How Alt Coin Works in the US
If you’ve been reading the other pages on this site, you may have some questions about how alt coin works in the US. That’s completely understandable. Most people don’t realize how the current money system works, so wrapping your head around a digital currency system takes time.
Here’s the short answer:
eQuid allows private companies to open for business without needing a bank loan or venture capital. They must establish a mission in line with eQuid’s mission to create jobs and preserve the planet, and build up support for their mission among eQuid members (or attract new members). Once they meet a threshold of support, they will be able to begin working towards their mission, and draw a paycheck for that work from the coin they have created.
If members of the eQuid network are interested in supporting that mission and want to hold that coin as an investment, they can buy that coin. Or if members join that company, they can earn that coin in exchange for meaningful work. Once members have coins in an online account, they can use them to freely buy goods and services from and sell goods and services to any other members of the eQuid network without significant transaction fees. That’s a part of how alt coin works in the US.
Here’s the long answer:
However, that’s just the start. Let’s dig deeper to fully explore how alt coin works in the US, develop a better understanding of the current money system, and understand all the buzz around digital currency.
First, let’s start with what eQuid is not. It’s not a bartering group. While bartering has some benefits, most people who participate in barter groups find that eventually someone ends up with a surplus of goods for which there is no bartering demand.
eQuid is a platform that uses existing digital currency technology, as pioneered by Bitcoin, to make peer-to-peer financial transactions easy and secure and to facilitate the creation of new currencies that can be used like cash to buy and sell items.
For the end user, the experience is as easy as using a debit card that electronically draws funds from an account.
The technology behind eQuid
At the center of the eQuid system is a secure ledger built on top of the Stellar protocol. Stellar’s goal is to cut the transaction fees on currency transactions down to fractions of a percent, much less than the typical 2 to 3 percent charged by most banks. In order to do this, Stellar has created a protocol that allows any type of currency system to communicate with any other currency system in an automated process, similar to the early days of email. When email was first introduced, users of one system, like AOL, could only talk to other AOL users. Then a protocol was created to allow all email types to talk to all other email types. Stellar provides this same service, meaning different types of currency can be freely exchanged without massive fees. eQuid uses the Stellar software to operate a trade pool that verifies transactions in a similar manner to the way digital monetary transactions are verified today, but without the large fees the banks take out.
But eQuid provides more than just cheap financial transactions. eQuid creates a platform to create and monitor new currencies, and that is the beauty of the system. But, to better understand how alt coin works in the US, we must talk about Digital currency in layman’s terms.
Digital currency, in layman’s terms
Currency under the eQuid platform can be created in a variety of ways. Check out the currencies page for more examples, but for now, let’s explore how Bitcoin is created. Unique Bitcoins are mined into existence. That means a skilled programmer puts in the time and effort to “find” new Bitcoins, reminiscent of gold miners back in the day. Once the programmer discovers the Bitcoin, he or she owns it, and can use it to buy any goods or services that accept Bitcoins. Unfortunately, there are few retailers who currently accept Bitcoin as payment. So most of the value of Bitcoin in its present form lies in the ability to convert it back to dollars or whatever currency you need.
In the eQuid system, multiple currencies will be established. Instead of mining units of currency into existence, laborers will accomplish other tasks, such as cleaning up public parks in inner cities or teaching computer literacy in Burkina Faso, and earn units of currency into existence and into their own (digital) wallets. The tasks will vary based on the value systems of each currency.
Currencies are created by private businesses with specific intentions like investing in human or natural resources. Check out the starting list of currencies on the currencies page for more on this.
Some currencies might resemble company stocks while others will resemble grants and some will be similar to insurance. The private company is tasked with controlling the quantity and injecting it into the economy in a way that will achieve its primary purpose. For example, the first currency created will be the original eQuid, a currency designed to build a trade infrastructure that creates jobs and helps the environment. This will resemble a stock. Ocean coin, which resembles a grant, invests in infrastructure to ensure we have clean oceans. And dental coin, functioning like insurance, makes it possible for everyone to receive excellent dental care for a nominal monthly payment.
A user might maintain a portfolio of multiple currencies, similar to holding a diversified stock portfolio. The total value of that portfolio can be expressed in its equivalent in dollars, based on the market value of those coins. But instead of having to sell stocks in order to get a form of currency usable at most vendors, the coins themselves can be freely traded.
Before you get too freaked out by the concept of currency creation, consider this: U.S. dollars are currently borrowed into existence on the premise that the borrower will create value through production of goods and services that the public will want. Work is accomplished, money is awarded, and everyone is satisfied. The only difference in a currency under the eQuid system is that money may be awarded for inherently un-profitable projects, instead of being limited to profitable, consumer-driven ventures.
However, if a user does not wish to earn them, currencies under the eQuid system can also be bought with other traditional currencies, just as an American could purchase Euros before traveling to France instead of an American moving to France for a job and earning Euros.
Once an eQuid account holder acquires a balance of their preferred eQuid currency, they can use their debit card to buy goods or services from any participating vendor in the eQuid system. But, unlike in a barter-based system, it doesn’t matter if that vendor is only interested in one type of coin, say dental coin, but the account holder only has ocean coin. When the account holder swipes their debit card, the equivalent cost of the object will be deducted from their account, and the vendor will receive the equivalent cost of the object in whatever currency they prefer. The difference will be solved behind the scenes in the digital trading pool without either party playing a part. The ability to immediately conduct transfers between currencies is the core of how alt coin works in the US.
eQuid’s monitoring role
Anyone can start a currency as long as they meet the two criteria set by eQuid.
In order to qualify, a coin creator must (1) use a 10 to 1 pay ratio, which means the highest paid person in the company can’t earn more than 10 times the lowest, and (2) promote actions by the coin that do good for people and the planet.
New coin creators can start small and grow as they build their reputation of delivering on what they promise.
The coin creator sets a budget with specific goals. eQuid will monitor each currency’s performance to make sure coins are being awarded appropriately and goals are being met on time and within budget. If the coin creator is not meeting their obligations, they will be cut off. The coin will remain but may be extracted from the system over time by eQuid. eQuid can buy back coin from the money made through transaction fees.
Account holders can use trading bots to keep their money in motion and keep the value of their deposits stable. Trading bot apps are designed to buy and sell a user’s coins from participating exchanges with the goal of making a bit of money on the trades. Since there are always many transactions taking place in the trade pool, it will be easy to clear transactions and will result in price stability.