Enhancing UTXO cryptocurrencies with "Gold Coin Proof"

Started by RickyChhajed, Aug 31, 2022, 01:56 AM

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RickyChhajedTopic starter

One approach to stabilize cryptocurrency values is to link them to regular currencies or physical commodities, but this centralizes the system and requires trust in the issuer.



Tether, for example, took years to reveal its reserve collateral and even then only a small portion was in cash. Users are also unsure how to resolve disputes with Tether, which has the ability to ban/block users. Despite these issues, stablecoins like Tether remain popular because they can be traded on crypto exchanges and blockchain platforms.

Another approach to stabilizing cryptocurrency values is through volume adjustable tokens like Ampleforth, which adjusts the number of tokens in circulation based on their price target. However, this can be difficult for users to understand and use effectively.

A newer solution is the concept of dual loop cryptocurrencies, such as BitBay's Dynamic Peg technology. This system uses two loops - one for trading and one for stabilization - to keep the value of the currency stable without relying on any external peg.

Overall, while there are benefits and drawbacks to each approach, the search for a stable and decentralized cryptocurrency continues.

BAY is a Proof-of-Stake (v3) cryptocurrency that uses additional features to stabilize its value without relying on external pegs. Every satoshi has a sample number that determines its liquidity and cannot be changed. There are reserve and liquid coins, with the Peg Index determining which coins are which. Liquid coins can be used for transactions, while reserve coins are slower-moving.

Users participate in mining/staking and can vote for inflation, deflation, or status quo. An attacker would need to capture 51% of the coins to manipulate inflation/deflation. While it's a new approach to stabilization with investment opportunities, there are entry difficulties since it's a pilot project. However, it is a full-fledged cryptocurrency with bitcoin script, multisig, and locktime.
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IdeaPad

The TON cryptocurrency of the Durov brothers has a mechanism to combat volatility through a reserve fund, but its manual mode is unreliable. Many stable coins are pegged to the dollar, which poses the question of whether cryptocurrencies should be tied to fiat. It may be better to tie them to a commodity basket or to energy. Possession of cryptocurrency could give the right to receive energy directly by compensating for payment for electricity or gasoline at a specific rate.
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Sildymas

The limitation on the amount of money in cryptocurrencies when using the proof of work approach leads to an increase in complexity, ultimately leading to the impossibility of issuing new coins and higher transaction fees.

This approach may not be suitable for the new financial system, but a generational change could overcome this limitation. The number of transactions per second is growing, and the approach still has a lot of room for growth.
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natmir

One approach that has been discussed is linking cryptocurrencies to regular currencies or physical commodities. This can provide stability but comes with the downside of centralization and the need for trust in the issuer. Tether, for example, faced scrutiny due to the lack of transparency regarding its reserve collateral and the ability to ban/block users, which raised concerns about trust and dispute resolution.

Another interesting approach is the use of volume adjustable tokens like Ampleforth, which adjusts the number of tokens in circulation based on their price target. While this method aims to stabilize values, it may be complex for users to comprehend and utilize effectively.

A newer concept that caught my attention is the idea of dual loop cryptocurrencies, exemplified by BitBay's Dynamic Peg technology. By utilizing two loops for trading and stabilization, this system aims to maintain currency value stability without relying on any external peg.

I'm particularly intrigued by BAY cryptocurrency, which employs Proof-of-Stake (v3) and additional features to stabilize its value without external pegs. The fact that every satoshi has a sample number determining its liquidity and the distinction between reserve and liquid coins based on the Peg Index is quite innovative. The idea of users participating in mining/staking and having voting rights for inflation, deflation, or status quo is an interesting governance model. The security measures against manipulation through coin capture and the incorporation of bitcoin script, multisig, and locktime make BAY a promising and robust cryptocurrency.
While each approach has its benefits and drawbacks, the search for a stable and decentralized cryptocurrency continues to drive innovation in the blockchain space. BAY's unique approach, although a pilot project with entry difficulties, presents investment opportunities and brings fresh perspectives to the quest for stable cryptocurrencies.
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