I would like to propose a competing vision to central bank issuance of fiat on the BSV blockchain.
Rather than have central banks control the currency supply, why not have a market-driven supply? Rather than let retail banks create new units of currency in the names of individuals based on their credit scores, why not let individuals create new units of currency themselves and let other individuals decide if they want to accept it based on a publicly available reputation score maintained on the BSV blockchain?
What I am proposing is in accord with the decentralization of power and is superior to the existing system or the proposed central bank driven model presented at the coingeek conference by James in my opinion.
This proposed system seeks to remedy three rather large flaws with the existing central bank managed USD system.
First is the lack of an explicitly defined base unit of measure since the ending of the Breton-woods agreement by Nixon in 1971. Since the ending of that agreement the dollar has been undefinable in objective terms, you can not say what a dollar is, which is a big problem for units of measure. They require objective definitions in order to be common reference points.
Second is the problem of indirect issuance of units of measure, having banks issue new currency in the name of the borrower creates excessive cost and burden. How inefficient would it be to go to central authority every time you wanted to quantify length? Then imagine you are charged 3 percent of all the length you quantify by that centralized authority. Under that circumstance over time, the central authority and those close to it would acquire complete control over length.
Finally, it seeks to restore the link between new currency creation and value production. Under the current system of capital allocation, the link is between the ability to repay in dollars, not in objective value creation to society. This creates a situation where insiders game the system, pumping asset classes to make their own bets come true, using funds to repay loans in dollars and getting greater access to capital without value creation to society.
Capital needs to be allocated based on objective value creation for society not on the ability to extract value from society.
Individuals will use a UI in order to issue tokens themselves. Those tokens will have an objective definition/standard. My preferred standard is a joule of work, but others would be acceptable. It will be a condition of using the system that you agree to the definition of the base unit of measure and that the base unit is to remain a constant and can not be redefined. Whatever is chosen as the standard must have enough potential supply to quantify all potential value creation while remaining a constant. Units of measure must have abundance models. Using scarcity models for units of measure creates undesirable circumstances. Imagine having to stop building your home due to a scarcity of inches, it is equally absurd for trade to be halted due to a scarcity of units of measure for value.
To this point, we have a self-issued token with a socially objective base unit of measure that can not be changed. Now we need a method of verifying the validity of those self-issued tokens. We need a scale to double check measurements with. When it comes to measurements, trust but verify is very much in play. The way that we verify the legitimacy and regulate the supply of units of measure for value is through personal reputation in the form of credit scores.
I suggest a p2p BSV blockchain based reputation keeper where users can set their own limits on thresholds for acceptance of joule token.
Example- I will only accept self-issued joule token from users with the equivalent of a 700 credit score, but I would also be willing to accept self-issued tokens from users with a 600-699 credit score equivalent for 3% off face value, etc.
So now that we have a self-issued unit for the measure of value with an objective base unit of measure and a scale we can put it on to check its validity, we now need to create a mechanism to link it to real-world value production. I suggest the system allow issuers to pledge what they would be willing to redeem their self-issued tokens for. Adding this mechanism ensures that those who are creating the greatest amount of value for others will receive the greatest access to capital and will help to prevent the allocation of capital based on illegitimate extractive gains. Simply because you were able to con someone out of their currency should not entitle you to greater access to capital.
In summary, I am proposing a self-issued token with a socially objective standard with a p2p reputation keeper to verify its authenticity and regulate its supply and the ability to pledge what goods and services you would be willing to redeem your self issued tokens for.