What is the BitCash Stable Feature?
The BitCash Stable feature was created to address one of the main road blocks to mass adoption of cryptocurrency: Price Volatility.
For example, let’s say I run a business and I have a remote staff which is very common these days. I wanted to pay one of my remote employees $1000 USD. If I were to pay them in BitCash ($BITC) or any other cryptocurrency, the employee can only be hopeful that by the time the payment is received and converted into fiat that the value hasn’t decreased due to price volatility in the cryptocurrency markets.
Or, for another example, if I were an online retailer that received payments in the form of cryptocurrencies, I would need to have a system in place that would immediately convert the received crypto into fiat in order to mitigate risks of losing to much value in a bear market. This almost makes it useless to accept crypto as a payment.
For one last example, if I own cryptocurrency and don’t want to sell it to my local fiat, but I also don’t want its value to reduce during a cryptocurrency bear market, then I really don’t have many options. In the physical world, investors usually turn to gold as a means of volatility protection, however in the cryptocurrency world, there really isn’t a cryptocurrency that we can really rely on that is stable and doesn’t involve a third party.
Whether you are receiving money from third party, a retailer receiving payments in crypto, or simply storing value you want to ensure that your currency is not losing value. BitCash Dollar secures the value of BitCash for the short, medium, and long term, thus making it easier to integrate into a trustworthy financial system.
How do both BitCash and BitCash Dollar exist?
With the new BitCash stable feature, there are now two currencies stored on the blockchain and there are also two currency accounts in the wallet.
One account is the BitCash account and the other is the BitCash Dollar account. The BitCash Dollar account has its own address with “dollar@” in front of the nickname or address. So for e.g. dollar@CoachCryptos would send to the BitCash Dollar account and @CoachCryptos to the BitCash account. Also, there will be two send functions, one function to send from your BitCash account and one to send from your BitCash Dollar account.
- BitCash → BitCash
- BitCash → BitCash Dollar
- BitCash Dollar → BitCash
- BitCash Dollar → BitCash Dollar
How does the BitCash Stable feature work?
Now assume the date is now 1 May 2019 and the price per BitCash coin has dropped to 0.05 US dollars. If you were to then send the coins from the BitCash Dollar account ($500 USD) back to the BitCash account, you would get 10,000 BitCash coins back. So the amount in BitCash is now 10,000 instead of 5,000. But the value in USD is still $500. By holding your BitCash in the BitCash Dollar account the value will stay the same. Keep in mind, you can send the money from one BitCash Dollar account to another Dollar account. You can make payments in BitCash Dollars directly and there will be no price risk for the merchant in this scenario.
Is BitCash Dollar backed by the US Dollar?
BitCash Dollar does not function like other Stable Coins in the cryptocurrency space. It is NOT backed by the US Dollar. BitCash Dollar is backed by the current price of BitCash and uses that price to stabilize your BitCash Dollar value.
How is the price determined?
Every node has a list of valid public keys. Price information is only valid if it is signed by a private key which belongs to one of the known public keys. Every node has a built-in list of servers to check and try to pull price information from. And it can also download an updated list of price servers. To generate a new block means to collect 3 different signed and up-to-date price information from the price servers. We provide a simple RPC command for the exchanges to provide signed price information. For the exchanges to provide a signed price information is very simple and can be done with an easy script which calls our coin daemon to sign the price information. We also run a few price servers. Every node can check that indeed the price information is valid and is not manipulated and is signed by one of the price servers. It can also check that it is not an outdated price information. The system is very simple and flexible. And most importantly it already works. The stable coin version is already fully functional.
The max supply of BitCash is currently listed at 100,000,000. What will happen to the max supply with the integration of the BitCash Stable feature?
Once the Stable Feature is live, the max supply will no longer be limited.
What risks will a holder of BitCash face?
There are some implications for the holders of BitCash because the supply of BitCash will no longer be fixed. If the price of BitCash goes up and somebody sends BitCash Dollar back to BitCash, the overall supply would shrink. However, this works the other way around too. If the price of BitCash goes down, then the supply of BitCash would go up. Generally speaking, the holders of BitCash coin would take more price risk than holders of BitCash Dollar.
What risks will a holder of BitCash Dollar face?
The only risk which the holder of the BitCash Dollar has is low trading volume/lack of buyers. If the price of BitCash drops and they send the BitCash Dollars back to a BitCash account, they may not be able to find enough buyers to sell all of the coins at once. The only option is to transfer back smaller quantities which they can sell immediately. The holders of BitCash have a leverage effect in both directions. If the price goes up, it will go up much faster because of the shrinking supply, but when the price goes down it will go down faster because of the increasing supply. So the holders of the regular BitCash take all the risk so that the holders of the BitCash Dollars can have a nearly risk free investment. However, because the holders of BitCash take on more risk, they will be rewarded big time, when buyers float the market and want to buy BitCash and the supply shrinks.
What stage is the BitCash Stable currently in?
BitCash is currently in the testing stage and we encourage you to come give it a try: https://wallet.choosebitcash.com/downloads/bitcashstable-setup.exe
If you are interested in learning more please connect with us in the links below.
BitCash Official Links:
Website — https://www.choosebitcash.com/
Discord — https://discordapp.com/invite/7P4YcXU
Twitter — https://twitter.com/ChooseBitCash
Bitcointalk ANN — https://bitcointalk.org/index.php?topic=5106123.0
Telegram — https://t.me/chooseBitCash