Quote from: Croesus on May 08, 2013, 09:51:12 AM

Quote from: edmundedgar on May 08, 2013, 03:23:27 AM

One place where it would help with the USD<->Bitcoin problem would be in combination with a parallel currency with that had its money supply automatically adjusting to keep it stable against USD.

Quote from: edmundedgar on May 08, 2013, 07:36:11 AM

Quote from: XertroV on May 08, 2013, 06:02:52 AM

As a first step in this direction at some point in the future I'd like to start an Australian cryptocoin that is pegged to the Aussie Dollar. You'd be compromising many of the values inherent in Bitcoin, and introducing central points of failure, but properly managed it would be a powerful force, especially if AUD -> AussieCoin is easy, then you can cheaply, quickly and easily change AussieCoin for Bitcoin without any restrictions.

Right - I guess the main point of failure / excessive trust that you're stuck with is that you need a reliable way to know your own exchange rate. Once you've got that, in theory it should be possible to do the rest just with algorithms in the software.

XertroV and edumundedgar, have either of you looked at cvTokens? They are a way to accomplish stable currencies like these without trusted parties and within a useful framework of incentives.

Looks interesting. I'm not sure that I followed it all - if you're trying to peg to (say) AUD don't you have the same problem I mentioned up-thread of needing to trust somebody to provide external information about the exchange rate of your currency to AUD? You say,

Quote from: Croesus on May 07, 2013, 11:14:29 AM

The escrow is aware of the rough market valuation for a cvToken by means of a distributed auction (which is not intended to serve as a primary exchange, those will be developed elsewhere if the cvToken is marketed successfully). It uses this information to enforce rules for issuance and cash-outs of tokens.

But how does that work? The problem everyone has been bumping their heads against with the p2p concept is that nobody has a good way to know what's going on at the fiat end of any given transaction.