The BitCash Stable feature was created to address the problem of price volatility when sending cryptocurrency to a third party, paying retailers, or storing value. The BitCash Stable feature implements a protocol called ‘mint & burn’ that allows for three currencies to exist on a single blockchain and allows users to convert to and from those three currencies. The first currency is BitCash, the cryptocurrency asset that is volatile and can be traded on various cryptocurrency exchanges. The second currency that was introduced in June 2019 is BitCash Dollar, the stable asset pegged to $1 USD. The third currency that will be available mid-November 2019 is BitCash Gold, which is a stable asset pegged to the price of gold.
Mint & Burn
The mint and burn protocol allows for the destruction or burning of the volatile asset or the stable asset to create or mint the opposite asset. So, the cryptocurrency operates in a volatile value and conducts basic cryptocurrency transactions and the stable asset operates in static value and operates as a crypto-backed reserve for the cryptocurrency.
As you can imagine, allowing anyone who has access to the desktop, web, or mobile wallet the ability to mint or burn any of the three currencies at any given moment can have a significant impact on the circulating supply.
For example, as of 1 December 2019 the price per BitCash is $0.10, and on this day you send 5,000 BitCash to your BitCash Dollar account. At that time, you will immediately have 500 BitCash Dollars in your BitCash Dollar account with a value of $500 USD. You can keep the 500 BitCash Dollars for as long as you want, and the value will never change. Now assume the date is now 1 January 2020 and the price per BitCash coin has dropped to $0.05. If you were to then convert the BitCash Dollars (still worth $500 USD) into BitCash, you would get 10,000 BitCash. So, the amount in BitCash is now 10,000 instead of 5,000, but the value in BitCash Dollars is still $500 USD.
In the example above, you would initially burn 5,000 BitCash from the total BitCash supply and mint $500 BitCash Dollars which would be added to the total BitCash Dollar supply.
BitCash has implemented the Monero stealth address concept so balances cannot be viewed. This makes it very important to allow for supply transparency.
We have created a supply and price information webpage to provide our users all the data regarding the BitCash Stable Protocol. On this page you can find:
-Price (Conversion, Gold)
-Supply (BitCash, BitCash Dollar, BitCash Gold)
-Amount of Mined BitCash
-Remaining Amount of BitCash to be Mined
When BitCash originally launched in August of 2018 there was a 100,000,000 max supply. With the implementation of BitCash Stable, there is no longer a max supply. The number 100,000,000 is still significant because this is now the number of BitCash that can ever be mined.
BitCash Dollar Conversion
At the launch of BitCash Dollar in June of 2019, we used one price to convert to and from BitCash to BitCash Dollar. With the understanding that with low liquidity the price of BitCash could easily be manipulated, we used 3 day and 7 day moving averages to calculate the conversion price. During this time, a large holder minted a lot of BitCash Dollar then suppressed the price of BitCash over the time of the moving average and then burned the BitCash Dollar to mint more BitCash because the price dropped. We quickly decided we needed to revamp how we converted to and from BitCash and BitCash Dollar, so we implemented a fork that introduced two conversion prices.
One price is a 7 day average and the other price is the spot price. The lower price of the two prices is utilized to convert BitCash to BitCash Dollar while the higher price allows a user to convert BitCash Dollar back to BitCash.
The purpose of the two price system is to make the price less predictable in order to prevent users from repeatedly burning then minting new BitCash. Also, the new system deters a user from quickly minting/burning whenever there is sudden price hike or dump because it is more advantageous for the price to stabilize before converting.
Once market liquidity increases, we can fork to allow for one spot price for BitCash to BitCash Dollar conversions to ensure that the user can convert at any point in time and trade for an equivalent of $1 USD.
How Does It Work?
BitCash stores 3 price pairs at the end of the block header. Each price pair needs to signed by one of 14 private keys. BitCash checks that all 3 price pairs are signed by different private keys. Each of the 3 price pairs consists of one price which will be used to convert BitCash into BitCash Dollars and another price which will be used to convert BitCash Dollars into BitCash.
BitCash will then take the average of the two prices which are closest together to calculate the effective price for the block. It will calculate one effective price for the exchange from BitCash into BitCash Dollars and one for the exchange from BitCash Dollars into BitCash.
BitCash stores one additional byte with the target currency for every transaction output. Three currencies are supported.
0 = BitCash
1 = BitCash Dollar
2 = BitCash Gold
BitCash checks that the price is converted correctly (using the effective block price) if the transaction inputs are in another currency than the transaction output. All transaction inputs need to have the same currency. The transaction outputs can have different currencies.
BitCash uses two fields to store the value of the transaction output. One stores the value in the currency of the transaction inputs (nValueBitCash). The other stores the value in the currency of the transaction output (nValue). nValue can change until the transaction has been mined into a block. Therefore nValue is not included into the transaction hash.
The BitCash Gold price is retrieved from CoinMarketCap, which uses the formula ‘price_usd / price_xau = price of gold’. The API Call can be found HERE. This price will be stored on the blockchain, as well.
Using BitCash Stable
The BitCash Dollar account has its own address with “dollar@” in front of the nickname or address. So for e.g. dollar@CoachCryptos would send to the BitCash Dollar account and @JohnDoe to the BitCash account. Also, there will be two send functions, one function to send from your BitCash account and one to send from your BitCash Dollar account.
BitCash → BitCash
BitCash → BitCash Dollar
BitCash Dollar → BitCash
BitCash Dollar → BitCash Dollar
BitCash Dollar → BitCash Gold
BitCash Gold→ BitCash
BitCash Gold→ BitCash Dollar
BitCash Gold→ BitCash Gold
BitCash Dollar = $1 USD
BitCash Gold = Price of Gold
BitCash Gold will function very similarly to the BitCash Dollar. The user will put a gold@ in front of your nickname or address to send BitCash or BitCash Dollar over to BitCash Gold account.
You can convert BitCash Dollar into BitCash Gold and vice versa at spot price. No averages will be used, and only one price will apply for both directions. There is also no chance that anyone can manipulate the Gold price to cheat the system. However, if you convert BitCash → BitCash Gold or back, the two prices to convert BitCash → BitCash Dollar will also apply. Essentially, it works like you converted BitCash → BitCash Dollars →BitCash Gold.
You can send BitCash Gold in the same way you would send BitCash or BitCash Dollar. Just select the account from where you want to send in your wallet (BitCash, BitCash Dollar, BitCash Gold). Put a gold@ or dollar@ in front of a BitCash address or nickname to send to a Dollar or Gold account.
Blockchain has the power to truly replace the current financial system because it is permissionless, decentralized, and transparent. Creating BitCash Stable creates a significant decentralized financial system that anyone can take part in. It gives the user the freedom to deal in the volatile crypto markets with BitCash , make secure borderless payments with confidence in price stability using BitCash Dollar, or hold for store of value with BitCash Gold.
We will continue to fine-tune our BitCash Stable protocol. In the meantime visit us in discord and let us know what you think!
BitCash Official Links:
Discord — https://discordapp.com/invite/7P4YcXU
Twitter — https://twitter.com/ChooseBitCash
Bitcointalk ANN — https://bitcointalk.org/index.php?topic=5106123.0
Telegram — https://t.me/chooseBitCash