In our view, BTC is the only digital asset that should be used in the insurance backing of HBD, since it is the only one that has no VC, no seed round, no ICO, no company and no CEO behind it. Making it actually decentralised, and therefore outside of the reach of regulators. HBD has the opportunity to hold this status too and so we think only digital assets outside of the purview of regulators should be used in its insurance backing. this is one of the things that sets it completely apart from existing stable coins.
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This speaks to so many different levels of the industry and screams about the opportunity that is being presented here.
It is one of the reasons when I formulate my thoughts, I try to envision some of what you guys are building (along with DLUX). Starting with that mindset from the ground up is vital.
Certain things have to be in a single wallet or within the control of a few but we should strive to spread things out as much as possible.
One aspect of what I am toying with will require a bit of application centralization but can be negated by the software being open source and other "front ends" being opened.
Things like that can have people playing whack-a-mole when tied to a decentralized back end.
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Here's my quick idea tapped out on my phone but needing more work.
This is indicative of my thinking on how to decentralise what I'm doing with @v4vapp.
Bitcoin multi sig contracts are very limited. They form the basis of the entire lightning network so I've come to understand them.
I agree with comments elsewhere that trying to use 20 witnesses to one wallet would be a nightmare and as they go in and out of consensus you can't change their keys.
I rather see a growing collection of wallets with a manageable numbet of custodians.
This spreads risk and means we can have multiple custodians.
A lightning node is basically a Bitcoin account with shared ownership of multiple multisig wallets. But there's no way to run a lightning node without 100% power over it.
The only thing I can say about that is we are dealing way above my knowledge level. I have not the slightest idea of how to make it secure if this path is chosen. Fortunately there are those around here who grasp this stuff fully.
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So part of the challenge is to insure HBD in the most decentalized way as possible. Decentralize the insurance with a decentralized asset; decentralize the approvals; decentralize the verifications; etc. This is how I'm understanding the proposal.
While HBD could be partially insured by ETH or BNB (the other top-ranked cryptocurrencies), both are centralized to a high degree. If HBD is going to be partially insured, BTC is pretty much the only asset to use.
Whatever centralization we encounter will be done at the lowest level possible, and it will be minimal. This may not be avoiadable, but it would be worse if an asset that is not BTC is used t partially insure HBD.
This is definitely an ambitious undertaking, to partially insure a decentralized stablecoin such as HBD with the decentralized asset that BTC is known to be (at least relative to altcoins). If we can prove that this can be done in a decentralized manner, this would truly be ground-breaking.
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Fully agree with this 👍