Quote from: sacarlson on July 13, 2011, 09:34:13 AM

Quote from: hugolp on July 12, 2011, 11:26:27 AM

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The purpose of the Beertokens trust is an attempt to create a more stable currency that will not change in value more than between +-3% over time so that merchants can start using crypto currencies for what they were meant to be used for instead of just speculating.

If I have understood correctly, you wont accomplish what you are promising, because its basically imposible. The price of anything, including a currency is determined by supply and demand. You are controlling the supply and it wont change more than your 3%. But the demand is unknown and can be very variable, so you basically can not control the price.

Maybe you should try and tell that to Chinese who have been doing it for years to pin the value of there currency to the USD by buying and selling US treasuries. Or maybe you have never been to Los Vegas and used casino chips that are guaranteed to be trade-able for an amount of USD. Although I must admit I have had my doubts with the large changes in BTC over the past 30 or so days. It's all a mater of having large enuf reserves of stable enuf asset holdings base to cover fluctuations and have an unlimited yet controlled supply of beer. As the changes we have seen in the value of BTC go from 30 to 10 and up again I find I would not be able to hold as large a percent of "The Trusts" assets in that class of holdings as I had hoped we could do. I have changed high estimates of needed preminted Beertokens to 26billion as compared to what we see PayPal.com has in there float units and in the event we run out we would just run a new chain that would be equally trade-able 1 to 1 shares in the central exchange to provide for infinite expansion. And also THE most important is to have it managed by a GROUP of trustworty people not just one.

If you dont have direct control of the supply, you wont be able to control it for long. You will eventually run out of funds, there are very clever speculators out there. This happens constantly when central banks try control the exchange rate of their currency. Because they dont control the supply of the other currency they get crashed. The chinese are able to do what they do because their economy is developing and the natural tendency of their currency is appreciation. Devaluating is easy and "free" (for the central bank). Increasing the value of a currency is expensive. If the chinese economy started to fail, their central bank would be unable to hold the value of the yuan to the dollar.

If you have direct control of the supply, who is going to trust the currency?