Preface:
The need: A new money for a new age.
The Federal Reserve has been slowly killing the dollar since it began issuing the "Federal Reserve Note" It's a complex subject that has been written on ad nauseum, but unfortunately read very little.
The dollar has been pushed so close to the edge that new technologies are being looked at to try and buff away the problem. Now, the idea of Central Bank Digital Currencies (CBDCs) have been kicked around for a few years, and seem gain more traction every time the subject is brought up.
With not much effort, we can imagine the many terrible things that come along with that depending on the way that vague phrase is implemented. Even trying to "steel man" the idea (giving it every benefit of every doubt) CBDCs still fall short.
Praise be to God that the private sector started exploring the idea of digital assets and, as usual, has experimented with, improved on, and learned a lot about how they behave in the wild at a much faster rate, and much more effectively than any state could ever hope to. Some of the principals we have learned are:
- The more decentralized a system is, the stronger it is.
- Blockchains make very effective ledgers.
- Not your keys, Not your money.
- Fungibility is vitally important, and to gain fungibility, you MUST have privacy.
- Useability. If it's not easy to understand, use, and calculate on the fly, it's not going to be adopted well.
A proposal: What a digitized national currency should look like.
It would require restructuring of a few things, but the benefit would far outweigh the cost.
It should be open source, based heavily on Monero,with a few new features and some tweeks.
Since 2014, Monero has earned a reputation for protecting the privacy and funds of it's users, but a few features are lacking for some business to be conducted, and, (putting my minarchist hat on for a second) for the state to go along with the idea. I am NOT suggesting these changes be made to Monero, I'm only using Monero as a strong base for something new with different purposes.
Disclaimer: I have no coding experience, so any input, criticism, suggestions are very welcome.
Multiple types or programable view keys:
Sometimes, there are situations where someone you do business with needs to verify your transaction history, or account balance. A lender, for example. Monero already has 2 types of view keys, that do a good job of still protecting your privacy in a worst case scenario, however, they're still difficult to use, and not very versatile.
Disposable, programable, view keys that are as easily generated and named as stealth addresses and generated in wallet allowing the wallet owner to only show transactions between specific dates, and maybe even set a time limit on how long the view key will allow someone to view the amounts and transactions in the wallet.
Taxes, numbers and calculation.
First of all, Instead of Monero's 12 decimal precision, The new currency should be cut down to two decimal places like the dollar, and the rest added back to the total whole number supply. One thing that scares some people off is all the huge decimal. For the vast majority of people, dividing something by 100 is about their limit in their head on the fly. That's what they're use to, and any more than that is just to much work. An example of this comes from Turtlecoin, a mostly dead project now, I think, but that's beside the point. It's max supply was something like 100 Trillion, but only used 3 decimal place precision. Max supply of this new currency is a question that needs to be answered, but I don't have a number to propose at the time of writing.
Code is law.
Here is the compromise. Written in the code, a (% just for example) 5% fee on every transaction. 1% of the fee goes to the miner of the block, 1% to a wallet that distributes 1/50 of the wallets balance to each state on a regular basis (daily, weekly, monthly, yearly. Whatever works.) and 3% to the federal government.
(actual percentages negotiable, but set in stone once decided)
This would replace the current tax system. Taxes would be low, easy to calculate, and relieve the financial burden on states and the federal government of the MASSAVE cost of enforcing compliance. It would also incentivize better budgeting on their part, and encouraging a healthy economy. Their revenue would be based on the velocity of money. On the flip side, every huge corporate transaction, coffee purchase, donation, and drug deal would anonymously generate revenue which adds up to quite a sizeable amount.
It also keeps a stable incentive for miners to continue mining. ASIC resistance, however, I believe is still a priority so that everyone from the government to the average laptop can help process transactions and secure the network and have some means of earning a small amount.
Inflation and tail emissions
Obviously, some of the supply will be lost by negligent folks. I'm sure someone, somewhere, who has figured up the average amount of money lost due to this. The tail emission should be adjusted accordingly. Or, If someone can figure out a good formula. Dynamic tail emissions may be possible! But like we've learned, code is law. UNDER NO CIRCUMSTANCES should the max supply be able to be altered by anything but a unanimous decision of the miners.
Don't melt the plastic!
I know there are some companies that already do something similar, so this shouldn't be much of a leap, but linking a payment card to your wallet, while maintaining anonymity, which you could use at point of sale would be ideal. Not many people want to pull their phone out every time they buy something. A debit card that you could activate / deactivate at will by signing a transaction through the wallet would be a familiar feature that would be convenient, and ease the transition, and help negate loss or theft.
Transitioning to the new currency
Switching from one currency to another overnight would be a catastrophic shock all around. As the Federal Reserve Note and Bitcoin coexist in El Salvador, the Federal reserve note and the new dollar could coexist for a time in America as well while the Federal Reserve Note is rolled back. Use of the new currency should carry enough incentive to get people to switch. Banks could switch gears and transition there services to more of an exchange role.
Conclusion
This idea is nothing more than an abstract. I don't have all the pieces to the puzzle, and I would LOVE input from some of you who have a better understanding in some of these arias than I do. If you decide to work on this at all, and flesh it out better, please keep me in the loop! I'd love to see your work, and hear your thoughts, problems you run into, etc.
