ugh i know i just couldnt resist seeing how y'all would respond to the idea of the Bitcoin bank. Well, granted they may want to be a 3rd party to all transactions but if the consumers really want a cryptocurrency they could set up a system where it's all pseudonymous once the money gets in.
Basically what I'm describing is Bitcoin but instead the exchanges are banks and without mining. The whole system would be pretty much the same beyond that.
I basically think that mining was a trick used to help adoption, but it's a big part of the destabilization of the currency. Forget banks if you don't like the idea (I suggested them because deposits could be FDIC-insured). What if the ecosystem started from scratch and Gox just inputted money 1-to-1? $1000 = 1 BTC, and then if you need to print more BTC, just put more money in the bank & raise the cap.
> I basically think that mining was a trick used to help adoption
Think again - mining is closely tied to a "proof of work", a guarantee that the coins are not created out of thin air. That property is lacking from the system you are suggesting. How do you prove that your "DollarPegCoin" is actually backed by anything?
I agree that this has caused an inelastic supply and wild price fluctuations, and these will continue, but it serves an additional purpose besides being an adoption incentive.
Basically what I'm describing is Bitcoin but instead the exchanges are banks and without mining. The whole system would be pretty much the same beyond that.
I basically think that mining was a trick used to help adoption, but it's a big part of the destabilization of the currency. Forget banks if you don't like the idea (I suggested them because deposits could be FDIC-insured). What if the ecosystem started from scratch and Gox just inputted money 1-to-1? $1000 = 1 BTC, and then if you need to print more BTC, just put more money in the bank & raise the cap.