No. The network can regulate the value of its currencies in any manner for which there is consensus. A currency could be pegged to some sort of price index, for instance. But right now everyone lives in a world of government currency, so the degree of stability our currencies possess will be judged by how much they vary in value versus the dominant form of money, which could be the US dollar, Euro or Yuan, depending on the context.
That depends on if you look at NuBits as a blockchain or a protocol. Our blockchain is unlikely to ever become the global reserve currency. However, the protocol, or important elements of it, are much more likely to see broad distribution. My vision isn’t so much that NuBit use will expand and displace central bank money entirely. What is more likely, and much better in terms of societal stability, is that NuBits will continue to grow in use. As they do, central banks will take notice. We have already seen the beginnings of this with David Andolfatto, Vice President of the St. Louis Federal Reserve Bank, having publicly advocated the Federal Reserve implement a dollar pegged cryptocurrency. Being small, NuBits is agile and can evolve quickly. The Federal Reserve has many advantages in this competition, but being agile and moving quickly aren’t among them. That means innovation will come from us. As we create a system that can’t fund war, is radically transparent and doesn’t cause resource misallocation as a result of manipulating the cost of borrowing, that will increase the pressure on central banks to do the same while giving them a tool set to do it. They will have to address these issues to maintain their market share. And so they will.
This should not be interpreted as a promise to shareholders, but rather a vision articulated about how this might proceed, so that people here can coordinate their actions to evoke the scenario. Whether our experiment can proceed in this way is not known at this time, but there is good reason to believe it is possible.
We innovate to create a monetary system that remedies many of the defects of central banks. Being under public pressure to resolve those defects, central banks adopt our innovations. However, they cannot or don’t desire to fully implement all the advantages of our system. As they adopt our innovations, it just gives us attention as the system that is superior. Take the issue of decentralised share ownership, for instance. They probably consider that to be a problem and they won’t decentralise ownership. So Fedcoin gets criticised as a defective version of the real thing (NuBits) by some. Fedcoin could change the rules at any time, whereas surprises are unlikely to come from decentralised NuShare holders. We still have our market because there are still important advantages to NuBits over Fedcoins. We ought to keep in mind how vastly tiny our market share is right now. The US dollar M2 money supply is currently 17 million times what ours is. Reducing that to a mere 1 million times would create windfall profits for us. Any indication from a central bank that we are a center of innovation that central banks are interested in can increase our market share. For that reason, I say to central banks interested in developing Fedcoin: we have completed your implementation and you may have all the source code right here. Just run a find and replace on NuBits to change it to Fedcoin. In all seriousness, if central bank software architects analyze the best technical approach to Fedcoin, they are likely to decide to start with our code base.
Circling back to Sentinelrv’s question about whether we can completely take central banks’ market share, I think that as soon as we begin to take a little market share, central banks will react by trying to adopt our innovations to stop the loss and maintain their own market share. Rather than defeat central banks, we should reinvent them in our own image in this way. We provide a superior example, then watch them become more like us. We won’t get the whole pie, but it will be a good slice, and all the other slices will look more like ours.