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Digital trade coin: towards a more stable digital currency
Alex Lipton1, Thomas Hardjono1, Alex Pentland1
1MIT Connection Science, Massachusetts Institute of Technology, Cambridge, MA, USA.
Abstract:
We study the evolution of ideas related to creation of asset-backed currencies over the last 200 years and argue that recent developments related to distributed ledger technologies and blockchains give asset-backed currencies a new lease of life. We propose a practical mechanism combining novel technological breakthroughs with well-established hedging techniques for building an asset-backed transactional oriented cryptocurrency, which we call the digital trade coin (DTC). We show that in its mature state, the DTC can serve as a much-needed counterpoint to fiat reserve currencies of today.
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