blessing and hopefully we get there soon. Thank you!
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But yes, one usually is prohibited to use other money than the countrie's official money, which makes fiat more stable. But again, I believe that one to ten coins will survive in large scale and become much more stable and usable than now, maybe as stable as fiats.
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Maybe they will never be more stable than the dollar, but if they manage to be more stable than the Brazilian Real, they will benefit the majority of South Americans, which have weak currencies and inflationary governments.
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