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Another key drawback of USDC is that your account can be frozen by the centralized authority: USDC tokens are ERC-20 compatible and can be used with any ERC-20

• hudon 8y ago
  Same drawback applies to Bitcoin. Send BTC from Coinbase to a blacklisted entity and see how quickly CB, Gemini, etc. shut down your accounts. Then you’re left with your local client but you can’t trade anywhere... and speculation is crypto’s only use case today.
  • lawn 8y ago
    > but you can’t trade anywhere Just trade on all the other less regulated exchanges. Or localbitcoin. Or, you know, buy stuff. > and speculation is crypto’s only use case today. Or you buy stuff... For example: * Webhallen (huge Swedish online shop) * scan.co.uk (uk based computer online shop) * purse.io (buy stuff from amazon) * fastmail (emails) * VPN/VPS/domains from various providers * darknetmarkets
    • skybrian 8y ago
      If they don't use the blacklist, will they get added to the blacklist? (Is it viral?)
      • goodside 8y ago
        Yes. This is what Chainalysis does, among many other things — track tainted coins that people are intentionally obscuring the origin of.
    • hudon 8y ago
      Why the hell would I buy Bitcoin to buy stuff on Amazon through a proxy site that sells my BTC for me instead of just... buying on Amazon like a normal person? BTC will be way slower and more expensive than just using my credit card... Plus Visa will refund me in the case of fraud. Like I side, speculation is the only thing you buy BTC for (moon!!!111), and the exchanges will prevent you from doing this if you are related to blacklisted accounts.
      • lawn 8y ago
        > Why the hell would I buy Bitcoin to buy stuff on Amazon through a proxy site Because they give discounts up to 15%. I'm sorry it doesn't fit your narrative but there are reasons to prefer cryptocurrencies.
        • briatx 8y ago
          Like a lot of the crypto currency space purse.io is shady and likely promoting thinly veiled money laundering. Ask yourself if the discount is worth the risk of experiences like this: https://www.reddit.com/r/Bitcoin/comments/4zczow/my_experience_with_purseio/ https://www.reddit.com/r/Bitcoin/comments/4zczow/my_experien...
        • hudon 8y ago
          15% sounds about right to offset the fraud risk, volatility risk, exchange fees, network fees, network congestion, transfer delays, fork risk, catastrophic bugs, and theft risk :) We all have narratives, buddy. Mine just doesn't hinge on gambling and crypto-anarchic utopia.
        • deleted 8y ago
          [deleted]
        • pjc50 8y ago
          Why are they giving such a big discount? The transaction fees are nowhere near that high. Could it be that they're reselling fraudulent giftcards?
      • antidesitter 8y ago
  • celticninja 8y ago
    You can avoid gemini and coinbase if you use bitcoin. You cannot avoid them if you use USDC/GUSD.
    • hudon 8y ago
      When you say "use bitcoin", what do you mean? edit: Perhaps the lesson here is the more useful something is, the less freedom you have in using it. After all, why would regulators care if you can "use bitcoin" when "use" means "play with my private keys".
      • AgentME 8y ago
        Coinbase and Gemini aren't the only places that accept Bitcoin.
      • richardknop 8y ago
        Transfer the bitcoin from your wallet to any other non Gemini/Coinbase wallet. Most crypto people have private wallets. You can also use something like localbitcoins or Bitcoin ATM. Or you can literally meet with a person selling something for a coffee, transfer BTC to their wallet, they wait few minutes for on chain confirmation, give you stuff you bought, done.
  • lacker 8y ago
    At least according to this document, when your USDC account is blacklisted you may no longer send or receive tokens from it. With Bitcoin, even if Coinbase blacklists you, you can still send your Bitcoin to other accounts and exchange it for things. I'm sure it's a huge pain but your Bitcoin will not just be lost forever.
    • hudon 8y ago
      > With Bitcoin, even if Coinbase blacklists you, you can still send your Bitcoin to other accounts and exchange it for things This is not so. Coinbase and Gemini (I haven't checked others but I'm sure they're the same) will freeze your assets entirely if required by law or if you violate the user agreements in some flagrant way [0] [1]. [0] https://support.coinbase.com/customer/en/portal/articles/1905680-does-coinbase-freeze-accounts- https://support.coinbase.com/customer/en/portal/articles/190... [1] https://gemini.com/user-agreement/#account-closure https://gemini.com/user-agreement/#account-closure
      • mitchdoogle 8y ago
        I think they mean if you are using your own wallet to store your bitcoin, then coinbase and gemini have no control over what you do with it, except not using their own services
        • hudon 8y ago
          Then back to my original point: If no exchanges allow you to deposit BTC, what are you doing with it? Once you've shamir-secret-split your multi-sig cold-storage private keys, laminated them, placed them in fireproof envelopes and dug them deep in the ground in 5 different continents... what exactly do you DO with your BTC?
          • plankers 8y ago
            Your original point was that _Coinbase and Gemeni_ had prevented you from exchanging your BTC for fiat currency. There's nothing preventing you from taking your BTC to some other exchange, or just some guy that accepts BTC for goods or services. That's the beauty of this whole decentralized thing.
  • VMG 8y ago
    Coinbase is not a wallet.
• colordrops 8y ago
  So what benefits does this have over PayPal then?
  • lacker 8y ago
    Since it's an Ethereum token, you can write a smart contract that uses USDC.
  • JohnJamesRambo 8y ago
    >Use cases for USDC today include: >Improved send and receive. Two Ethereum wallets can quickly send and receive any amount of USDC at any time of day. Large transfers for business purposes become as easy as small e-commerce payments. Consumers can use the Coinbase app to send USDC to someone, while remaining confident the value is stable. >Use in dApps and exchanges. There is a burgeoning ecosystem of crypto dApps, exchanges, and blockchain-based games. A USDC follows the ERC20 standard, which means it can be used with any app that accepts tokens based on that standard. The USDC can thus be used as a stable digital dollar to buy items in the crypto ecosystem, from Cryptokitties to tickets for blockchain-based games. >A programmable dollar. For developers and fintech companies, a digital dollar like USDC is easier to program with. For example, given the private keys for USDC, a program can easily send and receive them back and forth using the public Ethereum blockchain.
    • TylerE 8y ago
      If your example use case is CryptoKitties you are selling vaporware.
• lez 8y ago
  I always look at askance to USD-in-a-bank-account backed stablecoins. There's no innovation in them. Their value also depends on how many USD's stored in that bank account (not transparent to ordinary people), and the inherent problem with USD - that the FED, a central authority prints it, remains still. There are other - in my opinion more honest - crypto-only stablecoins, like Dai (of MakerDAO) or Augmint, which are not freezable by any authority, nor cheatable by bribed auditors. They are backed solely by crypto assets, all transparent.
  • deleted 8y ago
    [deleted]
  • asynchrony 8y ago
    Crypto assets are only valuable insofar as they can be exchanged for real world goods and services (mostly people seem to want US dollars). Purely crypto backed stable coins lack a stable relationship to the real world.
    • JohnJamesRambo 8y ago
      Interestingly, in dark web markets, it is often exactly the opposite scenario. No one wants USD and they all want crypto.
      • asynchrony 8y ago
        At some point they'll want to exchange their profits for real goods and services. They will rely on some exchange service to cash out eventually.
        • rocqua 8y ago
          If most of the criminal money is used to transact with other criminals, then most of the money doesn't need to convert to USD. The real kicker is whether the other criminals are willing to accept bitcoin which they know won't convert to USD.
• Yizahi 8y ago
  But guys who will own this "stablecoin" somewhere in Cook island offshore would surely provide support in a timely and legal manner.
• asynchrony 8y ago
  I don't see how this won't result in rebuilding the current regulated banking system on top of an inefficient system bottlenecked by proof-of-work.
  • nostrademons 8y ago
    "Rebuilding the current regulated banking system" just with different people in charge can be quite lucrative if you are one of the new builders who is now in charge.
    • asynchrony 8y ago
      I can definitely see the attraction for entrepreneurs, just not the value for anyone else.
      • nostrademons 8y ago
        It's a form of time-arbitrage. The cost of regulation is a decrease in both convenience and innovation. By eliminating regulation, you get a whole host of new startups that were previously held back, some of which solve genuine problems that have no existing solution. Consumers flock to these startups because right now, in this moment, they solve problems better and are more responsive to customers than the existing regulated incumbents. Many regulations solve problems that only appear at scale, so as long as the new startups are small and voluntary, regulators take a hands-off approach and let these startups enjoy their competitive advantage. It takes time for regulators to catch up, so for several years, these new solutions can grow and get new adopters. Eventually all the bad behavior that caused the regulations in the first place appears, and there're calls for regulation, and the new boss starts to look an awful lot like the old boss. But people don't make their purchasing decisions based on what's going to happen in 20 years, they make their purchasing decisions based on what they need now. You see this with a lot of dot-com era startups. People knew in 1997 that Amazon was going for monopoly and was just going to jack up prices when they achieved it; hell, Jeff Bezos even told investors as such. But consumers didn't care: we wanted convenience and low prices now, and even if we did without, other people would give Amazon their business, and all we'd succeed at is disadvantaging ourselves. Similar with Facebook; most people knew they were trading away their privacy (Zuckerburg's "dumb fucks" IM was made public in 2010, and he said it in 2004), but goddamnit, people wanted to see what their grandkids were up to.
• jhabdas 8y ago
  PayPal can do much worse than freeze. In fact, even if you have a zero balance they can simply decide to put you negative $5,000 as they did to me last year. I'll never forget not being able to communicate with a human while they pushed me via automated email through their 90's looking (and functioning) complaint system. It took me almost three restless weeks to have them restore my zero balance. If any of you honestly believe USDC would be any different by all means please stock up.
• davidajackson 8y ago
  That seems like a huge disadvantage. If people are doing what the crypto community likes to call "tethering", they're probably going to lean toward a decentralized smart contract token. Tether has not always been a favorite due to auditing concerns, so I see the need for something more reliable. But it doesn't seem like being able to freeze tokens is an attractive quality even if Coinbase is more "trusted" and releases frequent audits. Does anyone have the token contract address? I am assuming the blacklist is part of the smart contract based on the above wording, though haven't had a chance to look at the code. If it's not part of the code and only exists on exchange wallets then I see what Coinbase is doing as more reasonable.
• wyldfire 8y ago
  'key drawback' aka a centralized system.