<p>It is notoriously hard to establish a digital currency derived from Bitcoin that focuses on a specific niche. This has for example been attempted with country specific currencies (e.g. Auroracoin in Iceland,  MazaCoin for the Lakota nation and SpainCoin in Spain, see <a href="http://www.coindesk.com/coindesk-guide-worlds-national-altcoins/" rel="nofollow noreferrer">national altcoins</a>), and industry specific coins (e.g. MaryJanecoin, Titcoin, and PotCoin).</p>

<p>The main issue is that Bitcoin and other more popular altcoins have a much better utility due to broader acceptance, and the newly created coins often immediately get sold for those after an initial hype.</p>

<p>Specifically regarding Banking, banks actually have very different needs than what Bitcoin provides: Their environment is more one of cooperation with known particpants, where a central database would be more of a communication and audit tool rather than one to achieve consensus. This has both allowed Ripple to successfully pursue banking clients with their IOU based network, and has led to a score of banks founding the R3CEV, whose product naturally diverged significantly from Bitcoin's blockchain.</p>

<p>I could see how the banking industry would attempt to resist the adoption of an open blockchain by favoring such a permissioned blockchain. The latter are naturally much more efficient as the decentralization comes at the cost of inefficiency. Unless an open blockchain overwhelms other forms of money, I would expect both to survive.</p>

CC BY-SA 3.0
2016-12-16T14:49:30.690Z
Thanks! I am new to this world and have literally just given myself a super basic, surface level eduction over the past 72 hours. I am trying to make sense of it all. I am going to check out Ripple and R3CEV. Again, many thanks!
Disco
CC BY-SA 3.0
2016-12-16T13:36:03.353Z
2016-12-16T14:54:05.227Z
2016-12-16T14:54:05.227Z
Murch
<p>If Bitcoin were to be used as an alternative, industry-specific banking platform, what would the effect of all 21M bitcoins in circulation be on the dollar/bitcoin exchange rate? Or, would it be better to create some kind of new digital currency specific to that industry while simultaneously creating an exchange for that currency? </p>

CC BY-SA 3.0
2016-12-15T16:21:04.197Z
What do you mean by "industry-specific banking platform"? It's neither industry-specific, nor a platform. It's a currency. Do you mean, if banks started to make bitcoin-denominated payments?
Murch
CC BY-SA 3.0
2016-12-16T12:17:36.303Z
@Murch Traditional currency is essentially industry specific if you view the industry as a country. Then, that currency is traded for goods and services via an exchange with other industries/countries.
Disco
CC BY-SA 3.0
2016-12-16T12:21:48.953Z
@Murch (continued)   So, if we applied that model to the digital model and established a currency that is, at its origin, attempting to establish a means of goods-for-currency exchange within one specific industry, could that work? Or, is it better to rely on an established currency (Bitcoin) which will, one day, run its course. That's not to say that a new currency wouldn't eventually run its course as well.
Disco
<transactions><exchanges><exchange-rate>
Bitcoin/US Dollar Exchange Rates
Disco
# Bitcoin/US Dollar Exchange Rates

(Asked by: username_0 on 2016-12-15)

If Bitcoin were to be used as an alternative, industry-specific banking platform, what would the effect of all 21M bitcoins in circulation be on the dollar/bitcoin exchange rate? Or, would it be better to create some kind of new digital currency specific to that industry while simultaneously creating an exchange for that currency?

**Tags:** transactions, exchanges, exchange-rate

> **Comments:**
> **username_1**: What do you mean by "industry-specific banking platform"? It's neither industry-specific, nor a platform. It's a currency. Do you mean, if banks started to make bitcoin-denominated payments?  
> **username_0**: @username_1 Traditional currency is essentially industry specific if you view the industry as a country. Then, that currency is traded for goods and services via an exchange with other industries/countries.  
> **username_0**: @username_1 (continued)   So, if we applied that model to the digital model and established a currency that is, at its origin, attempting to establish a means of goods-for-currency exchange within one specific industry, could that work? Or, is it better to rely on an established currency (Bitcoin) which will, one day, run its course. That's not to say that a new currency wouldn't eventually run its course as well.  

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## 1 answers

### Answer by username_1 on 2016-12-16. Score: 0 | Accepted answer

It is notoriously hard to establish a digital currency derived from Bitcoin that focuses on a specific niche. This has for example been attempted with country specific currencies (e.g. Auroracoin in Iceland, MazaCoin for the Lakota nation and SpainCoin in Spain, see [national altcoins](http://www.coindesk.com/coindesk-guide-worlds-national-altcoins/)), and industry specific coins (e.g. MaryJanecoin, Titcoin, and PotCoin).

The main issue is that Bitcoin and other more popular altcoins have a much better utility due to broader acceptance, and the newly created coins often immediately get sold for those after an initial hype.

Specifically regarding Banking, banks actually have very different needs than what Bitcoin provides: Their environment is more one of cooperation with known particpants, where a central database would be more of a communication and audit tool rather than one to achieve consensus. This has both allowed Ripple to successfully pursue banking clients with their IOU based network, and has led to a score of banks founding the R3CEV, whose product naturally diverged significantly from Bitcoin's blockchain.

I could see how the banking industry would attempt to resist the adoption of an open blockchain by favoring such a permissioned blockchain. The latter are naturally much more efficient as the decentralization comes at the cost of inefficiency. Unless an open blockchain overwhelms other forms of money, I would expect both to survive.

> **Comments:**
> **username_0**: Thanks! I am new to this world and have literally just given myself a super basic, surface level eduction over the past 72 hours. I am trying to make sense of it all. I am going to check out Ripple and R3CEV. Again, many thanks!  

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