Okay so we all can agree in some way, shape, or form that central banks aren't ideal. They are subject to political pressure and a lot of the times are at the whim of the governments that bank with them.
So, Scott Sumner has proposed a way to essentially automate the monetary policy of a central bank through nGDP targeting tied to futures contracts. See http://www.nationalaffairs.com/publications/detail/re-targeting-the-fed
I am not here to argue the ideal monetary policy, more to pose a question to the community of how it could be done with contracts. Let's take nGPD targeting as Sumner suggests as the ideal monetary policy and go from there - economists can argue the rest.
What would this require to be automated:
1) Trustless datafeed of nGPD data. How to do this? Maybe multiple independent collectors of index data, reporting to a contract that fires when 51% of the collectors submitted data are within a threshold of closeness.
2) A way to create these contracts that are bet-able in a sense of accepting a cryptocurrency like Bitcoin and holding them until the datafeed is agreed upon. Once done, the contract is owned by the correct winner who can then offer the contract for sale again.
This requirement is what I'm struggling with right now; if it's thought about in the way of the old classical international gold standard, the central banks could would buy and sell gold at a fixed rate, say $20/oz. These contracts would serve as new gold, and the markets would buy these contracts from the government if they're under-valued and sell them if they're over-valued, keeping the contract prices stable.
In this way, these contracts of nGDP would be valued to grow at 5% per year instead of, in the gold version, be valued as a constant. The "government" would be Distributed Autonomous Organization programmed to buy and sell contracts at a constant 5% growth rate valuation.
3) So much more and I know it. Let's get some discussion going and see if this is even possible!