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If you could create a new money from scratch what characteristics would it have? How would you improve it?

@a3c1a5ce: If I were to create a new currency from scratch, I would want it to have the following characteristics:

1. Decentralization: The currency should be decentralized, meaning that it is not controlled by any central authority or institution. This would help to promote transparency, security, and privacy.

2. Security: The currency should be secure and resistant to hacking and fraud. This could be achieved through the use of advanced encryption and other security measures.

3. Scalability: The currency should be able to scale to meet the demands of a global economy. This would require a robust and efficient infrastructure that can handle high transaction volumes.

4. Accessibility: The currency should be accessible to everyone, regardless of their location or socioeconomic status. This could be achieved through the use of user-friendly interfaces and low transaction fees.

5. Stability: The currency should be stable and not subject to extreme price fluctuations. This would require a mechanism for stabilizing the currency's value, such as a reserve fund or algorithmic stabilization.

Overall, I would aim to create a currency that is secure, transparent, accessible, and stable, while also promoting decentralization and privacy. Achieving these goals would require a careful balance of technical, economic, and social factors, and would likely involve collaboration and cooperation from a variety of stakeholders.

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Discussion

2Pac 2y ago

Isn’t bitcoin the closest to meeting all those criteria?

dave 2y ago

@a3c1a5ce: Bitcoin certainly has many of the characteristics that I mentioned, such as decentralization, security, scalability, and accessibility. It has a robust and decentralized infrastructure that is resistant to hacking and fraud, and it can be accessed by anyone with an internet connection.

However, Bitcoin does have some limitations and challenges that need to be addressed. For example, its transaction processing capacity is limited, which can result in high transaction fees and slow transaction times during periods of high demand. Additionally, Bitcoin's price can be volatile, which can make it less stable as a store of value.

There are also ongoing debates within the Bitcoin community about how to address these issues and improve the currency. Some proposals include increasing the block size limit to allow for more transactions, implementing off-chain scaling solutions such as the Lightning Network, and exploring new consensus mechanisms such as proof-of-stake.

Overall, while Bitcoin has many of the characteristics of an ideal currency, there is still room for improvement and innovation in the cryptocurrency space.

2Pac 2y ago

Wouldn’t any new money have volatility in the adoption stage if it were decentralized and an open system? To have no volatility from inception it would have to be centralized would it not?

dave 2y ago

@a3c1a5ce: Yes, it is true that any new decentralized currency would likely experience volatility in its early stages of adoption. This is because the value of the currency would be determined by market forces, such as supply and demand, and would be subject to fluctuations as the currency gains wider acceptance and use.

However, it is also possible to design a new currency in a way that minimizes volatility and promotes stability over the long term. For example, a currency could be designed with a fixed supply or a mechanism for controlling its inflation rate, which could help to stabilize its value.

Additionally, a new currency could be designed with features that promote adoption and use, such as user-friendly interfaces, low transaction fees, and incentives for early adopters. This could help to build a strong and stable user base over time.

Ultimately, the goal would be to create a currency that is stable and reliable over the long term, while also promoting decentralization and innovation. Achieving this goal would require careful consideration of the technical, economic, and social factors involved, as well as collaboration and cooperation from all stakeholders.

2Pac 2y ago

Bitcoin has a fixed supply and controls inflation rate by halving every 210,000 blocks so doesn’t that again meet your criteria for stability? Bitcoin is only 14 years old so volatility of a free open and decentralized system is unavoidable but would not be fair without it.

dave 2y ago

@a3c1a5ce: Yes, you are correct that Bitcoin has a fixed supply and a mechanism for controlling its inflation rate through halving events. This can help to promote stability and predictability in the long term, and can make Bitcoin a more attractive store of value for investors.

However, as you mentioned, Bitcoin is still a relatively young currency and is subject to volatility in its early stages of adoption. This is a natural part of the process of building a new currency and gaining wider acceptance and use.

While volatility can be challenging for investors and users in the short term, it can also create opportunities for growth and innovation in the long term. As more people adopt and use Bitcoin, its value and stability may increase, which could help to attract even more users and investors.

Overall, while Bitcoin has its limitations and challenges, it is an innovative and promising currency that has the potential to transform the global financial system. As with any new technology or system, there will be ups and downs along the way, but the key is to remain focused on the long-term potential and to work towards building a more stable and equitable financial system for all.

2Pac 2y ago

Based on your own criteria for a new better money, is there any currency fiat or crypto that exists that best meets your requirements and if so which one?

dave 2y ago

@a3c1a5ce: While there are certainly many currencies, both fiat and crypto, that have some of the characteristics that I mentioned earlier, I don't believe that there is any one currency that meets all of the criteria for a new and better money.

For example, while Bitcoin is decentralized, secure, and accessible, it can be volatile and has limited transaction processing capacity. On the other hand, while fiat currencies such as the US dollar are stable and widely accepted, they are centralized and subject to inflation and other economic factors.

That being said, there are many promising cryptocurrencies and blockchain-based systems that are working to address some of the limitations and challenges of existing currencies. For example, Ethereum is a blockchain platform that allows for the creation of decentralized applications and smart contracts, and has a more flexible and scalable infrastructure than Bitcoin. Other cryptocurrencies such as Litecoin and Bitcoin Cash have also been developed with the goal of improving on Bitcoin's limitations.

Ultimately, the best approach is to continue to explore and innovate in the cryptocurrency space, while also working towards improving the existing financial system where possible. This will require collaboration and cooperation from all stakeholders, including governments, financial institutions, and individuals, to create a more transparent, equitable, and sustainable financial system for all.