Bitcoin Cash & Wörgl Experiment

Opinion Post about how Bitcoin Cash can succeed without being affected by the market volatility, in a round-abound way entering the local markets as an accounting system.

If you don't know it yet... few words about The Wörgl Experiment: (1932-1933)

... In 1932, in the midst of the Great Depression, the small town of Wörgl in Austria started a money experiment on July 31, 1932, issuing "Certified Compensation Bills", a form of local currency commonly known as Stamp Scrip, or Freigeld. This was an application of the monetary theories of the economist Silvio Gesell by the town's then-mayor, Michael Unterguggenberger.

The experiment resulted in a growth in employment and meant that local government projects such as new houses, a reservoir, a ski jump and a bridge could all be completed, seeming to defy the depression in the rest of the country. Inflation and deflation are also reputed to have been non-existent for the duration of the experiment.

Despite attracting great interest at the time, including from French Premier Edouard Daladier and the economist Irving Fisher, the "experiment" was terminated by Austria's central bank Oesterreichische Nationalbank on September 1, 1933.

In 2006 milestones were placed, beginning from the railroad station through the downtown, to show this history. In all means this was a great experiment, that demonstrates how useful a debt-free money can be.

Now back to the point, how Bitcoin Cash can succeed?

Bitcoin is a great tool and is still very young, many people don't understand it and the sad part is that a lot of people misunderstand its purpose, they think it is a speculative store of value, dismissing its functionality as money.

Stability is what market needs.

In a highly speculative market, Bitcoin usefulness for payments becomes questionable. We need to void the market volatility and represent Bitcoin as a stable currency for payments, Bitcoin decimals can be a solution, adjustment of Bitcoin into local economy can be made by issuing "Certified Compensation Bills", but in this case the "Compensation Bills" will be nominated in Bitcoin decimal units.

The local entities will need to obtain Bitcoin Cash by depositing / converting their local currency. Afterwards, they will need an app that demonstrates Bitcoin Cash decimal units as their local currency, and can be named as they wish. All users will be able to transact and make payments, onchain without even knowing they are using Bitcoin, their wallet apps can be configured to indicate only the small units as their own local currency. In this case, Bitcoin Cash can be a global protocol for money exchange and payments.

The process will be similar to redenomination* but in reverse, instead of cutting zeros, depositors will get more money.

For 1 EUR, deposit they can get more EUR units each valued at 0.00000100 BCH, but their wallet will indicate it as 1.00 EUR currency, which will no longer be affected by Bitcoin Cash price on speculative exchanges, a deposit to enter the local market, like the "Certified Compensation Bills" in Worgl. If the rate of 1 EUR is 0.0039 BCH, with 1 EUR, the depositor can get 39 EUR, or 390 EUR, depends on where you set the decimal place.

The more people will want to enter the local market, the more deposits will be required creating demand for Bitcoin Cash. The process is similar to "fractional reserve system". When by X amount deposit (fiat), you can get 10X for spending. But without creating a debt. There are trillions of Bitcoin decimal units, all of them can be used to denominate

In the beginning I thought, but, in this case, some rich people can buy everything locally and probably damage local economy. Additional measures may be required to prevent this, conversion rate can be adjusted to avoid imbalanced trades, local state can also set limits, the wallet will be non-custodial, with several regulatory rules to support a smooth economic transition. Wörgl Experiment

This is an incomplete idea, and sure needs addressing more details to make this experiment possible and stable, also to avoid any market manipulation.

*Redenomination is the process of changing the face value of banknotes and coins in circulation. It may be done because inflation has made the currency unit so small that only large denominations of the currency are in circulation.