There's nothing there that would make the coin stable in price versus a fiat currency; you just described the platonic ideal bitcoin type thing where the mining participation is particularly democratic.

> There's nothing there that would make the coin stable in price versus a fiat currency;

That's correct. The idea would be to make the supply stable wrt. to the hashing costs. Meaning supply would increase with increasing computational efficiency and stay constant relative to it (ie. the inflation of this currency would be tied to improvements in chips).

That puts an upper bound on the value but no lower bound.

Yep, but there's no lower bound on bitcoin's price either...

I’m not talking about Bitcoin, just addressing your description of this scheme as a “stable coin.”

Ok, I should elaborate some more: The initial demand for bitcoin was because of technical curiosity and a need to perform payments outside of traditional payment systems. This demand could be enough to create a lower bound here as well. And contrary to bitcoin a limited upper bound but no definite lower bound would incentivize spending rather than hoarding. Fiat money has effectively the same properties, because central banks will never allow strong deflation but a national currency can lose most of it's value when the economy crashes (see Venezuela).

Bitcoin was cleverly set up as an deflationary currency to attract early adopters. Now, you and I (in line with mainstream economics) may think that a deflationary currency is a bad idea for a state, but there are a lot of people who don't, and it's not actually being used as a state currency anyway, so maybe it's OK.

Anyway, the point is that from the beginning bitcoin was set up to promise massive gains to early adopters, which helped gain traction. Your suggestion has nothing similar, so it's not clear why anyone would adopt it.

Really, it seems like you're promising hyper inflation (because of Moores law), which is something a lot of people flock to crypto to get away from, and nobody (even those who like a little inflation) thinks is a good idea.

Fiat money has properties which your proposed "stablecoin" doesn't, like a reason for people to wish to receive it as payment in the first place (people need to settle debts and tax payments denominated in that currency) and a central bank which acts to reduce the amount in circulation when inflation gets too high (Venezuela's central bank isn't doing that and you've noted the result...).

Incentivizing spending rather than hoarding just means you hit the lower bound (probably zero, unless receiving units of your coin is really, really technically interesting to some people) earlier...

Make sure you understand economics and scalability.

The general lack of awareness of how traditional currencies are established and maintained is just shocking.

Also, make sure you understand scalability. As much as the crypto community likes to poo poo the Visa network; the Visa network handles an order of magnitude more transactions per second than the current cryptocurrencies can handle.

> The general lack of awareness of how traditional currencies are established and maintained is just shocking.

It isn't shocking. The point of 99.9999% of all cryptocurrencies aren't to make anything useful. They exist to get the creators rich. All of the rubes that buy into these scams will simply be sending their former wealth through a massively inefficient rube goldberg contraption that lines the pockets of those at the top of the pyramid.

The creators don't need to understand monetary policy, economics or scalability. The creators just need to understand enough deceptive marketing to get some suckers lining up to buy. The smart ones also know just enough ways to pocket their newly acquired fiat wealth and escape without getting caught by jonny law.

If you are seriously comparing Visa network to protocol like Bitcoin, it is you who doesn't understand economics and scalability.

Visa network is centralized and owned a company. Bitcoin is a protocol with no central ownership. Additionally, visa network is currency-agnostic and enables payments in any currency they want to support. Centralized services like Visa can work with Bitcoin in various ways, for example the settlement transactions can be done with Bitcoin.

Additionally Bitcoin has been developed from the start with various centralized services built around it - without those services it wouldn't be popular at all. Any centralized service can scale as well as Visa. Though where Bitcoin provides value is not near retail payments, and while there have been bitcoin-reloadable visa cards I think that is not very interesting use-case.

>Though where Bitcoin provides value is not near retail payments

Where does it provide value? If it's bad as currency, what's the use case? It certainly fails store of value test (unstable, high volatility).

Sounds sort of similar to 0xbitcoin in that it's possible for anyone to mine tokens, but that project currently raises the difficulty (like Bitcoin). I'm assuming that a few changes to the difficulty scaling could make a proof-of-concept of sorts as a mineable ERC20 token. In this case, the security of the system relies on the security of the Ethereum network though, which shifts the concerns but also means that people still need gas to send transactions - which might be difficult for user adoption.

Yeah! We've actually talked about something similar on the 0xBitcoin discord! I'm @mikers on there if you'd like some help getting your "stable coin" off the ground.

If the value of the token ever gets far above the cost to mint, eventually more people will start creating it, and more will be produced, which, if demand stayed constant would result in the value diminishing. In practice, most tokens already do spend significant amounts of time paying out more than they cost to mine (which is why people mine them at all). Also, these effects take time to occur, so it is most likely that they would overshoot, crashing the value of the coin. Minting would then stop, but you already have a much greater supply than demand so there would be no incentive to mint more at all. You'd be stuck with the coins as worthless - you have no mechanism to make them increase in value.

Now, if instead of using some uninteresting hashing, you did genuinely useful work to create the coins, perhaps like gridcoin, then your system might make sense - since it's representative of an amount of computation performed.

Nobody in their right mind would hold it though - I presume you'd use it to pay for other computation, and there'd be a market of companies wanting to buy it in order to get their workloads computed.

What I don't get with PoW, why would you want people to convert electricity into your coin? You're enriching an entity (the power company) that is not involved in your economy. They aren't going to use the money you give them to provide liquidity to the holders.

It's not even "converting" the electricity into a coin because the amount of energy burned has no relationship to the amount of transactions processed or "coins" generated.

How do you create something digital that cannot be forged or stolen and also has proven rarity? PoW is one way. I think the other methods such as proof of stake havent really been proven yet.

This is Bitcoin et al but without the Ponzi structure. So speculators would be unlikely to buy it over Bitcoin, and without those what would be the source of activity?

[Initially] probably only those without other means of payment. You can convert electricity + computing power into a currency (and compared to btc you don't need to join a pool to have a realistic chance at receiving the tokens).

There are thousands of small coins for which this is true. Therefore the reward would likely be less than the energy consumption costs... You need a reason for adoption.