New York State Approves Two Dollar-based Cryptocurrencies (engadget.com)

Today, New York approved the first digital currencies that are tied to the US dollar, called "stablecoins." From a report: These cryptocurrencies avoid the price volatility of their brethren by being pegged to stable assets. The digital currencies in question, from Gemini Trust Company and Paxos Trust Company, are available to trade on their respective exchanges. The Winklevoss twins, who rose to fame with a lawsuit suing Mark Zuckerberg for stealing the idea for Facebook from them, have become major players in the cryptocurrency world. They are behind Gemini Trust Company. The currency is pegged to the US dollar on a one-to-one basis; the company will hold US currency that corresponds with all issued Gemini dollars at a bank eligible for the FDIC's pass through insurance.

Comments

Re: Aren't they all dollar-based?

[kenh]

There's a difference between 'tied to the dollar' and 'dollar denominated'.

'Tied to the dollar' means the winkle-crypto-coins will forever be worth one dollar, 'dollar denominated' means as the value fluctuates it's value in dollars rises and falls, encouraging speculation.

There will be no valuation fluctuation in Winkle-crypto-coins, no incentive to buy them as an investment, unlike bitcoins.

A new kind of counterfeiting?

[GameboyRMH]

A 51% attack against this cryptocurrency would be a direct substitute for counterfeiting US dollars.

Still, the incredible inefficiency of a blockchain makes it far too inefficient to justify its use at any meaningful scale. Visa has a digital currency that is 1:1 with the US dollar, and it's a helluva lot more efficient.