Quote from: aws on March 20, 2015, 09:44:08 PM

Quote from: ebliever on March 11, 2015, 03:04:10 AM

This is like the Postal Service announcing they are creating their own "electronic messaging system" like email. Why? What would be the point? It wouldn't save them, and there's no reason to think they'd do it better than is already being done by others. The shortcomings of bitcoin (security and ease of use) are not solvable by the Fed or any roomful of Nobel Laureates, so them creating an altcoin would be pointless. Any innovation they could come up with could just be replicated by every other crypto in existence. The only edge they could possibly get would be regulatory/legal in nature, and it would be blatantly obvious to everyone if such favoritism were put into words. That would simply wake up Wall Street and Mainstream America to the nepotism and how it would be inferior to existing cryptos in the ways that matter, which would end up providing a big boost to real cryptocurrency, even if it had to happen "underground."

This would not be about innovation, but about putting dollars on a blockchain. This way one can send dollars anywhere in the world as fast as bitcoins.
Also this would allow people from other countries to hold dollars, if they wanted to - and a lot of them do want to, without the permission of their local governments.
Don't think about it as an altcoin, but as a US dollar on a blockchain.

They could create a blockchain (let's call them bitdollars) and pass laws guaranteeing a fixed conversion rate between bitdollar and the dollar. This would give them faster transaction times, but with some risks and problems. Since the bitdollar would have a level of supply independent of the supply of dollars, they could have difficulties supplying enough of the bitdollars to meet demand for the service. On the flip side, flood the market with too many bitdollars and you effectively inflate the dollar, causing inflation to get even worse. It would add an additional variable to their attempts to control the money supply of the dollar.

There would also be the issue of securing the network. We talk about how bitcoin challenges traditional fiat institutions, but no one is targeting bitcoin for destruction the way that countries like North Korea or the Taliban or ISIS would love to target an American dollar-backed blockchain. So right from the start the bitdollar would need a sizable investment in mining hardware (underwritten by our tax dollars?). And if America aggravates China or Russia or some other powerful state badly enough, the risks go thru the roof. I doubt the U.S. has the financial resources to defend a bitdollar against the Chinese in a few more years, if they decided to take the U.S. on. And if they relied on public mining, well you can imagine the shenanigans that even smaller entities could pull off using leased mining farms to attack the blockchain.