While looking into my crystal ball I have attempted to divine the future. While that statement is meant to be somewhat comical its something we all do. I have been a bitcoiner since the price was pre-double digit. More and more I am coming to the conclusion that Bitcoin is not the answer. There are many people (including myself) who are very proud of what Bitcoin and the Bitcoin community have done. My great concern however is that there are a majority of Bitcoiners who have their eyes closed to the reality of the situation which Bitcoin finds itself in.
Some of the difficulties have simple solutions but the Dev team for whatever reason is being slow to address them. Other solutions are not so simple and provide serious risk to BTC itself. I am going to leave aside here the question of mining which has its own problems. Instead I want to focus on the most obvious problem, adoption.
Those of us that have a background in economics, or who have been 'in the game' a while understand the supposed price barrier problem which most people have. They believe either that you have to purchase an entire BTC or that by purchasing BTC first movers are undoly rewarded. It does not matter what the truth is. This is a perception problem, and telling people "Those people are being rewarded for their risk as early adopters" does not solve this problem.
Then there is the "lost coin" problem. There are various guesstimates about the total number of lost coins. What we know at this point in time is that there are a lot. Yes the code can be modified to solve this problem. As is however the lost coin problem is much bigger than anyone is admitting. I suggest people here look up the different numbers provided and start doing the math between the total number of available BTC and the population of the planet.
Generic Tokens
What I am looking for, and what I think will truly mark the beginning of mass adoption is a phone wallet like Blockchain.info but which is plug and play for newly created localized tokens (I hate calling them coins). It would be a series of apps and programs which are generic cut and paste new name of token here.
*Side note: Lets not forget that Bitcoin is an alpha product.
The way I see cryptocurrencies moving forward is through efforts to create localized currencies. The currency would be issued locally. By local I mean nothing larger scale than a county level.
There are several possible platforms and models which can be used to carryout what is proposed below. Before I start getting flamed I want the reader to understand that I have 10+ years of alt/community currency behind me. The recommendation here is not the only way to carry out the principles proposed here. It is only the best way in my own personal opinion to create wider and faster adoption. There are problems involved in the system proposed. There are ways around these problems. Further I am going to use NXT in the model because it is the only thing that exists at this moment in time that is functional.
Western County in state X decides to create a new community currency for the county. This can either be done by (ewww) the county government, or a private organization. Western County Tokens are then created with an exchange rate of $0.01: 1 Quant (Satoshi). Enough WCT are created to cover the per capita income for a 2 month time frame. These tokens are held in Trust in a public address.
Western County Token Trust (WCTT) will act as a payment processor. Providing inexpensive tools merchants can be charged a much lower transaction fee with minimal cost, and no yearly renewal fee. Offering a merchant a 1% to .5% fee provides incentive for businesses to accept the token. Thus allowing businesses to give token holders discounts.
Southwestern County has also created a Token system and the two have garnered enough user base that the the different users in the two counties want to be able to use the same token. The two Trusts then meet and discuss merging the Tokens into a single Token. Token X is then created based on the average per capita income of both counties for 1 month +20% (A safety margin).
Every so often cities, towns, counties will decided to merge their tokens with other tokens. In some cases the mergers will be immediate neighbors. In some cases the merger will take place with communities in completely different State's or Countries.
Caution to Trusts.
There will come a point in each tokens life cycle where the trust becomes irrelevant. This is because at some point merchants, employees, customers no longer want to do business in dollars. These trust can issue Tokens until they run out. However their primary purpose is as an exchange service. Because of this the Trusts will need to decide what they are going to do once users begin to rely more heavily on the token itself rather than its exchange value.
Solution to inflation
One possible benefit to the token system as proposed here is its ability to fight inflation. Assume an average inflation rate of 5% per year. A way of countering inflation is for the Trust to destroy 5% of all tokens that are taken in each year. This adds to the tokens attractiveness as users can be assured that the tokens they hold will not loose value. This can be done either manually as tokens are brought in. Or it can be done automatically in the code each time a transaction is preformed a bit of the tokens are destroyed.
Pegged or Not?
There are those who might question pegging the local currency to the dollar. Regardless of what the price the quant is pegged to there will probably be a parallel market. As this market grows merchants will more and more want to hold use these tokens in the open market rather than exchange them with the Trust. At some point the Trust will need to decide whether or not to remain pegged to the dollar.
Merchant Tokens
http://en.wikipedia.org/wiki/WIR_Bank
There is also the ability for these Trusts to create special tokens for merchant to merchant transactions. This system would be similar to the WIR Bank and allow merchants to operate beyond the local economy.
There is more to be added here so feel free to contribute your idea's and refine the concept.
Pegging and Unpegging.
One of the greatest problem with regional crypto's today is lack of infrastructure. Because merchants cannot easily translate these crypto's into real goods growth is retarded.
