<p>What you are describing can be done on top of Bitcoin itself using <a href="https://www.coinprism.com" rel="nofollow">colored coins</a>.</p>

<p>With colored coins, an issuer would have a reserve in USD, and issue a "USD-coin" per every USD they have in the reserve. They can then accept deposits from people, and give them USD-coins in exchange. They also offer to redeem every USD-coin for an actual USD.</p>

<p>Those coins can then be sent, received and used for payments like "normal" Bitcoins.</p>

<p>Because those USD-coins are backed by a reserve, they can't be minable, and therefore can't live on their own secure Blockchain. This is why using the actual Bitcoin blockchain as the infrastructure combines best of both worlds.</p>

CC BY-SA 3.0
2014-06-05T14:09:46.940Z
One should note that this requires people to trust the issuer as they would a bank, since nothing would really prevent the issuer from running away with all the dollars and leaving everyone with worthless colored coins. One of the benefits of Bitcoin and similar currencies is that you don't need to put such ultimate trust in any one party.
Nate Eldredge
CC BY-SA 3.0
2014-06-05T14:45:56.473Z
Sure, what makes it trusless is also what makes it impossible to peg to another asset, like OP is asking.
Flavien
CC BY-SA 3.0
2014-06-05T10:53:08.650Z
2014-06-05T14:43:06.190Z
2014-06-05T14:43:06.190Z
Flavien
<p>To a certain extant, that's exactly what Ripple and its network are supposed to be: </p>

<p>You "transfer" euros, or dollars, yens, yuan or whatever from one account to the other thru the network, always getting the best exchange rate that is possible at that moment. It has its own currency, the aptly named "ripple", but it's meant more to prevent people abusing the system (i.e. sending US$ 0.01 back and forth to overload it) than to be used as a currency per-se, since an amount of ripples are destroyed with each transaction and never replenished for all possible ripples have already been mined (a contentious point to some people).</p>

<p>I put "transfer" in quotes for technically you're not transfering money, but rather debt - the system works as a gigantic network for people sending "IOU" notes to each other, taking debt in their friend's name, and settling their debts against the IOUs of their lenders. It's really interesting though a bit complicated, has the property of working "with" the current banking system as opposed to "outside" of it - some people see this as an advantage, others as a profound disadvantage :)</p>

<p>Right now it's closed source though its creators claim they'll release the code sometime in the future. I guess due to contractual requirements with the banks this will be difficult to accomplish, nonetheless it's still a very interesting development, and the only distributed currency (as the gateways are distributed, rather than the miners) that's not derived from Nakamoto's original code.</p>

CC BY-SA 3.0
2013-12-30T15:33:49.427Z
2013-12-30T15:33:49.427Z
Joe Pineda
<p>That would be absolutely possible. In fact, there is a cryptocurrency out there called "Hashdollar" which is trying just that. I didn't look into it yet but if you tie the value of the Hashdollar to the US Dollar, you could use the p2p network to make "real" dollar transaction. The problem here is though, who will guarantee for the value of the Hashdollar? The value of Bitcoin is mostly made by market mechanisms but if you tie the value of a crypto currency to the dollar, you would need to have some authority to guarantee for that value and I do not see that happening. </p>

<p>Of course the feds could just come up with their own version of a cryptocurrency (eDollar?) and this might actually happen very soon.</p>

<p>Hashdollar: <a href="https://bitcointalk.org/index.php?topic=368237.20" rel="nofollow">https://bitcointalk.org/index.php?topic=368237.20</a></p>

CC BY-SA 3.0
2013-12-20T22:00:16.240Z
2013-12-29T20:35:11.520Z
2013-12-29T20:35:11.520Z
Mark
<p>Why can't there be a p2p software that works like bitcoin but you load it with dollars?  </p>

<p>Can't something be made that's just p2p dollar transfers and not deal with a speculative new currency and its volatility?</p>

CC BY-SA 3.0
2013-12-18T16:59:40.447Z
No. Dollars are per definition centralized.
Jori
CC BY-SA 3.0
2013-12-22T20:16:32.817Z
Related: http://bitcoin.stackexchange.com/questions/19199/are-there-examples-of-asset-backed-virtual-currencies
Nate Eldredge
CC BY-SA 3.0
2013-12-29T20:52:59.787Z
You mean like Fedcoin?
Kinnard Hockenhull
CC BY-SA 3.0
2014-05-23T16:07:42.813Z
Mazacoin is an official national currency.
Pacerier
<cash><price-volatility>
Can there be dollar version of bitcoin?
George Richardson
# Can there be dollar version of bitcoin?

(Asked by: username_0 on 2013-12-18)

Why can't there be a p2p software that works like bitcoin but you load it with dollars?

Can't something be made that's just p2p dollar transfers and not deal with a speculative new currency and its volatility?

**Tags:** cash, price-volatility

> **Comments:**
> **username_1**: No. Dollars are per definition centralized.  
> **username_2**: Related: http://bitcoin.stackexchange.com/questions/19199/are-there-examples-of-asset-backed-virtual-currencies  
> **username_3**: You mean like Fedcoin?  
> **username_4**: Mazacoin is an official national currency.  

---

## 3 answers

### Answer by username_7 on 2013-12-20. Score: 7 | Accepted answer

That would be absolutely possible. In fact, there is a cryptocurrency out there called "Hashdollar" which is trying just that. I didn't look into it yet but if you tie the value of the Hashdollar to the US Dollar, you could use the p2p network to make "real" dollar transaction. The problem here is though, who will guarantee for the value of the Hashdollar? The value of Bitcoin is mostly made by market mechanisms but if you tie the value of a crypto currency to the dollar, you would need to have some authority to guarantee for that value and I do not see that happening.

Of course the feds could just come up with their own version of a cryptocurrency (eDollar?) and this might actually happen very soon.

Hashdollar: <https://bitcointalk.org/index.php?topic=368237.20>


---

### Answer by username_5 on 2014-06-05. Score: 1

What you are describing can be done on top of Bitcoin itself using [colored coins](https://www.coinprism.com).

With colored coins, an issuer would have a reserve in USD, and issue a "USD-coin" per every USD they have in the reserve. They can then accept deposits from people, and give them USD-coins in exchange. They also offer to redeem every USD-coin for an actual USD.

Those coins can then be sent, received and used for payments like "normal" Bitcoins.

Because those USD-coins are backed by a reserve, they can't be minable, and therefore can't live on their own secure Blockchain. This is why using the actual Bitcoin blockchain as the infrastructure combines best of both worlds.

> **Comments:**
> **username_2**: One should note that this requires people to trust the issuer as they would a bank, since nothing would really prevent the issuer from running away with all the dollars and leaving everyone with worthless colored coins. One of the benefits of Bitcoin and similar currencies is that you don't need to put such ultimate trust in any one party.  
> **username_5**: Sure, what makes it trusless is also what makes it impossible to peg to another asset, like OP is asking.  

---

### Answer by username_6 on 2013-12-30. Score: 1

To a certain extant, that's exactly what Ripple and its network are supposed to be:

You "transfer" euros, or dollars, yens, yuan or whatever from one account to the other thru the network, always getting the best exchange rate that is possible at that moment. It has its own currency, the aptly named "ripple", but it's meant more to prevent people abusing the system (i.e. sending US$ 0.01 back and forth to overload it) than to be used as a currency per-se, since an amount of ripples are destroyed with each transaction and never replenished for all possible ripples have already been mined (a contentious point to some people).

I put "transfer" in quotes for technically you're not transfering money, but rather debt - the system works as a gigantic network for people sending "IOU" notes to each other, taking debt in their friend's name, and settling their debts against the IOUs of their lenders. It's really interesting though a bit complicated, has the property of working "with" the current banking system as opposed to "outside" of it - some people see this as an advantage, others as a profound disadvantage :)

Right now it's closed source though its creators claim they'll release the code sometime in the future. I guess due to contractual requirements with the banks this will be difficult to accomplish, nonetheless it's still a very interesting development, and the only distributed currency (as the gateways are distributed, rather than the miners) that's not derived from Nakamoto's original code.


---

