Founder of block chain company tries to convince you that blockchain is digital gold . That block chain scarcity better than the gold standard
Likely knowing full well that the value of promises backed by gold would still have you know value. Promises backed by hashing have no value in the event that the currency fails
I'm actually trying to convince people that, if we accept the premise that blockchain technology can create digital gold (as the market has, to the tune of hundreds of billions of dollars) then we should harness that digital gold to protect the value of the money that everyone already owns, rather than setting the world on fire by launching new currencies that function like pyramid schemes.
While noble, your digital gold is worse than usd not being fully backed by gold though. There is no intrinsic value in a database of hashes in the event that a currentcy fails. This solution is as much a fiat solution, if not more so than usd. The gold standard was as much if not more about securing the value of money as it was about controlling inflation as a result of over printing.
There's two nuances I would respectfully suggest that you're overlooking.
First, KRNC is designed to be employed as a supplement to USD. Most transactions would be executed with both USD and a corresponding blockchain asset. Technically, this is a digital analogue of the "symetallic standard", in which base money is comprised of both gold and silver in a specified ratio. The point is risk diversification: if fiat money implodes, or if crypto fails, you aren't wiped out.
Second, the concept of "intrinsic value" is misleading/confused when it comes to money. Things that trade at their consumption/production value are not monetized. Treating something as money involves attaching symbolic value to it: accepting it as proof of goods or services rendered in the past, and as a token that can be used to acquire goods or services in the future. Even gold would lose most of its value if it were suddenly priced based only on demand for use in industrial applications.
Money has always been valuable because everyone else treats it as money, whatever it is. It's a Schelling point that enables abstracted barter. Nothing less, nothing more.
> But it's also designed to work like a pyramid scheme. Most of the Bitcoin that will ever exist is already in the hands of a small group of early adopters.
What if Bitcoin were superseded by a cryptocurrency with a linear emission (i.e. a constant block reward)? Would that no longer be a pyramid scheme?
> everyone who owns U.S. Dollars will become poorer.
You mean everyone who owns dollars but no bitcoin.
What money is going to be fully reserved? Base money or credit money or both? What happens to new credit money? How do you keep the blockchain based currency from trading at a different value, e.g. me not believing in it selling USDf for real USD? (All not answered in F.A.Q..)
Thanks for the questions. I'll make sure to expand the FAQ when I get a chance.
1. The USD that you can use to unlock USDf (forked dollars/digital gold) is limited to deposits at commercial banks and credit unions. The public does not have access to electronic base money, so it's not included.
2. The quantity of USDf you can unlock is based on your historic bank balances, as verified during a defined window in the past. New credit money created after that point in time doesn't affect those past balances. To the extent that the owners of new USD wish to acquire weight for them, they'd need to purchase USDf, increasing its value. That is sort of the whole point: if governments keep inflating their money, the "forked" version with guaranteed scarcity will gradually increase in value.
3. USDf will trade at a different value than USD. At first, a much lower value. The idea is for them to be employed in a hybrid unit of account, USDw, where 1 USDw = 1 USD + 1 USDf.
A crypto-weighted dollar (i.e., USDw) will trade at a premium over a USD, since it is a USD + cryptographic weight. Think of it like a stablecoin that also comes with Bitcoin-like inflation protection. However, it's also possible to use USDf as an independent asset, and that will be convenient in use cases where transferring USD on existing payment rails isn't practical.
I would argue that smart savers at the moment are saving in cash in a safe. They would not get any USDf, right? So USDf is for the less informed. Are you expecting them to actively go through an unlocking process? Or will their banks do it based on public demand somehow? How is demand going to happen without people using it? Why would people use it if they don't have an advantage?
That is precisely the problem we're trying to solve: allowing the public to take advantage of blockchain-based digital scarcity without anyone being forced to invest in speculative assets.