April 1st, 2016
Today we are announcing FiatCoin, a new cryptocurrency that addresses the criticisms of previous cryptocurrencies by employing the best practices of fiat currencies.
Instead of relying on community consensus which can be a lengthy and confusing process, governance is simplified by giving a federation of BankNodes (corporations created by some of the wealthiest families in the US and Europe) complete power to make monetary decisions for you through set of board members they elect. This board will decide when and how much new currency to create, and who to give it to. More on that later.
A Network You Can Trust
FiatCoin wallets have the interesting property that as an individual you can only send money to someone you are physically next to. In order to send FiatCoins elsewhere, just drop by a physical office of a BankNode to deposit your coins. You may then ask politely for the BankNode trust network to relay your FiatCoins to a BankNode on which the receiver has an account and where they may, at the discretion of the BankNode, withdrawal their FiatCoins. Simple!
Positive return investments with NO RISK
Instead of holding your FiatCoin on your behalf, BankNodes lend your coins out at interest (so you don’t just trade your coins for an IOU from the BankNode, you effectively trade them for an IOU on an IOU) and in return, they give you a cut of the interest they charge. So you (and the BankNodes) can earn FiatCoin simply by owning FiatCoin!
But what of the risk that borrowers default and the value of their collateral doesn’t cover the loan? Well, should this get out of hand, the board creates more FiatCoin and uses it to buy bad debt from the BankNodes (that is, itself). This ensures that BankNodes are profittable no matter how incompetently they invest your money.
Now in the interest of full disclosure we should add that since your deposit’s purchasing power will in the long term be decreased in proportion to the amount of FiatCoin printed to cover large defaults, you technically have to pay for those defaults by that loss in purchasing power. So while your retirement savings amount of FiatCoins is at no risk, you won’t actually be able to retire on it anymore as the resulting inflation decreases it’s value.
Also, the board has a policy of constant inflation and this rate is almost always higher than the interest on deposits you so are actually guaranteed to loose value by holding FiatCoin. Not only do your savings lose value, if your wages are denominated in FiatCoin, they too are guaranteed to lose value.
So where does this value go? Of course it doesn’t disappear. It is transferred to those who receive the newly created FiatCoins first and can buy assets at un-inflation adjusted prices. As the new coins are used to buy assets exclusively from the BankNodes themselves and these assets are part of the capital markets, the BankNodes and individuals with most of their wealth in the capital markets will reap huge benefits as they gain the value lost from wages, savings and pensions of everyone else (namely, the poor and middle class).
So there you have it. Who wants in on the pre-sale?