110 sats \ 3 replies \ @Bitman 25 Oct 2023 \ on: Need help with questions for a comparison of bitcoin and local currencies bitcoin
Usually local currencies (LCs) are backed one-to-one by the national currency (in this case the Euro).
So one argument against LCs the Euro gets debased, by printing more money, the spending power of the users goes down just like the holder of the Euro.
This could never happen if people use Bitcoin. If the community adopts Bitcoin instead, this could get really interesting.
BTW when I say LCs are usually 'backed one-to-one by the national currency' this means they usually hold one dollar/Euro in a bank for one local currency dollar/Euro. This is similar as currencies holding gold prior to becoming fiat currencies.
Do you know if this is the model that this LC will work?
Also, what do the LC proposers mean by,
making interest-free credit available, they create an additional cash flow (besides the Euro) that facilitates trade. This provides entrepreneurs with additional liquidity.
Do you know how they propose to do this? The 'besides the Euro' bit confuses me - but that's sometimes easily done with me these days...
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They will give interest-free credit to businesses they select. This local currency will coexist with the Euro and preferable with other currencies as they see it. Also if you want to buy a large amount they won't allow it. They don't want you to speculate with it or save it. It's for spending in the local community and preferable the whole country.
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Yes, it's one-to-one with the Euro, but they're saying they're going to decouple at some point. I wonder what kind of system you have at that point. If you keep value circulating in a local community I guess that would benefit the community. Would it matter if it's a self made local currency (ignoring government attacks and inflating too much)?
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