I though this intrade-chain was the solution for the stable prices and not stable prices what the intrade-chain needed.
But if you can peg the value of a currency to a commodity without storing it (even only its price denominated in other currency), you can have a pretty stable currency defining the currency as a basket of commodities.
2) If you could peg a chain currency to a commodity using contracts, the options market still needs an arbiter to determine what the price of the commodity is at a given moment. How do you make that arbiter decentralized?
If you want a distributed currency pegged to ANYTHING, this is one of the biggest technological problems to solve. However, consider this: there are also attack vectors on bitcoin that involve fraudulent timestamps. Bitcoin uses a distributed timestamp protocol, where nodes reject timestamps that differ significantly from what they think the time is. I believe the same logic can be extended to exchange rates. If somebody lies about the exchange rate, other nodes will reject that block. Consequently, I consider the problem of distributed exchange rates a (mostly) solved problem.
I wouldn't say mostly solved, I'm sure is a complex problem, but It's a good idea, it may work.
I was assuming the intrade would use a third party chosen by the two participants specified in each contract to say what happened in the outside world. That's one of the things I meant when saying contracts are not fungible.
I like this "informing the network by voting" idea.
The "price" of a given commodity would be some weighted average from the last miners's reported prices. Nodes should be motivated somehow to not to "go on with the lie".
One thing to think about is how miners are rewarded. The easiest ways to do it are issuing a new currency or paying them fees directly with bitcoins.
Sorry for the confusing links.
I think is impossible to "back" a currency without introducing centralization.
In this case, he want to use option contracts but I see a few problems.
1) As far as I know, option contracts are not fungible. I didn't get the Gascoin/antigascoin thing.
-Suppose oil is at 10 btc right now. How many btc to buy the oilcoin, a much for the antioilcoin?
dacoinminster, can you elaborate a little bit more on this?
For #1, I am not sure that gascoin/antigascoin is the way to go. It is possible that an intrade-like system as discussed earlier might be a better way to do it.
I will say that I imagine gascoins/antigascoins would have to have some sophisticated rules to prevent the bitcoins held in escrow from running out. I'm guessing the rules might involve some of the following ideas:
1) All bitcoins held in escrow could be used as needed when payouts happen, not just the bitcoins from one coin/anticoin pair
2) Anticoins would be fungible. If you bought one, some of your bitcoins might go into escrow if that anticoin was last sold when the commodity had a lower price. Some bitcoins might come out of escrow (to the seller) if the commodity had a higher price at the last sale.
3) If an anticoin was in danger of going "in the red", the protocol might force a sale, similar to a margin call
4) In the event that all the entire escrow fund went "in the red" (like if there was a "run" on the funds similar to a bank run), bitcoins could be created "out of thin air". I recognize this would violate the 21M hard limit, and that would probably never fly with the community. Perhaps instead of real bitcoins, they could be some kind of "IOU" from the escrow fund, redeemable when the fund went back in the black.
Regardless of whether people are trading something that looks like a future's contract (coin/anticoin), something that looks like intrade, or something else entirely, the first problem to solve is how to create a stabilized extrapolation of bitcoin.
Imagine we have an intrade-chain denominated and paid in bitcoin (so not a good place to short BTC). The chain makes the escrow, but it cannot generate bitcoins out of nothing, they're
real bitcoins from the btc network.
What I don't get is how you get from the intrade to an asset that can be sold at any moment for the current price (in BTC) of a barrel of oil.
How is that done with bets? How many parts are necessary?
I don't know how to do it even with a stable currency.