According to a Santa Monica-based startup, it has already produced the first dollar-backed digital currency in the market. If it proves to be thriving, this new currency could possibly exploit bitcoin’s economical and direct payments network while at the same time avoiding substantial volatility.
Realcoin is ready to announce that its digital currency will be supported by a one-to-one fully auditable stores of dollars. The bearer of these realcoins will have the first right to redeem them for subsequent U.S. currency.
The carrier of these aforementioned realcoins will have the right to buy back them for U.S. currency. This should make realcoin much more steady than bitcoin which recently saw an 86-fold increase over the first 11 months of last year which later yielded to a 70 % decline in the following four months. With such volatility having detracted bitcoin’s appeal as a method of payment.
The latest in wave of bitcoin includes added features and architecture to better exchange property and execute contracts without third-party intermediaries. These projects open up bitcoin’s decentralised, peer-to-peer network to a wide array of choices of commercial uses beyond simple transactions denominated in by bitcoins.
Unfortunately, there has been plenty of perplexity for people between the currency of bitcoin and the technology behind in which is considered two distinct different things. Basically, traders are making efforts to move past from the physical currency to the virtual access of the digital dollar using bitcoin blockchain.
The blockchain is a publicly shared register of transaction maintained by a decentralised network of computer owners called ‘miners’, whose machines are kept periodically updated for cyclical rewards in bitcoin. The system was initially constructed to safeguard the integrity of the currency by ensuring bitcoins won’t be double-spent or counterfeited therefore obviating the need for transactions to pass through banks and other crucial third-party intermediary.
A few years following bitcoin’s launch back in 2009, the developers of the newer version of the virtual currency are creating new programmes that uses the blockchain method of validating transactions for different legal arrangements. Hence the digitised property could be exchanged resulting in commercial deals being targeted and executed, all without engaging fee-charging middlemen.
Realcoin will be utilising a Bitcoin 2.0 software protocol known as Mastercoin, which will take digitised information about a specific asset based contract which will embed it into bitcoin transactions. Therefore, the data will be further defined along with the rights attached to real coins.
In making sure realcoins retain their value at one dollar, the company will maintain a real-time record of its present dollar-based reserves which are all held in conservative investments and will be subjected to the blockchain’s confirmation system. Realcoins will later be introduced or removed depending in whether dollars will be redeemed or added.
Realcoins had recently signed with a major banking partner and is seeking deals with other financial institution partners who are seeking leveraged deals with other banks alongside digital currency exchanges and ATM providers in order to become gateways for buying, trading or redeeming realcoins around the world. In creating a global network for people to affordably and quickly exchange claims on the main global reserve currency, it could boost worldwide demand for dollars respectively.
It remains unclear how realcoin will be perceived in countries with capital controls such as Argentina and China whose citizens could utilised it to thwart limits on foreign currency. Realcoin might also be attracting contempt from the currency’s libertarian supporters, who see the independent digital currency as a successor to and not a catalyst of existing government-controlled currencies.
Finally, when asked about such reaction, the manufacturers of Realcoin said that they are not willing to sell bitcoins. They are trying to build a hold of businesses that will take full advantage of this rising payment protocol as well as the currency.