Tuesday, 23 February 2021

Wrapped Digital Cash Token

This may be an unusual idea, but I started to love it. I don't have resources to implement it on my own, so I want to share it if someone likes it too and decides to create the Wrapped Digital Cash Token.

I was pondering that all the cryptocurrencies I like are very different, but they share the same goal to be a no/low fee decentralized digital cash.

I can't stomach the idea of digital gold, I think it is a ponzi scheme which will fail eventually. I like the smart contract platforms, but I think they are more technological solutions than economic ones and hence they are in a different league.

When it comes to digital cash, it's obvious that increasing adoption would benefit each of the currencies, however they compete where they should cooperate in the emerging and fragile market. For instance, you can see a lot of nano users highlighting that Nano is better digital cash than BCH and they have a point. You can argue that BCH carries the original brand and its mining algorithm more robust and you will have a point too. And these arguments may be applicable to other digital cash coins like DASH or Digibyte and so on.

I am sure that the root cause of the competition is the "investment value" of different coins as their holders are looking for the value appreciation along the increasing adoption. All those coins have something to offer as different technologies, brands and communities, but we often think about it as a zero sum game. If one goes up, others lose and "investors" holding the coins have perceived competing interests.

So, my idea is to create a pool of digital cash currencies and create a common token which combines the value of all of them and then focus on adoption of each of them highlighting individual strength of each of the coins.

The united token can wrap the value of all individual digital cash solutions and hence eliminate the value competition between them. Think about it as ETF of digital currencies, where 1 WDC is equal to x BCH + y Nano + z DGB etc (where x, y and z correspond to the proportion of the coins' supply). The wrapped token will increase liquidity for all participating coins and will bring communities, merchants and other infrastructure together.

I think this is doable through a free market approach by creating a wrapped ETF token on a neutral platform like Ethereum and transparently buying all participating coins into the ETF at the market price. If there is a significant number of investors willing to consolidate their exposure into the digital cash coins through the wrapped token, the value competition between individual coins will be decreasing and the very concept of digital cash will be popularized, bringing more adoption and more value for all participants.

submitted by /u/Money-Sage
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source https://www.reddit.com/r/btc/comments/lq7z47/wrapped_digital_cash_token/

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