U.S. Dollar Reserves Back New Digital Currency
July 14, 2014
A new digital currency has been launched by a Bitcoin luminary that aims to solve the volatility issue that has plagued the decentralized cryptocurrency since its popularity began to soar. Realcoin, a startup based in Santa Monica, Calif., recently unveiled a digital currency backed by the U.S. dollar. The company, co-founded by former child actor and early Bitcoin investor Brock Pierce (The Mighty Ducks, First Kid), said it will use the Bitcoin protocol for transactions, but back realcoins one-to-one with a reserve of greenbacks.
“Unfortunately, there has been confusion for people between the currency called bitcoin and the technology called bitcoin, when they are distinctly different things,” co-founder and CEO Reeve Collins told the Wall Street Journal. “We are digitizing the dollar and giving that digital dollar access to the bitcoin blockchain.”
Because each realcoin is worth one U.S. dollar, the speculation that has contributed to Bitcoin’s popularity and volatility as an investment will be tempered, the company contends. It will maintain a real-time record of all U.S. dollar reserves and the full record will be authenticated by the blockchain.
“Realcoin will be completely transparent, safe, secure and insured,” the company said in a statement. “Every dollar that is held in our reserve will be represented by one coin in circulation and can be redeemed at any time.”