Technically it is totally possible to create a cryptocurrency that whose price is fixed relative to a basket of oil, gas and gold reserves... until the day comes the government decides that some baskets of fixed goods are more equal than other baskets.

I'm unclear on how you can fix the price of a cryptocurrency. Saying how much you'll buy something back for doesn't set the price people will pay to buy it, because the issuer isn't the only player making the market—people can buy it from each-other, rather than from you, and they can pay whatever they like when they do so.

Look at US treasury bonds: the US can adjust the interest rate on them, but it's the market (dealers holding auctions, etc.) that actually sets the price of them. If everything else is a bad investment (like during the 2007 recession), people will actually buy the likely-negative-yield treasury bonds at a premium, because they need to stick the money somewhere and everything else looks to have a worse NPV. As such, the market value of any security can exceed the value of its call option.

They can set the prices with a simple standing offer to buy and sell at a given rate.

If the Venezuelan government will sell anyone one oilcoin for a barrel of oil, nobody would buy one for more. If the Venezuelan government will buy an oilcoin for one barrel of oil from anyone, nobody would sell one for less.

They almost certainly won't be freely exchangeable to this degree, but there is no problem with price controls in theory.

you're assuming no one would undercut or overbid them. exactly the point is there's no intrinsic reason to assume that

Why would anyone sell an oilcoin to me for less than a barrel of oil when they could sell it to the government for more? (and vice versa)

If you want to fix the price of a currency between (for example) $0.95 and $1.05, you simply offer to sell to anyone at $1.05 and offer to buy from anyone at $0.95. As long as you don't go bankrupt, you can keep doing this and pretty much guarantee the price will never exceed that range even on other market, or people will simply arbitrage the excess away.

Tether tries to do it by holding the total market cap USD in its own reserve (whether or not they actually have it is up to discussion). It's a disaster waiting to happen.

Maybe they are saying "We will do our best to control/manipulate the exchange rate rather than let it float"

Sounds like a blast from the past.

I think the point is that it's a fiat currency but it's purely digital and and not paper cash, and transfers use a blockchain (?) instead of bankfiles. Unclear who controls the block chain though, I'd guess it's centralized.

And the government can seize money at any time, Tether style, by invalidating public coin addresses it seems dirty.

This has been done already by projects like Tether (USDT). There is currently some... discussion as to whether they really have the assets to back it 1:1, but it does stay about even with the dollar on exchanges. Some coins also offer "price-stable" options such as BitShares.

> a crypto which is relatively stable could be very useful ...

It seems like there's a fairly tight correlation between the value of a cryptocurrency and the effort required to mine it. (Which is what you'd expect -- if the price of BTC rises, more people mine it, and the per-block difficulty increases, and if the price falls, fewer people mine it, and the difficulty falls.)

I wonder if we could create a more stable cryptocurrency by keeping the mining difficulty constant (or possibly tied to moore's law). It may be wildly "inflationary" in terms of the size of the monetary base, but it should be fairly stable in terms of real resources per unit of currency.

At the end of the day crypto-currency is protected by the fact that it costs more to undo a transaction than the value of the transaction. Making an individual block easier just means that we have to wait for more blocks to be mined before we consider transactions to be safe. With you're idea there will be more blocks mined per hour, but the amount of electricity consumed per confirmed tx will remain constant.

However that'll kind of bring out the 'bigger blocks' solution except by having 100 blocks rather than 1 100-times larger block. Downsides will line up with big block downsides

I've been wondering if there could be a crypto currency based on time. For example, perhaps each person in the system could automatically given one new coin every day. Assuming there there was some way to validate new users coming into the system as real people.

There's a very large set of problems that would become solvable if digital identity could be done. Sadly, as of yet there's no solution in sight that doesn't require a third party.

The difficulty is necessary for moderating consensus given more 'voters' (with their flops) joining the network.

I'm interested by your idea, but you would need to work by a different consensus model. Proof-of-stake would be interesting to investigate, since mining doesn't scale with computation power, rather holding of the currency.

Is that true? BTC has massive surged in price this year.

Has mining cost matched? Or is mining cost a ceiling for trading price

Crypto assets do not actually require mining after launch I believe. You could pre-mine all the assets. I believe XRP (ripple) is an example

The contending decentralized consensus algorithm is called Proof of Stake, and it works by giving you lottery tickets based on how much wealth you already have.

PoS coin supplies should be avoided, as the production cost or input work is not worth the speculative asset produced.

XRP is a case study in how they've created artificial scarcity and can flood the market with sell orders from their reserves.

https://www.coindesk.com/ripple-jed-mccaleb-settle-suit-over...

They could also just have a centralised service validating transactions. No need to mine, no need for stake. Not exactly a traditional cryptocurrency at that point, but in day-to-day use no different (and rather more attractive to political regimes like Maduro's.)

Also, Ethereum ERC20 tokens, which aren't cryptocurrencies per se, just numbers in a ledger whose updates get embedded within the cryptocurrency (ETH)'s blocks.

MakerDAO has been working on a Stablecoin for the past 2 years and plans a release later this month.