I was asked a quetion about bitUSD i couldnt give a good answer to. It might have been discussed before but i cant see any info on that.
The question is how does bitUSD fight with the inflation of the real value of USD. In the sence of lest say i have 100 USD i put them into a bank (its 100% secure and safe - lets assume so) on 8.5% per year. So then i get 108.5 USD, but inflation was 10%, so the vaule of my USD after that year is now 97.65 USD.
Now i take 100 USD and buy 100 bitUSD + after a year i get 2.5% (we are taking todays situation), so i get 102.5 bitUSD and excnhage them back into USD + inflation .... so i got less
So what do i miss?
Well for one you can't get 8.5% in a bank on USD really anywhere. The yield you'll get on BitUSD will be better than nearly all banks can offer when the new system (of shorts competing on yield) takes effect.
Your USD can also be seized or confiscated in a bank and they are woefully under collateralised.
So really BitUSD is your best bet if you want to maximise the value of a USD.
However inflation is vastly understated so it's hard for any yield to compensate for the loss of value USD may experience in the medium term, so personally I'm not a fan of holding much value in it. But if you did, BitUSD is probably the place to do it. (Even though it's declining its relatively stable and is still the world reserve currency so will be the most popular for merchants and trade in general till it collapses.)