What attributes should the ideal cryptocurrency have in order to actually become widely used as money? These?
- Worldwide Distributed Blockchain – ownership of e-coins should be mirrored on computers around the world so that if the power goes out in your region and the internet goes down you have not lost your money;
- Unalterable Mining Algorithm – limiting the maximum number of coins. E-coins may be virtual but they really do exist. They are not debt; they are a mined commodity. If there is a finite number of them that will ever exist, their ultimate value will be determined by the economy in which they are used. An economy is defined as buyers and sellers and transactions;
- Merchant Base – An economy is made up partly of sellers;
- User Base – An economy is made up partly of a large and active community of consumers;
- Cash Register Ready – An economy is made up largely of retail transactions. An instantaneous transaction time at the point of sale is necessary for there to be popular use of the e-currency;
- Convertible into other assets – An economy is made up largely of investors. There must be exchanges through which the e-currency can be converted to other currencies, commodities, or other assets;
- The Wallet – Members of the e-currency economy must be able to hold their currency in a wallet that is capable of transacting at the point of sale and on the exchanges. The wallet should allow the printing of paper money for storage and purchases as well.
- Early Adoption – must be rewarded to offset the risk taken by early adopters of the e-currency. The likelihood of these rewards coming to fruition must be made clear to potential users;
- Know Your Customer (KYC) – This government (banking) program is designed to prevent crime by making all transactions traceable to the source. It is debatable whether this is a desirable feature;
- Asset Backed – is this necessary? Gold is considered the ultimate collateral because it is a limited resource, it costs money to mine, and it is not someone else’s debt. But the first two attributes above have largely covered that. So I think that e-currency can “be its own gold”.
What have I missed? Please let me know. Meanwhile check out the e-currency and group of users I have discovered that has a plan to meet these criteria. I think their plan is both simple and ingenious, and will be successful. They are opening the gate for e-currency to become widely recognized and accepted as money.