Should we have a SafeDollar and SafeEuro?


#1

NuBits is a cryptocurrency that has managed to stay at a valuation of pretty much exactly 1$ per NuBit since 22 October. Look at the 90 day chart:

You can read up on the concept of ‘stable-coins’ here:

Especially read the part under BitAssets. I definitely believe MaidSafe should take an interest in this topic. Perhaps we can find a way to improve this (admittedly experimental) concept by combining or substituting parts of it with SAFE’s features?


Currency stabilizing DAC's
#2

Why would you need a fiat currency? Obvious answer would be for stabilization, but these currencies have flaws (government&moneyprinting etc). There is only one (two pieces) piece in the puzzle that’s missing. When Shapeshift.io adds, Nubits, BitUSD and Tether.to you’ll have enough options to exchange your Safecoins for these fiat pegged crypto’s. You’ll even have the choice, which you trust more…


#3

No need for fiat… If you want fiat trade coins on your own there will be plenty of < vectors > with which you could accomplish such a thing


#4

There are a lot of reasons to want to have these directly on SAFE as well. NuBits is blockchain technology which involves transaction fees and a public ledger, we’ll have neither on SAFE. If NuBits and Shapeshift.io usage would become common practice in the SAFE community, we’d be relying on two external projects for this sort of thing.

If we’d have these on SAFE, people could buy large amounts of SafeDollars for example and exchange a little bit of it for SafeCoin on the decentralized SAFE exchange whenever they want to pay for a service. That way they can keep savings in SAFE while avoiding SafeCoin’s volatility.

It also allows people to exchange value directly in dollars/euros over the SAFE network without having to use SafeCoin as an intermediary.

A lot of smart people I discussed cryptocurrencies with in the past year gave volatility as the number one reason why they didn’t believe in them and didn’t plan on using them. I know we don’t like fiat here for valid reasons, but the world population and economy is still using them.


#5

Besides, the SafeDollar/Euro would be issued by SafeCoin holders and collaterized by SafeCoins:

Vol-coins (SafeCoin) are an actual currency; users can have a zero or positive balance of them. Stable-coins (SafeDollars) exist only in the form of contracts-for-difference (ie. every negative stable-coin (SafeDollar) is really a debt to someone else, collateralized by at least 2x the value in vol-coins (SafeCoin), and every positive stable-coin (SafeDollar) is the ownership of that debt).


#6

this is a while ago; much expanded since then :wink:


#7

To add to this, even companies like Overstock that accept payments in Bitcoin use a third party service to instantly convert Bitcoin to fiat to avoid cryptocurrency volatility. It would be beneficial to SAFE if companies would have no problem keeping value stored inside SAFE for longer periods of time.

Hell, that’s the point where they could start paying partners and employees through SAFE as well.


#8

I had the idea to place the privatekeys of cryptocurrencies in a Safecoin, bad idea. Is your idea to transform the Safecoin into SafeDollar? For instance if you want 1SafeDollar at current Safecoin price of 0.047481 you'll have to transform 21Safecoin to get it. Similair at current Bitcoin price of 377.27 you’ll have to transform 7945.70Safecoins to get 1SafeBitcoin.

It would be fun if you could do this, but the question is? Which exchange would you use to know the price of the 2 different currencies (Safecoin/Dollar, Safecoin/Bitcoin)? It would also mean that you don’t have the REAL asset, but merely a projection of it in your universe. Btw it looks like Supernet is already a solution for cryptocurrencies to talk with eachother and they also got you covered with fiat with coinamat. read more about Supernet

Totally agree

Let’s say that you used 21Safecoin to get a SafeDollar and the dollar would seize to exist. What would happen, is you would disconnect the 21Safecoins to get back individual coins instead of coins packed together.


#9

This is just my own point of view.

I’m very skeptical of pegging Safecoin to fiat currencies. Right now, everyone valuates Safecoin in fiat terms. We can pretend to peg it to Bitcoin which it’s really pegged to fiat.

  • Any person or entity exchanging a government currency WILL be subject to regulations, taxation, and control.
  • Governments are recklessly inflating while waging financial war with each other.
  • Fiat purchasing power is being diminished at an alarming rate.

IMHO, it is better for Safecoin’s “purchasing power” to rise opposite of fiat. What is the best way to make that happen?

  1. Accessibility. According to the updated system docs (Safecoin), when storage is added to the Network, more Safecoins become available. If new farmers can earn Safecoin by adding storage years later, then Safecoin will still be accessible. If you consider how people acquire fiat, they get a job and get paid. They don’t go to an exchange to buy fiat. If the same principle applied to Safecoin, it would be a stand alone currency within the SAFE economy.

  2. Exclusivity. This may be a hated word but it’s also a reality. If you have an unlimited amount of any currency but only one buys water when you’re thirsty, you’ll go for that one. The SAFE Network has an exclusive service that cannot be purchased with any other currency. PUT functionality. Just like the Petro dollar is exclusive to oil… for now, so is Safecoin on the SAFE Network.

  3. Productivity. As the Network grows with killer APPS, the demand for Safecoin will increase. This usually goes hand in hand with mass adoption. In order for Safecoin’s purchasing power to increase, we need an increasing amount of goods and services compared to the supply.

Example
1 token = 1 pizza. The store owner finds cheaper ways to make more pizzas. So he is able to accept 1 token for 2 pizzas. The purchasing power of that token doubled because of productivity.

Sorry for the long ramble. I know people will disagree and that is okay.


#10

No. Perhaps this clears it up a bit: https://nubits.com/about/white-paper

That’s not the proposal. SafeCoin wouldn’t be pegged to anything, would still have a fixed max supply, would still rise proportionally to the value of the SAFE network, and would still be the exclusive currency for network services.

The idea is to introduce for example a second SAFE currency that is pegged to the USD, which could be called a SafeDollar. This SafeDollar would be a “zero-total-supply currency (ie. each positive unit is matched by a corresponding negative unit)”. You can only have a negative balance in SafeDollars if it is backed by double the value in SafeCoin (collateral). If the value of your SafeDollar debt gets higher than 90% of your SafeCoin collateral (because SafeCoin dropped in value for whatever reason), then a “margin call” will be executed by the network, which means that the SafeCoin collateral will be transferred to the counterparty that holds the positive balance in SafeDollars (i.e. the owner of your debt) and your debt will be erased. The margin call makes it impossible to run away from your debt.

In other words, as a SafeCoin holder you can issue SafeDollars. When you do that, you take on yourself a SafeDollar debt, since SafeDollar is a zero-total-supply currency. This is profitable to do when you expect the SafeCoin value to rise compared to the Dollar value. The guy buying the issued SafeDollars is essentially betting that the SafeCoin value will fall (the fear for volatility) compared to the Dollar value. This is why it’s similar to a Contract for Difference:

There’s a lot more to say about this, but it’s probably best if you read the Ethereum blog on stable cryptocurrencies and the NuBits whitepaper I provided, I’m not an expert at this (yet).

As for this, such a SafeDollar wouldn’t be a government currency, it’d be a SAFE currency with a value maintained at 1$.

This wouldn’t hurt SafeCoin or the SAFE network at all. It would in fact make it profitable for SafeCoin holders to issue SafeDollars. The loss would be for the poor souls buying and/or holding SafeDollars, since the SafeDollar inflates together with the US Dollar.


#11

Thanks for the explanations.

If Safecoin is unaffected by SafeDollar or SafeEuro, then it doesn’t matter to me either way.


#12

Let me clarify this with an example where 1 SafeCoin = 1 US Dollar:

Let’s say you have 20 SafeCoins, which allows you to issue (sell) 10 SafeDollar. You receive 10 real US Dollars from the buyer, and you now have a -10 SafeDollar debt backed by your 20 SafeCoins as collateral. With those 10 US Dollars you received, you immediately buy 10 more SafeCoins.

A week later the exchange rate has changed to 1 SafeCoin = 2 US Dollar. You can now go to a SAFE exchange and spend 5 SafeCoins to buy 10 SafeDollar. Since your balance was -10 SafeDollar, your new SafeDollar balance is now 0, and your 20 SafeCoin collateral is returned to you. Because of the increase in value of SafeCoin since last week you only had to spend 5 SafeCoins to pay back your SafeDollar debt (with which you had bought 10 new SafeCoins).

That means you made a profit of 5 SafeCoins!

However, if the value of SafeCoin had fallen, you would have had to spend more SafeCoin to buy back your SafeDollar debt, which would have resulted in a netto loss. If you refused to buy back your SafeDollar debt, and if the value of that debt would have risen above 90% of your SafeCoin collateral, then the margin call would be executed by the network and you’d lose all your collateral. Since this happens at 90% you lose an extra 10% of your SafeCoins compared to when you would had voluntarily bought back your SafeDollar debt.


#13

I get it and understand, thanks. This is great for currency speculators. And if people really want, they will build this system. More power to them.


#14

I’m pretty sure support for at least the margin calls would have to be coded into the core of the SAFE network to get integrated fiat-pegged currencies into the SAFE network. There would also need to be a system for a fiat value feed. The Ethereum blog discusses several possibilities to realize that.

Anyway, I’m not proposing a concept that is worked out for 100%. I was hoping to first discuss the potential benefits for SAFE, and if there’s support from others then to discuss how such a system could best be implemented in SAFE. We don’t have a blockchain so things are a bit different (possibly better).


#15

But it would affect it through conflation if that were the name.


#16

I do not to speak for MaidSafe. But I think they are not in favor of derivative instruments. This article above gives us @dirvine’s view on the matter. If the developers intend for SAFE to be a cash only Network, then my goal is to make sure Safecoin increases in purchasing power. So that is my focus.

@Warren Yes, that would be a name. And that could be an issue. But I don’t think we will develop this any time soon. Discussions is always good though.


#17

Caution: Long opinion piece ahead


It’s my feeling that, this would have been the perfect escape pod for humanity had @dirvine had a significant no strings benefactor and the belief that it could actually work as a closed loop.

As it is, we have the best network available, but with an unpredictable exposure to the ‘International Monetary System’ (IMS)


I think it pays to have a little knowledge about what has come before and where, were at now.

Anyone that has looked into paper currencies, will have read that all of them have gone to zero at some point in their cycle…30 years average across the planet overall I think.

And of course when folk talk of ‘fiat’ they should realize that fiat can be, and has been, anything from sea shells to gold and silver i.e 'fiat is simply what government declares it to be, for the purpose of paying taxes.

Gold and silver as ‘fiat’ also moved towards zero over the course of their cycle, due to ‘coin clipping’ and a change in the precious metal content. Silver coinage was taken out of circulation as the commodity price of the metal exceeded face value.


But! the people must still have faith in that ‘fiat’ …and that’s what we have now in the current incarnation of ‘fiat’ …a 100% faith based currency i.e “it’s not worth the paper it’s not printed on”

And the big, but oh so simple kahuna that not many understand is, not only is current fiat 100% faith based, but also 100% debt based.


All money in circulation is borne from debt i.e there can be no money without debt!


That’s why in this world collectively there is over 100 Trillion dollars in debt outstanding. Who is going to pay back that debt? Aliens?

So the SAFEnetwork has exposure to 100 Trillion dollars of debt…and we want to play tricky dicky…and create SAFEdollars and SAFEeuros…lets not get ahead of ourselves I’d say to this.


…and talking about debt, it’s so insidious, do you realize when you get a mortgage from the bank, you are actually borrowing your own money and paying interest on it.

They assess you for the ability to repay over say 30 years…what this means in effect is that you are borrowing from your future, because they don’t actually use their money. Your signature gives the bank permission to create the ledger money on your behalf…from nothing. This the same process for countries when they issue bonds…the whole shebang is 100% ponzi, the greater fool, the cause of inflation and ever rising house prices.


So there you are, ledger money…it’s been around forever (6,000 years+) and at times was backed by 100% metal, then the % of metal required to insure the 100% ledger money, gradually reduced to 0% that we have today.

So when you hear some expert talk about ‘fractional reserve banking’ that’s what they are referring to. Once we got to 0% metal backing, we went to x% paper cash/ electronic ledger money backing, and now were at 0% of anything backing…sort of like a black hole that exists threateningly, but only if you know it’s there…maybe TV didn’t tell the people yet :slight_smile:

So actually there is not a Fractional Reserve System…it’s a Zero reserve system i.e there are no reserves backing the ‘money’ and virtually all money comes into existence when it is borrowed. Less borrowing, less money, deflation.

The only real money to an extent is coinage, which is issue by the state treasury and not the central bank (BIS system)

So now when we put ‘money’ into the bank in size, instead of interest, you get charged for the privilege i.e negative % interest…but it gets better.

In the 2008 meltdown aftermath, banks were ‘bailed out’ by governments i.e you (indirectly. But now you get to directly bail out the banks this time around via what is termed 'Bail in’s) It’s simple really, you see…you don’t have any money in the bank! you gave your money to the bank, it’s the banks money. They invest their money in the great ponzi in hope of a return.

When this 100 Trillion ponzi unwinds like a tight coiled spring, all banks will go into the red and will not be bailed out by governments. Instead they will use the deposits that you have given to them to balance the books…you have been ‘bailed in’ …get it? But they aren’t stealing your money really, in return for your ‘bail in’ you will receive a certain type of share in the bank…don’t worry be happy, you now have a share in a useless entity :wink:


So if you want to know why the cost of living continuously goes up, debts can never be re-paid whilst the planet is mercilessly plundered, looking no further than the money changers…after all they’ve enslaved the lot of us for thousands of years with this con (confidence trick) there’s that word again.


Anyway, this cant possibly go on,can it…this has to be the end of the road for the money changers and their ‘double entry’ ledger system. Well, may I introduce to you new and improved (infallible actually), ledger system "Triple entry’ ledger/accounting…with extra enslavement features built in.

What is this new improved system … Blockchain (or a variant thereof) yep…3D/Triple Entry Accounting ie a triangle, the unfinished pyramid gets capped.

I was scratching my head, thinking why is there so much corruption, outright theft, blowing bubbles, wanton money printing and subsequent purchasing of so much real stuff like land and buildings? Well if you were an insider and knew what what was coming as the Sting sang "when the world is running down, you get the best of what’s still around.

When we go to a 3D accounting system across all electronic systems…it will become impossible to steal anything without detection!


If you get this, it can only increase your ‘confidence’ in SAFEcoin…which is backed by faith and borne from nothing…but… backed by the worlds Internet 2.0.

Maybe 3.0 will be a closed loop with no fiat exposure?


Feel free to discuss if you feel there are inaccuracies in this post.


#18

Derivatives are not inherently bad.

Quoted from that link: “As the industry created even more complex number manipulations (derivatives, futures, bonds, triple A securities etc.)”

The fear is for manipulation, which is understandable. To manipulate the proposed system you’d have to manipulate the price feed, for example to trigger margin calls. If we can find a way to properly decentralize the feed (something similar to the ShellingCoin concept proposed by Vitalik perhaps) we can maybe make it practically impossible to manipulate.

I fail to see how the fact that the fiat monetary system is debt-based would threaten SAFE with SafeDollars/Euros on it. If the real USD and Euro would collapse the only losers would be holders of SafeDollars/Euros, and afterwards there would be no buyers for SafeDollars/Euros anymore so it’d become impossible for SafeCoin holders to issue them. The practice would fade away, leaving the SafeCoin holders who in the past issued SafeDollars/Euros with the profits of the fiat collapse.


#19

Maybe the concept of a SafeDollar is a weird idea because no Dollar is save. @chrisfostertv is right about fiat’s lifespan and it’s debt based EVIL.

Safecoin is the most valuable MONEY in our possession, because it’s indeed back by Internet 2.0. It’s total insanity that a Maidsafecoin is at it’s current price of $ 0.049742. If Internet 1.0 can get 3 billion people on board. How many people, devices and AI’s do you think that Internet 2.0 will get on board? I may be poor in fiat currency, BUT I FEEL AWFULLY RICH WITH MY SAFECOINS. We need to stop looking at the fiat price because it means totally nothing. If you could for instance power something like Facebook.com at the price of 1000Safecoin for 5 years then you’ll get the insight of what a Safecoin is really worth. We’ll see the real value of a Safecoin when we can host our services/laughter/stuff on it


#20

Mr Maloney is part of the Silver and Gold crowd, that believes we’ll go back to the monetary metals. I think Gold has always been important behind the curtain and may even become more so in the next chapter. But not for public use…it will remain the barbaric relic, at least in the west.

He seems to have embraced the Blockchain somewhat, so I left a comment regarding SAFE…well worth it, with views heading up to 3 million.