Smartcoins have potentially wide uses, but I don't think that fiat-pegged stable currency is the killer app, not least because the mainstream seems unlikely to trust their savings to "stable" pegged currencies backed by inherently volatile collateral (which Nubits has demonstrated so poignantly).
Nubits didn't poignantly demonstrate the problems of inherently volatile collateral. Their product had extremely low collateral that wouldn't have been nearly sufficient even it had been completely stable.
On the contrary as well, I think it shows people are likely to trust a portion of their savings to stable pegged currencies especially if centralized risk factors worsen, considering NBT managed to do 5 figure volumes for years on end with a farcical low/no collateral system and only experienced a mass exodus when people tried to move into the BTC surge.
In parallel as these pegged currencies flounder with poor demand, any non-pegged crypto that sees enough network effect build over time and wins the race toward mainstream usage will also see declining volatility as a result, in turn promoting increased usage, in a self-reinforcing cycle. Therefore the volatility that most people today see as a problem to be fixed ends up fixing itself as adoption grows.
I agree to an extent. The popularity and network effect created by a successful crypto-currency can be phenomenal and doesn't need a lot of development, this is why I was against losing BTSX. The notion that we could lose crypto-currency status and buy more users as the 'what is a new user worth' suggested was absurd. I'm watching the same wrong thinking play out in Steem. Paying for users by share-dropping and hoping your highly illiquid start-up DAC will absorb the cost, (A strategy that has failed a hundred times + in crypto) to compound their error they're share-dropping/awarding stable currency so the size of that burden in dollar terms they've paid to acquire users stays the same even as the share price craters.
(The strategy of paying for users is valid in some business models, not that they have a business model for that matter, but requires funds set aside so that redemptions don't eat directly into the share price.)
Therefore the volatility that most people today see as a problem to be fixed ends up fixing itself as adoption grows. Bitcoin for example continues down that path and is now at new lows in rolling 1 year price volatility, and still probably heading up the early part of its S-curve of adoption. I'm not claiming that Bitcoin is the ultimate victor in the crypto-money competition, only that whatever the victor is will inevitably see volatility fall to levels on par with fiat currencies (and possibly less), although this may take a couple of decades.
I think bitUSD has been an amazing experiment, leading to other cool developments, but unfortunately is probably not the killer app people want it to be. At best it is a stepping stone whose window of opportunity is closing. The crypto creations of central banks when they come in the next few years will directly compete but with a stamp of authority that gives many people comfort. But then eventually pure decentralised global crypto-money will gain enough confidence to make all of these variations obsolete.
I feel the focus ought to be on realising the fuller potential of the Bitshares platform, and defining how the Bitshares technology can be made flexible and useful enough to masses of developers and entrepreneurs to do the job of building killer apps we can't yet imagine. This is Ethereum's promise and I hope Bitshares can carve its own niche in this landscape.
From a merchant POV, Even with volatility at historical lows I believe the vast majority of merchants offering Bitcoin payment options still use BitPay/other to immediately convert to fiat. Their margins are so low that any trade not in their national currency probably needs to be immediately converted or hedged. As a result there is a large market for stable national pegged crypto-currencies like USD or CNY. Given black market trade accounts for 20% of global GDP there's also many businesses that wouldn't want to go through the traditional financial system either but still have their expenses priced in their respective national currencies. (So couldn't stay in a crypto-currency either even if their products are sold in it.)
From a saving POV people still want Gold, Silver and national currency options. SmartCoins have the potential to offer a Swiss Bank on the blockchain type solution. (If centralized risk factors worsen, escalation of war on cash, increased capital controls, negative interest rates, crazy taxes, precious metals ban etc. then the potential for SmartCoins becomes even greater.)
I also see a bright future for crytpo-currencies and see their volatility decreasing over time but for the forseeable future the major national currency and gold markets will make up 99%+ of international business and the first to offer a solution that is effectively decentralized, private, liquid and effectively backed will be extremely successful and BTS is close to being able to offer that.