Basecoin: A Robust, Price-Stable Cryptocurrency with an Algorithmic Central Bank | Hacker News Reader

Basecoin: A Robust, Price-Stable Cryptocurrency with an Algorithmic Central Bank

getbasecoin.com

16 pointsxwvvvvwx16 comments

I 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?

So 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?)

One problem with cyrptocurancy is its decentralized model and instability; that is why institutions are more interested in Ripple and similar solutions.

Right 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.

Except that's not true anymore. The new tax plan will tax crypto-to-crypto transactions.

Only in the US.

Really 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.

I 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-pr...

I specifically mentioned BaseCoin as being a reasonable and macroeconomically valid currency.

> 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.

Cryptocurrencies (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.

Why pegged to the dollar? Seems like a fatal flaw.

The point is that it's stable relative to the most used and trusted currency on the planet.

So why not just hold dollars?

I 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.

A "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.

Just 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.

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