What Is BaseCoin?
It is a price-stable cryptocurrency that aims to bring to an end the price volatility, which currently plagues the cryptocurrency space.
Why Is Price Stability Necessary?
Price stability in cryptocurrencies is important for a number of reasons. The main reasons are as follows:
Usability As Currency
If the price of cryptocurrencies is stable, it is possible for merchants and consumers to have a predictable measure of value for the goods being exchanged.
Better Value Storage
When someone invests in cryptocurrencies as a store of value, they expect some price stability. Extreme volatility can mean a loss of value if prices decline.
How Does BaseCoin Intend To Stabilize Prices?
Basecoin will stabilize cryptocurrency prices by acting like a central bank. This will be achieved as follows:
Once Basecoin starts trading, the coins will have a fixed value. There will then be fixed consensus rules as to how keep prices within that range.
What Happens When The Price Falls Below The Fix?
If value falls below the set price, consensus is reached to decrease the number of coins in circulation. As a result, the contraction in supply with a higher demand drives the prices back up. The contraction is done by selling bonds to coin holders.
What Happens When The Price Rises Above The Set Price?
When the price of the coins goes above the set price, consensus is reached to increase the number of coins in circulation. This serves to lower its value until it gets to the target price range.
How Is Coin Supply Increased?
The first step is arriving at a consensus on the need to increase coin supply. The second step is to generate more coins in supply then pay bond-holders.
What Will Be The Entry Peg Price?
In the beginning, the price of the Basecoin will be pegged to the prevailing dollar prices. However, as it gets accepted by more people, it will be pegged to the consumer price index.
Who Is Behind BaseCoin?
Basecoin is the brain-child of Nader Al-Naji, Lawrence Diao, and Josh Chen. All the three founders have a background in software engineering, with Nader adding finance expertise to the team.
Who Are The Backers Of Basecoin?
Basecoin has significant venture capital backing. Its key backers include Metastable Capital, Andreessen Horowitz, 1confirmation, Polychain capital and Bain capital ventures.
Will BaseCoin Be A Single Global Currency?
The team doesn’t intend to make Basecoin global, but rather intends to have its value defer from one region to the other. That’s because different regions have different economic realities that might get disrupted by one currency.
Is There A Concrete Case For A Regionalized Currency?
The Basecoin team bases its case for regional value on the Greece case. That’s because part of the reason why Greece is struggling is that the value of the Euro, which is the blanket currency of the Eurozone, does not reflect the economic realities of the people of Greece.
How Can One Be Part Of BaseCoin?
To join the Basecoin project, you can sign up via email, and the team behind this coin will get in touch with you.