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I'm working on a stable coin project right now (unsurprisingly almost all of the time and costs are process and regulation). And yeah, it relies on centralized

I'm working on a stable coin project right now (unsurprisingly almost all of the time and costs are process and regulation). And yeah, it relies on centralized trust for issuance, so it's hard to call it a "coin" in the same way bitcoin is, but I do believe it solves real problems. There's a lot you can do with a collateralized-cryptographic-asset-on-a-distributed-ledger (or stablecoin) that you can't do with a bank account. For one thing, you can write your own wallet app that works however you want it. That would be like if all banks implemented the same standard, and you could use any app to control your accounts. You can use it to do some interesting things, like write apps that require two-to-sign for certain types of transactions, or write a generic two-factor auth that works with any of these apps. You could write an arbitration service for settling disputes, or do actual (less than 10 cents) micro-transactions since the processing fees are fractions of a cent. There's a lot of potential from letting programmers interact with the finance system more concretely, and that's the problem at least some of these stablecoins are trying to solve. Not Gemini, but over on the stellar network that's what we're working on.

JoachimSchipper 8y ago
> There's a lot you can do with a collateralized-cryptographic-asset-on-a-distributed-ledger (or stablecoin) that you can't do with a bank account. (...) That would be like if all banks implemented the same standard, and you could use any app to control your accounts. Sure, given universal adoption. In reality, it's more like an API that controls, charitably, one bank - why shouldn't people just use Stripe / Paypal / ...?
- traverseda 8y ago
  Well on the stellar network it includes a distributed exchange, so as long as the assets are on the stellar network you can pay out using `foo`, and they can receive payment in `bar`.
esotericn 8y ago
Hmm. So it seems to me that the value is primarily in pushing back the frontier of the interface with the legacy system, right? If you can provide very high levels of likelihood that the issuer will not be shut down, it works. I'm just not convinced this is practical. KYC is _always_ going to be required at the interface (with the legacy system), which means the interface won't be used much, which I think makes providing proof that reasonable exchange for USD is possible very hard. And if you push it back further and require KYC for every transaction - at that point it's PayPal with an API.
- traverseda 8y ago
  >And if you push it back further and require KYC for every transaction - at that point it's PayPal with an API. Not necessarily, the stellar compliance protocol allows firms to set up peering agreements and share KYC information. It would definitely require a shift in the KYC/AML laws to use the compliance protocol as your KYC. We're canada based, so the law may be different in your municipality. Those kinds of peering agreements are how we can get a pseudo-decentralized KYC/AML layer, and "know who our customers transact with". We're not expecting to need KYC for every transaction at this time though.
  - esotericn 8y ago
    So is this a system people can actually use or just an internal settlement layer? If I set up a Foo wallet, and sell some things, and have 10K Foo, and try to cash out 10K Foo, are you going to give me 10K USD, or are you going to ask for a transactional history of the funds (i.e. KYC per transaction)? Basically, is it actually going to be realistic to exercise the cash-out functionality, or is it going to be a theoretical thing that end users in the cryptocurrency space don't actually use? I suppose I have a bias here in that I don't find a non-fungible cryptocurrency useful. I think it's actually negative and creates more problems than it solves.
    - traverseda 8y ago
      That's a question the lawyers are negotiating right now, but if we needed to "ask for a transactional history of the funds" our business model would be untenable. We're getting into territory I'm not allowed to talk about now, but note that all the crypto-currency exchanges are operating under a similar "keyhole" principle, of only doing KYC at the withdrawal or deposit steps. >Basically, is it actually going to be realistic to exercise the cash-out functionality, or is it going to be a theoretical thing that end users in the cryptocurrency space don't actually use? If should be a realistic thing, where we have real regulations applied to us and real banking partners that aren't going to suddenly pull their support, and who know exactly what it is that we're doing. Canada is a bit of a different market though.

JoachimSchipper 8y ago

> There's a lot you can do with a collateralized-cryptographic-asset-on-a-distributed-ledger (or stablecoin) that you can't do with a bank account. (...) That would be like if all banks implemented the same standard, and you could use any app to control your accounts. Sure, given universal adoption. In reality, it's more like an API that controls, charitably, one bank - why shouldn't people just use Stripe / Paypal / ...?

traverseda 8y ago
Well on the stellar network it includes a distributed exchange, so as long as the assets are on the stellar network you can pay out using `foo`, and they can receive payment in `bar`.

esotericn 8y ago

Hmm. So it seems to me that the value is primarily in pushing back the frontier of the interface with the legacy system, right? If you can provide very high levels of likelihood that the issuer will not be shut down, it works. I'm just not convinced this is practical. KYC is _always_ going to be required at the interface (with the legacy system), which means the interface won't be used much, which I think makes providing proof that reasonable exchange for USD is possible very hard. And if you push it back further and require KYC for every transaction - at that point it's PayPal with an API.

traverseda 8y ago
>And if you push it back further and require KYC for every transaction - at that point it's PayPal with an API. Not necessarily, the stellar compliance protocol allows firms to set up peering agreements and share KYC information. It would definitely require a shift in the KYC/AML laws to use the compliance protocol as your KYC. We're canada based, so the law may be different in your municipality. Those kinds of peering agreements are how we can get a pseudo-decentralized KYC/AML layer, and "know who our customers transact with". We're not expecting to need KYC for every transaction at this time though.
- esotericn 8y ago
  So is this a system people can actually use or just an internal settlement layer? If I set up a Foo wallet, and sell some things, and have 10K Foo, and try to cash out 10K Foo, are you going to give me 10K USD, or are you going to ask for a transactional history of the funds (i.e. KYC per transaction)? Basically, is it actually going to be realistic to exercise the cash-out functionality, or is it going to be a theoretical thing that end users in the cryptocurrency space don't actually use? I suppose I have a bias here in that I don't find a non-fungible cryptocurrency useful. I think it's actually negative and creates more problems than it solves.
  - traverseda 8y ago
    That's a question the lawyers are negotiating right now, but if we needed to "ask for a transactional history of the funds" our business model would be untenable. We're getting into territory I'm not allowed to talk about now, but note that all the crypto-currency exchanges are operating under a similar "keyhole" principle, of only doing KYC at the withdrawal or deposit steps. >Basically, is it actually going to be realistic to exercise the cash-out functionality, or is it going to be a theoretical thing that end users in the cryptocurrency space don't actually use? If should be a realistic thing, where we have real regulations applied to us and real banking partners that aren't going to suddenly pull their support, and who know exactly what it is that we're doing. Canada is a bit of a different market though.