As you perhaps have noticed, I am concerned about price stability of cryptocurrencies. PPC, or Bitcoin, will only succeed as true currencies if the wild price swings are parts of the pasts. (I don’t mean “price stability” must be necessarily 1:1 to the dollar or euro, but for example, to pay your rent or your food you should be able to pay every month approximately the same amount in PPC.)
One way to achieve this is “backing” the currency with real good of services. But a central bank backing it with gold or silver would not be exactly the “crypto’s way”.
So what I thought of is the following: Every merchant who offers a good or service for a fixed price of PPC for at least one day can be considered a “backer” of Peercoin.
The idea is now to incentive this kind of backing, and do it in a descentralized way.
Basically, you can do this with every e-commerce/marketplace platform like a hypothetical “e-bay” for Peercoin. They can offer a special kind of “ad” to merchants: the “Peercoin Backer ad”. The merchant must sign a contract to maintain the fixed price for at least one day or more if he wants, and cannot delete the ad. When he accepts this, he will be shown with the status of a “Peercoin backer” and gets compensations for this status.
If the merchant receives an offer during a downward PPC price movement and refuses to sell to that price, he would get a negative reputation from the buyer (or from the platform). (Also, often an offer is legally enforceable in many countries if the buyer wants).
On the other hand, merchants should receive a good compensation when “backing” Peercoin with this kind of ads. For example, they could get listed more prominently, with a “Peercoin Backer barnstar”, can post offers for no fees etc. Also, merchants can control their risk if they limit the stock of the products they sell. And “Peercoin fans” should be likely to buy more from Peercoin backers than from non-backers. So it should be attractive for merchants to try this kind of offer out, at least for a fraction of their offers.
There can be also a “Peercoin backer’s” category system: You begin as a “Bronze Backer” with your first ad with a fixed PPC price for a day, and when you have sold many items you promote to a “Silver Backer”, and when you are selling regularly and maintain your prices even in crashs you become a “Gold backer” and so on.
Also, there could be “advanced backing techniques”: For example, your price can track the PPC price evolution at the main exchanges against a fiat currency (e.g. dollar) like at LocalBitcoins or BitPay, but only if PPC price moves up. If PPC price moves down and the price for your good would normally move up, you can opt that you want to “back” Peercoin for a day or some days maintaining the same price.
So in the end a economy of “Peercoin backers” could evolve and the currency would be the more stable, the more backers there are.
This idea is obviously not Peercoin-specific, but I think it could be work well with Peercoin because of the flexible money supply model and a community oriented in sustainability.
What do you think? Is someone perhaps even planning a e-commerce platform for PPC to try this out?