Phoenix: New Digital Currency With Intrinsic Value
- Posted on Jul 6, 2017
In developing Phoenix Digital Currency, there was a goal to break with tradition in currency but in a way that was practically realisable. Bitcoin was a step in the right direction, however, at Phoenix Digital Currency feel we can take innovation further. In the world of enterprise software, it has become increasingly common to look at the traditional way of doing things and then upsetting the apple cart. Take Amazon, eBay, Uber or any number of other new tech startups as prime examples. They each looked at how their respective market segments were doing things, then decided to replace it with something new. In many cases, these companies then went on to dominate the marketplace.
Bitcoin opened the eyes of the world to the potential that currency was the same thing, a commodity which could be designed, marketed and deployed differently than envisioned by governments and central banks. Phoenix Digital Currency is taking this to another level.
Phoenix Digital Currency was born out of disillusionment with the current economic system. For centuries we have followed the same path, the same economic model and while it has helped us build our societies, the cycle of boom-and-bust is ever present. Nations follow a standard trajectory of incremental growth, followed by a spectacular implosion that either induces revolution or imperial ambitions as a means to correct the problem. Each time though, they adopt the same economic paradigm and, in time, repeat the mistakes of history.
Phoenix Digital Currency is the first step in what is hoped to be a path out of debt for the entire planet within our lifetimes. Behind the scenes is an an economic research and development program which explores practically realisable models for future economic systems. Just as with enterprise software development, there is no fear of throwing everything out and replacing it with a system better suited to the needs of the time. For now though, let’s focus on Phoenix Digital Currency as it is today and how it works.
The Basics – Phoenix Digital Currency
Phoenix Digital Currency places strict limits on the valuation of its coins. They have an intrinsic value which tracks the market value of the Dollar, although this is subject to the Dollar not losing more than 5% of it valuation with respect to 5 major keypairs in the FX market. If this occurs Phoenix Digital Currency has fall back mechanisms to retain its value and more can be read about this here. The market valuation of Phoenix Digital Currency is fixed between $0.90 and $1.10. These rules are implemented through agreements between Phoenix Digital Currency’s steering group, exchanges, general philosophy, user education and enforced by technological means.
The bottom line on this is that Phoenix Digital Currency has an obligation to protect the value stored in the system by its user base. Its not that we outright reject the principle of market forces solely determining currency valuation, its that we feel this ignores the intrinsic worth captured in currency for the work it has done in building an economy. The idea that current demand can retrospectively devalue the entire history of a currency seems a little preposterous. To us, the current economic system lacks a mechanism to retain the added value a currency brought to the market throughout its lifetime and how it assisted in building the value in foreign currencies and markets.
Phoenix Digital Currency achieves this because it exists outside of the central bank economic system. It has all the benefits of a private banking system, yet is completely open and accessible 24/7 anywhere in the world. As long as your capital is within the Phoenix Digital Currency network it is thus safe from devaluation providing the freedom to cash out, at leisure, in the currency offering the best rates. This makes Phoenix Digital Currency a tempting alternative route in FX trading and long term storage of capital reserves. Capital within the network will grow in value alongside the dollar, however, is insulated against events such as flash crashes, long term devaluation, etc. In this respect, Phoenix Digital Currency straddles the line between a fiat economy and the former gold standard, providing a much need economic backbone to the global economy. Thinking of Phoenix Digital Currency as a globally accessible, anonymous, Fort Knox for fiat economies would be fairly accurate.
One of the major issues identified with services such as Bitcoin was theft. Employing advanced money laundering techniques large scale thefts, never before seen in such scale, has become a common occurrence. Phoenix Digital Currency resolves this thorny issue by providing coins with a the digital equivalent of a serial number. Coins stolen, as the result of a breach, or other illegal activity, can be recovered. While users and even their locations are anonymous, coins are not and unlike Bitcoin where complex analysis is required to trace the flow of outputs, coins are always simply right there. It will take some time for coin recovery to be fully activated on the network, as a global process of working with law enforcement in many jurisdictions must be implemented. However, when fully established, heists of exchanges, business and personal accounts will be a thing of the past.
End users access the Phoenix Digital Currency network via client software in a similar fashion to Bitcoin. The reference implementation of this software is called ‘Phoenix Core’. Common themes such as the mining of blocks (transaction processing) are also present, albeit somewhat modified. As Phoenix Digital Currency employs different techniques to manage inflation/devaluation, we were free to lower the proof-of-work requirements ensuring that even home users can mine blocks on computers. Transaction fees are fixed at one cent per coin transfer or change operation and are processed in batches of 100 generating $1 (1 HUNHOL/100 HOL in Phoenix Digital Currency).
Because of the difference in paradigms, it is difficult to do a direct comparison but if we assume that each Bitcoin transaction is about 10 Phoenix Digital Currency transactions, daily revenue at Bitcoin’s current level of transactions would be around $29000 compared with Bitcoin’s estimated daily revenue of $87000-$290000. This may seem fairly low, but when we consider that the cost of Bitcoin mining per day is an estimated $1.2 million, we can see that until Bitcoin doubles in value to around $5000 mining is unprofitable. While transaction fees are insufficient to develop a business, they are sufficient to encourage the average home user to make a few dollars. In this respect, transaction fees can been viewed as an analogue to a faucet in the world of Bitcoin and are allocated randomly. The really good part of this is reducing the temptation to centralise hardware and to construct mining pools. Keeping this open to the home user and decentralised is best for everyone.
Block rewards are based upon demand statistics from the exchanges, remaining capacity on the network and are thus variable and indeterminate. As Phoenix Digital Currency very much targets large funds and large fund transfers, these block rewards could be substantial. Its a bit of a jackpot/lottery deal with block rewards which makes it quite exciting, especially as the network grows and sees uses in areas such as FX trading which has upwards of $5 trillion a day in volume passing through its systems.
Again, block rewards are randomly allocated through a software voting processing. If required at some point, we may introduce digital keys for clients to access the network and ensure that codebase upholds certain principles. This will ensure that home users reap the rewards, rather than the network being centralised by groups employing ASICs, etc. Block rewards are not the creation of currency on the network, they are the creation of network capacity for when those coins are sold at an exchange, or even used to purchase goods. The act of coin creation does not devalue the currency as they are merely placeholders for value to enter the network at some point.
Now that you understand the basics, take a tour of the site to understand more about the technology and Phoenix Digital Currency. Visit Here.