This is a brainstorming idea, based on my failed attempts to get my friends and family excited about cryptocurrencies. The primary issue that seems to freak them out is the idea of the global money supply being inflated by the issuance of BTC or any other new currency.

If we are serious about making a dent in fiat currencies, we have to find a way to convince the masses that cryptocurrencies' value comes from SOMEWHERE. I have an idea for how to go about that, but I don't know if it's feasible given the existing technologies.

My hypothetical currency is called "CannibalCoin." Instead of trying to generate new value, CannibalCoin EATS the "intrinsic value" that people believe is somehow trapped inside their fiat money. It is the online equivalent of creating a private coin and making someone burn a dollar in front of you in order to get it.

How can we accomplish this using existing methods? The problem is that there needs to be some way of recording the existence and destruction of the USD in the CannibalCoin block chain. The challenge is finding a decentralized method for documenting that someone has irreversibly enrolled fiat currency into the system.

A bank could simply accept a deposit and certify that it was destroying the cash. But I am curious if anybody here can think of a way to accomplish the same thing without banks getting involved.