Quote from: NearlyMiningXx on December 25, 2017, 05:31:07 PM

Quote from: AlloyReserve on December 25, 2017, 05:49:14 AM

Quote from: cassiscash on December 25, 2017, 05:15:09 AM

This seems like the natural next step for cryptocurrencies. I've been waiting for something like this for a while now. There is certainly a need for Alloy Coin especially considering the recent market swings. You're absolutely right that cryptocurrencies are too volatile to use as tender. However, Tether is unattractive to someone like myself who sees cryptocurrencies as investments. You may have just found yourselves a niche!

The ability to earn dividends is precisely what stable cryptocurrencies need.

I had a question about the long term viability of the price floor. How do you prevent reserve assets from depleting? Like a run on the bank?

Cheers

-Cal

Hello Cassiscash,

Thank you for your support and for the vote of confidence

I'm happy to hear that you think AlloyCoin solves a real problem!

As for the question regarding the run on the bank, you bring up a really great point. Alloy Reserve wants to be as transparent as possible and we take that issue very seriously.
For those who don't know what a 'Run on the Bank' is, it's where every depositor in a bank returns to claim their money at the same time. In traditional banks, they're only required to keep a portion of their depositor's funds. So if everyone shows up at the same time, not every can get their money.

AlloyCoin does not work like that - We seek to guarantee the value of all circulating coins. Not a fraction of them.

Since Alloy Reserve seeks to guarantee some minimum value, we aim to always buy back AlloyCoins. So for Alloy Reserve, a run on the bank would be where every AlloyCoin holder sells back to Alloy Reserve at the same time.

In order to prevent total depletion of assets, Alloy Reserve actually implements the following precautions:

First, the price floor is calculated by taking all circulating coins and a "buffer" of about two months worth of AlloyCoins that have yet to be mined.
Second, Alloy Reserve expects to earn interest on its investments. So the Reserve's value should grow over time.
Third, Alloy Reserve collects new coins for each block that is mined. So there's always a new supply of coins for Alloy Reserve to sell.
Lastly, when Alloy Reserve sells coins, they're only ever sold at a value above the price floor. The difference is used to help 'pad' the Reserve.

You should check out the third section of our white paper related to how the price floor is calculated. One main note to take away is that when Alloy Reserve say 'circulating coins' we mean all coins not held by Alloy Reserve. Those are coins that were either mined or sold into circulation. AlloyCoins held by Alloy Reserve have no value. Some people get that confused

It's an interesting problem and we have a really solid finance team that oversees those precautions. For the sake of transparency I want to stress that AlloyCoin is not a perfect solution. But the equation we've outlined in the white paper should be viable. We encourage you to review it and if you think you have a better solution, share it with us

Super cool project! Do you have mining software released for Alloy Coin? Also, can you do GPU mining with it?
Also, just to clarify, in your paper when you say 'circulation inflation' your referring to the coins mined, or is that the number of coins that are circulating?

Cool concept you guys. I just wish you would launch sooner, summer 2018 is too far away haha

Quote from: NearlyMiningXx on December 25, 2017, 05:31:07 PM

Quote from: AlloyReserve on December 25, 2017, 05:49:14 AM

Quote from: cassiscash on December 25, 2017, 05:15:09 AM

This seems like the natural next step for cryptocurrencies. I've been waiting for something like this for a while now. There is certainly a need for Alloy Coin especially considering the recent market swings. You're absolutely right that cryptocurrencies are too volatile to use as tender. However, Tether is unattractive to someone like myself who sees cryptocurrencies as investments. You may have just found yourselves a niche!

The ability to earn dividends is precisely what stable cryptocurrencies need.

I had a question about the long term viability of the price floor. How do you prevent reserve assets from depleting? Like a run on the bank?

Cheers

-Cal

Hello Cassiscash,

Thank you for your support and for the vote of confidence

I'm happy to hear that you think AlloyCoin solves a real problem!

As for the question regarding the run on the bank, you bring up a really great point. Alloy Reserve wants to be as transparent as possible and we take that issue very seriously.
For those who don't know what a 'Run on the Bank' is, it's where every depositor in a bank returns to claim their money at the same time. In traditional banks, they're only required to keep a portion of their depositor's funds. So if everyone shows up at the same time, not every can get their money.

AlloyCoin does not work like that - We seek to guarantee the value of all circulating coins. Not a fraction of them.

Since Alloy Reserve seeks to guarantee some minimum value, we aim to always buy back AlloyCoins. So for Alloy Reserve, a run on the bank would be where every AlloyCoin holder sells back to Alloy Reserve at the same time.

In order to prevent total depletion of assets, Alloy Reserve actually implements the following precautions:

First, the price floor is calculated by taking all circulating coins and a "buffer" of about two months worth of AlloyCoins that have yet to be mined.
Second, Alloy Reserve expects to earn interest on its investments. So the Reserve's value should grow over time.
Third, Alloy Reserve collects new coins for each block that is mined. So there's always a new supply of coins for Alloy Reserve to sell.
Lastly, when Alloy Reserve sells coins, they're only ever sold at a value above the price floor. The difference is used to help 'pad' the Reserve.

You should check out the third section of our white paper related to how the price floor is calculated. One main note to take away is that when Alloy Reserve say 'circulating coins' we mean all coins not held by Alloy Reserve. Those are coins that were either mined or sold into circulation. AlloyCoins held by Alloy Reserve have no value. Some people get that confused

It's an interesting problem and we have a really solid finance team that oversees those precautions. For the sake of transparency I want to stress that AlloyCoin is not a perfect solution. But the equation we've outlined in the white paper should be viable. We encourage you to review it and if you think you have a better solution, share it with us

Super cool project! Do you have mining software released for Alloy Coin? Also, can you do GPU mining with it?
Also, just to clarify, in your paper when you say 'circulation inflation' your referring to the coins mined, or is that the number of coins that are circulating?

Cool concept you guys. I just wish you would launch sooner, summer 2018 is too far away haha

Hi NearlyMiningXx,

When the mining software is released, we are planning for AlloyCoin to be mineable with GPU.

The question regarding circulation inflation actually ties into why the mining software hasn't been released yet. When we say circulation inflation we mean the number of coins that were mined over a period of time (usually about a year) as a percentage of coins already in circulation.

This is an important concept for our model to work since the coins that are mined actually have a negative impact on the price floor. Those coins in a sense dilute the price floor by inflating the number of coins in circulation. So we need to consider them when we calculate our price floor.

For this reason, we can't release mining software yet because by the time summer of 2018 (our ICO) comes around, there would be too many coins in circulation for AlloyCoin's price floor to work. Check out the evaluation section in our white paper that talks about the effects of circulation inflation.

Alloy Reserve picked summer of 2018 to give us time to prepare for legal issues related to crypto Wink