Let's trade the bitcoin against zipcoin

You like zipcoin for no apparent reason and download the trading pit into the sandbox.  Your pit boss will trade zipcoin against bitcoin with volatitility limited to a 12% variation.  That contract implies that every trading bot in the pit will have a fair look at the book before the pit boss compresses prices to within 12%. Zipcoin holders can exit their position with a bound loss.

Then you put in one bitcoin and create 1000 zipcoins.  What happens,nothing....well nothing except your bitcoin sit on account, safely, earning nothing. But the key word is safely, it is in the sandbox. Ledger prices on bitcoin are rising, more than one bitcoin holder will say, why not and put a bitcoin on account, leaving the 1000 zipcoins on even money. It is simply a publicly useable web wallet.

We can see what happens, at transaction cost assumed nearly zero.  The site eventually goes broke, if zipcoins have no use; may as well keep bitcoins in your hardware wallet. But going broke is like me going broke with this blog, it takes a lifetime.

Zipcoins now have this interesting property, they are in the sandbox, they have automatic usage as a unit of exchange. So, immediately, you have established a buyers club, anyone buying or selling items that are correlated with bitcoin base money, like foreign trade,  That is, if the bitcoin is sitting their, your risk is 12%, take a shot and buy an Asian product with zipcoin. The sandbox guarantees equal access to your trading site, the endpoints are trusted. Your site uses the null ledger service, but bitcoin does not, that is why it is base money.

The outsiode losses if zipcoin goes under?
The likelyhood is that you have taken up another hobby and left the pit boss running for $5 per month.  Zipcoin goes under, the bitcoins have gone, you lost your.  In totality, you site has likely stranded a case of appliances on some dock somewhere, not like you crashed the world.

The realistic  market mechanism here is that a bunch of bitcoin owner will down load the site, leave a thousand bitcoins on trade, against 100,000 ziocoins.  Then hey cat about for a market, offerring it as a bitcoin coherent unit of exchange.  It will grow, companies like Overstock see that as a central bank neutral method of trade.  These are companies who see the first shock when the tax dollar jumps, so the 12% outside risk to avoid central banks is like a hedge.