We are so used to money issued by government that constantly loses its value it can be hard to imagine money being any other way. In fact there are many ways to create money. Here are the 4 essentials to understanding how RedPIll works.
1. RedPill money works on your smart phone.
2. Your money is securely stored on the Waves blockchain.
3. Like all money, people give RedPill money its value.
4. Because the best money is stable money, the intention is for Redpill to be pegged to the price of gold so that 1,000 RedPill = 1 oz of gold.
In more detail:
Smart Phone Shopping
In China 15 million people regularly pay by scanning a QR code with their smartphone. By 2023 it is estimated there will be 1.3 billion mobile payment users worldwide. RedPill is part of that trend. To pay with RedPill one simply opens the Waves app on your phone (or desktop) and scan the QR code that the person you are paying has provided. You enter the amount to pay and press send. The payment is done in seconds and both parties can see that RedPIll have been transferred. You pay a small fee (about NZD 2 cents) to the Waves Exchange for making the transaction for you. This means you need to keep a small amount of the Waves token in your wallet to pay for the transfer.
Decentralised
When you may payments in NZ dollars with a credit or debit card you rely on thirds parties such as the card processor and your bank to make the transaction. In New Zealand money in the bank is open to confiscation if the bank gets into trouble (bail in). With RedPill, the money you own is under your control. Your balance is recorded on the Waves blockchain.
A blockchain is a way of record keeping where you do not need to trust anyone. This is because the record of how much you hold in your account is recorded on multiple ledgers. If someone tries to cheat by altering the amount they own on any ledger it will be rejected by the other ledgers who agree with each other as to the person’s balance. If the Waves organisation went bust its blockchain, and hence your RedPill would still be recorded on these ledgers.
The invention of the blockchain in 2008 enable digital money like RedPIll to be held without relying on any centralised control.
Money Value
We may have gone through life never giving a second thought to what gives money its value. Why should we? All we want to know is that we have money we can use. Dig a little deeper and we find that how money has value is actually quite important as well as empowering.
All money has value because of one thing – people give it value. It is not government or banks that give money its value. It is people who collectively agree that a certain currency has value. This little known but basic fact is easily shown.
- Governments cannot impose money people don’t agree with. In 1789 revolutionary France the government tried to impose Assignats on the population. People refused to use them, even on pain of death.
- When people no longer believe in a currency it loses its value. This is called hyperinflation. The loss of confidence usually comes from the government printing too much money. When hyperinflation takes place there is nothing a government can do to restore value.
- The 2009 creation of the first digital currency, Bitcoin showed how people can create value with no central authority. The value people gave the new money was initially small. On May 22, 2010, now known as Bitcoin Pizza Day, Laszlo Hanyecz agreed to pay 10,000 Bitcoins for two delivered Papa John's pizzas. Today Bitcoin trades at around NZD 16,000 each! No one gives Bitcoin its value except people.
Gold-Pegged Money
As people give value to all currencies, RedPill is no different. RedPill operates as money because people decide to give it value. But unlike the price of the NZ dollar or Bitcoin which change, RedPill money is designed to have medium and long term stability by its value being pegged to gold.
Good money has always been stable money so that you know it will buy the same goods in 5,10 or 30 years’ time as it does today. Historically stable money is associated with extended periods of prosperity. Because money transactions are fair the periods of stable money are also associated with greater equality and social justice.
Stable money depends upon gold. Because the value of gold has been relatively stable for thousands of years, money that pegs its value to gold is also stable. The intention is for 1,000 RedPill to equal 1 ounce of gold.
The way RedPill aims to keep its value joined to gold is through what is called a “passive peg”. Passive pegs are as old as the value of gold itself. Because the best money is stable money people have for centuries kept gold at a stable value. The passive peg is built upon people’s need and expectation. Besides gold itself other examples of passive pegs include:
- Gold Loan Bonds – in 1923 Germany people kept the value of Gold Loan Bonds at a stable value even though they had no more collateral backing them than the hyper-inflating mark.
- Tether – Tether is a digital currency designed to be pegged with the US dollar. The peg is primarily passive as the Tether organisation does not have enough US dollars to back all the Tether coins in circulation.
For the technically minded this paper covers different peg mechanisms in more detail.
1. RedPill money works on your smart phone.
2. Your money is securely stored on the Waves blockchain.
3. Like all money, people give RedPill money its value.
4. Because the best money is stable money, the intention is for Redpill to be pegged to the price of gold so that 1,000 RedPill = 1 oz of gold.
In more detail:
Smart Phone Shopping
In China 15 million people regularly pay by scanning a QR code with their smartphone. By 2023 it is estimated there will be 1.3 billion mobile payment users worldwide. RedPill is part of that trend. To pay with RedPill one simply opens the Waves app on your phone (or desktop) and scan the QR code that the person you are paying has provided. You enter the amount to pay and press send. The payment is done in seconds and both parties can see that RedPIll have been transferred. You pay a small fee (about NZD 2 cents) to the Waves Exchange for making the transaction for you. This means you need to keep a small amount of the Waves token in your wallet to pay for the transfer.
Decentralised
When you may payments in NZ dollars with a credit or debit card you rely on thirds parties such as the card processor and your bank to make the transaction. In New Zealand money in the bank is open to confiscation if the bank gets into trouble (bail in). With RedPill, the money you own is under your control. Your balance is recorded on the Waves blockchain.
A blockchain is a way of record keeping where you do not need to trust anyone. This is because the record of how much you hold in your account is recorded on multiple ledgers. If someone tries to cheat by altering the amount they own on any ledger it will be rejected by the other ledgers who agree with each other as to the person’s balance. If the Waves organisation went bust its blockchain, and hence your RedPill would still be recorded on these ledgers.
The invention of the blockchain in 2008 enable digital money like RedPIll to be held without relying on any centralised control.
Money Value
We may have gone through life never giving a second thought to what gives money its value. Why should we? All we want to know is that we have money we can use. Dig a little deeper and we find that how money has value is actually quite important as well as empowering.
All money has value because of one thing – people give it value. It is not government or banks that give money its value. It is people who collectively agree that a certain currency has value. This little known but basic fact is easily shown.
- Governments cannot impose money people don’t agree with. In 1789 revolutionary France the government tried to impose Assignats on the population. People refused to use them, even on pain of death.
- When people no longer believe in a currency it loses its value. This is called hyperinflation. The loss of confidence usually comes from the government printing too much money. When hyperinflation takes place there is nothing a government can do to restore value.
- The 2009 creation of the first digital currency, Bitcoin showed how people can create value with no central authority. The value people gave the new money was initially small. On May 22, 2010, now known as Bitcoin Pizza Day, Laszlo Hanyecz agreed to pay 10,000 Bitcoins for two delivered Papa John's pizzas. Today Bitcoin trades at around NZD 16,000 each! No one gives Bitcoin its value except people.
Gold-Pegged Money
As people give value to all currencies, RedPill is no different. RedPill operates as money because people decide to give it value. But unlike the price of the NZ dollar or Bitcoin which change, RedPill money is designed to have medium and long term stability by its value being pegged to gold.
Good money has always been stable money so that you know it will buy the same goods in 5,10 or 30 years’ time as it does today. Historically stable money is associated with extended periods of prosperity. Because money transactions are fair the periods of stable money are also associated with greater equality and social justice.
Stable money depends upon gold. Because the value of gold has been relatively stable for thousands of years, money that pegs its value to gold is also stable. The intention is for 1,000 RedPill to equal 1 ounce of gold.
The way RedPill aims to keep its value joined to gold is through what is called a “passive peg”. Passive pegs are as old as the value of gold itself. Because the best money is stable money people have for centuries kept gold at a stable value. The passive peg is built upon people’s need and expectation. Besides gold itself other examples of passive pegs include:
- Gold Loan Bonds – in 1923 Germany people kept the value of Gold Loan Bonds at a stable value even though they had no more collateral backing them than the hyper-inflating mark.
- Tether – Tether is a digital currency designed to be pegged with the US dollar. The peg is primarily passive as the Tether organisation does not have enough US dollars to back all the Tether coins in circulation.
For the technically minded this paper covers different peg mechanisms in more detail.
| redpill_-_four_ways_to_achieve_price_parity_in_financial_instruments.pdf |