alexanderisora wrote: ↑February 2nd, 2018, 5:53 am
Luit wrote: ↑February 1st, 2018, 6:03 pm
One of the disincentives of using bitcoins is its extreme volatility, which is due speculation. But the price of volatility has to be involuntarily paid by those who are using bitcoins simply for purchasing something whose value is in fiat currency.
We have had hardforks, such as between bicoins and bitcash. Would it be practially viable to also have a hardfork such as between bitcoins which are traded in exchanges, and bitcoins which are used to make purchases, whereby traded bitcoins can fluctuate in value, but bitcoins used in purchases have a stable value (such a hardfork would be somewhat analogous to the option that is offered between fixed interest rates and floating interest rates on a loan).
Hello, Luit! You've asked a very important question.
I guess the only way to decrease the volatility is to begin actively using Bitcoin. Once millions prefer BTC over USD and the total crypto market capacity grows from 500B to 5-10T, it will be much harder to manipulate the market and the price will become more stable. Today it's impossible because the Bitcoin network is slow and expensive. Hope Lightning Network will help though
If you create a fork you will need to somehow keep its value constant. But how do you do that without a central authority (Tether does, but it's because they control all the 4B USDT by themselves. It's not good.)
Hello Alexander Isora,
Thank you for your reply. Just when I was feeling like a crypto genius, you inform me that the idea of a stable crypto currency is already utilized by Tether! Upon reading about Tether, however, I learn that it has run into some controversies ("Why Tether's Collapse Would Be Bad for Cryptocurrencies
https://www.wired.com/story/why-tethers ... nsiteshare ). Besides, Tether is also a traded currency, although pegged to the dollar and supposedly backed by the dollar.
I am wondering how to restore the original purpose of Bitcoin, which is privacy of transaction and freedom from a central authority - a purpose which got hijacked by hyperspeculative Bitcoin trading, and which is now threatening the very future of Bitcoin as a crypto currency. There could be two ways in which Bitcoin could regain its original purpose. One scenario is that the collapse of Bitcoin value becomes terminal, so that it is no longer attractive as a speculative trading currency, and therefore it once again begins to be used primarily as a transactional currency to make purchases.
If on the other hand, the speculative craze of Bitcoins revives, then the only option seems to be is to have a hard fork and create a crypto currency that is not traded, and is transacted purely to make purchases. In other words, this type of Bitcoin works like a token. When I buy Bitcoin tokens - let's call them Bittokens - with dollars from an exchange, whose sole purpose would be to convert dollars into fixed amount of Bittokens, and then I use the Bittokens to buy an item from a seller, and the seller then redeems the Bittokens from a similar exchange which converts back the Bittokens to the fixed amount of dollars.
Re-establishing Bitcoin as an attractive payment option is the only way to drive greater adoption of Bitcoin, rather than the greed of the Bitcoin gold rush of speculation, which is having the opposite effect of driving away potential adopters because of its hypervolatility.
So time to seriously explore a hard fork between Bitcoin and Bittoken.