Decoupling bitAssets from BTS through POW

[testz]

This is wildly out there in terms of ideas and bare with me and a lot of controversial statements follow, but hear me out:

1) POW is the direct conversion of electricity (kWh) into tokens
2) Using BTS as the collateral for bitAssets can lead to a self reinforcing collapse since they two things are intrinsicly linked
3) The price of electricity is relatively stable compared to crypto currencies

Given these assumptions, is it possible to create a kWh token, created by burning N kilowatt-hours through POW, and then to use that token as the collateral backing bitAssets?

We already have BitRUB, RUB today act as energy coin (oil, gas, electricity) so you can start trading today 

[monsterer]

In summary, I have concluded that this idea is pretty much equivalent to having a POW bitshares.

Whether or not a POW bitshares would have any better price stability is another question... If all coins had to be POW burned into existance, supply would have started low (compared to 2B DPOS coins) and given a like for like demand that DPOS bitshares had at its inception I suggest that the price per coin would have been much higher at the time... Whether it would have held value is yet another question, though.

The key problem (for use as collateral) is redeemability in both cases; DPOS tokens and POW tokens cannot be redeemed for the things that created them. Now, if you could redeem DPOS tokens for BTC directly on chain, that might be a different matter, but sadly this is impossible.

[monsterer]

Regarding the OP: As BM already said, just the fact that you have to burn electricity to produce a token doesn't give it a value greater zero. Common POW misconception.

The lack of redeemability means you don't have a value floor from the POW (and probably no ceiling either)... yet 25 BTC of mining power will produce you one block in bitcoin. The relationship is extremely complex.

[Frodo]

This is wildly out there in terms of ideas and bare with me and a lot of controversial statements follow, but hear me out:

1) POW is the direct conversion of electricity (kWh) into tokens
2) Using BTS as the collateral for bitAssets can lead to a self reinforcing collapse since they two things are intrinsicly linked
3) The price of electricity is relatively stable compared to crypto currencies

Given these assumptions, is it possible to create a kWh token, created by burning N kilowatt-hours through POW, and then to use that token as the collateral backing bitAssets?

There is one. It's called Solarcoin. Why not approach the Solarcoin team to get them onto Graphene? I think that could be a start.

They will probably want their own blockchain but maybe KenCode can approach Nick Gogerty and ask if he would be willing to convert Solarcoin to Graphene in the future. The proposal to Nick Gogerty is that you can take the Solarcoin and turn it into a platform to trade carbon credits or whatever they want.

This isn't the first time this idea has been proposed. I think it might very well be technically possible to do a lot, including trade energy. But it is not something Bitshares should specialize in, why not let the community that is focused on that niche specialize in it?

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1802166
https://bitcointalk.org/index.php?topic=429119.0

Solarcoin and the idea of OP are two completely different things. One solarcoin represents 1MWh of solar energy generated. You can claim your solarcoins when it is veryfied that you produced that amount of electricity, but the electricity is NOT being burned via POW.

Regarding the OP: As BM already said, just the fact that you have to burn electricity to produce a token doesn't give it a value greater zero. Common POW misconception.

[monsterer]

The cost to create something has nothing to do with its value.   The best you could hope for was to use mining to put a ceiling on a the value of a token.

Unfortunately, mining is defined in terms of CPU cycles and not KWH.

You can estimate a rough kWh cost per hash. I don't really see the problem with that?

I'm not totally sure about the ceiling - there is still supply and demand to consider; if you are in a rush for kWh tokens and don't have the time to burn them into existance, the open market will drive the prices...

[bytemaster]

Token is backed by BTS, you can directly retrieve BTS.

If bitAsset was backed by the kWh token, you could retrieve the token as well. The argument was that you cannot retrieve the electricity from the kWh token, but that argument also applies directly to BTS.

The cost to create something has nothing to do with its value.   The best you could hope for was to use mining to put a ceiling on a the value of a token.

Unfortunately, mining is defined in terms of CPU cycles and not KWH.

[monsterer]

Token is backed by BTS, you can directly retrieve BTS.

If bitAsset was backed by the kWh token, you could retrieve the token as well. The argument was that you cannot retrieve the electricity from the kWh token, but that argument also applies directly to BTS.

[lakerta06]

In order for an asset to be backed, the collateral backing the asset must be retrievable.  A token cannot be backed by POW as collateral because the electricity cannot be retrieved, its network can only be secured by POW as a recurring cost.

Yet a token can be backed by BTS, even though the bitcoin / fiat used to buy it cannot be retrieved directly either?

Token is backed by BTS, you can directly retrieve BTS.

[monsterer]

In order for an asset to be backed, the collateral backing the asset must be retrievable.  A token cannot be backed by POW as collateral because the electricity cannot be retrieved, its network can only be secured by POW as a recurring cost.

Yet a token can be backed by BTS, even though the bitcoin / fiat used to buy it cannot be retrieved directly either?

[luckybit]

This is wildly out there in terms of ideas and bare with me and a lot of controversial statements follow, but hear me out:

1) POW is the direct conversion of electricity (kWh) into tokens
2) Using BTS as the collateral for bitAssets can lead to a self reinforcing collapse since they two things are intrinsicly linked
3) The price of electricity is relatively stable compared to crypto currencies

Given these assumptions, is it possible to create a kWh token, created by burning N kilowatt-hours through POW, and then to use that token as the collateral backing bitAssets?

There is one. It's called Solarcoin. Why not approach the Solarcoin team to get them onto Graphene? I think that could be a start.

They will probably want their own blockchain but maybe KenCode can approach Nick Gogerty and ask if he would be willing to convert Solarcoin to Graphene in the future. The proposal to Nick Gogerty is that you can take the Solarcoin and turn it into a platform to trade carbon credits or whatever they want.

This isn't the first time this idea has been proposed. I think it might very well be technically possible to do a lot, including trade energy. But it is not something Bitshares should specialize in, why not let the community that is focused on that niche specialize in it?

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1802166
https://bitcointalk.org/index.php?topic=429119.0

[Troglodactyl]

This is wildly out there in terms of ideas and bare with me and a lot of controversial statements follow, but hear me out:

1) POW is the direct conversion of electricity (kWh) into tokens
2) Using BTS as the collateral for bitAssets can lead to a self reinforcing collapse since they two things are intrinsicly linked
3) The price of electricity is relatively stable compared to crypto currencies

Given these assumptions, is it possible to create a kWh token, created by burning N kilowatt-hours through POW, and then to use that token as the collateral backing bitAssets?

In order for an asset to be backed, the collateral backing the asset must be retrievable.  A token cannot be backed by POW as collateral because the electricity cannot be retrieved, its network can only be secured by POW as a recurring cost.

[monsterer]

This is wildly out there in terms of ideas and bare with me and a lot of controversial statements follow, but hear me out:

1) POW is the direct conversion of electricity (kWh) into tokens
2) Using BTS as the collateral for bitAssets can lead to a self reinforcing collapse since they two things are intrinsicly linked
3) The price of electricity is relatively stable compared to crypto currencies

Given these assumptions, is it possible to create a kWh token, created by burning N kilowatt-hours through POW, and then to use that token as the collateral backing bitAssets?