There are like 608 sites now that offer bitcoin coupons.
What's to stop one of these from just making coupons... Kind of like how the feds do it. Its always backed by coin, but if everyone pulls out there wont be enough.
Sure, that's called a "short squeeze". But you can settle in cash. So instead of me giving you your 10 coins i could give you say $1200
No that's called an IOU, like printing money only generating it.
Exactly yes. So a trusted third party can lever up the money supply using IOUs.
The short squeeze occurs if they dont have enough bitcoins to pay all the IOUs. But that's exactly how the current system works with fractional reserve banking.
People got suckered into letting the state hold their gold in return to a gold backed IOU because gold was not divisible into small units and was heavy, then they came in and said "said sorry our bad rather than 28$ being worth an ounce of gold its 35 now" and people sheeply agreed. Then they pushed it further and said "hey we changed our minds.....yea there is no gold behind your money, just trust us its necessary for the economy to thrive, bartering for something that can't be manipulated by us will stunt the economy" And thats how we got off the gold standard.
The reason this wont happen with BTC (besides the fact that we are wiser this time) is that there is no major benefit in trading BTC for a token representing BTC , as the BTC is already easy to carry, send and divide, contrary to gold. In the case that a BTC token system were to be implemented in order to circumvent blockchain problems, the low barriers to entry of competing token systems, and the ability to return to the system the token is backed by with ease (bitcoins) would result in the token system always being highly competitive by nature in order to be adopted by the community. In other words we would agree to use a token system that cancelled transaction fees, but would disagree if it started issuing loans with our BTC; in the case that the system did something we didnt like it would fail (unlike the dollar, you cant decide to not accept the dollar as legal tender, or go and compete with the dollar
