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Aren't stablecoins kind of pointless and dangerous? We all know that Tether is a huge scam, and it underpins like 75% of Bitcoin transactions - meaning if it c

Aren't stablecoins kind of pointless and dangerous? We all know that Tether is a huge scam, and it underpins like 75% of Bitcoin transactions - meaning if it crashes it could take Bitcoin with it. Adding onto that, stablecoins only really make long-term sense as havens for speculators and day traders. Do we really want to weaponize crypto markets like some kind of hyper-stock market?

verdverm 5y ago
A CBDC (Central Bank Digital Currency) backed by a money market, and a hybrid public-private partnership between the govt and thin banks would have the stable nature of a currency while eliminating much of the inefficiencies in the current TradFi and cryptos.
- guilhas 5y ago
  So.. go back to the old system? Keep the same corrupt people in power, inefficient systems that promote the production of nothing, making the rich richer...
  - wmf 5y ago
    Stablecoins combine the worst features of the old system and crypto so CBDCs should be better.
- sanderjd 5y ago
  Yes, this is the solution, but it doesn't really look like anyone is interested in making it happen.
- deleted 5y ago
  [deleted]
0x64 5y ago
Dai, MakerDAO's stablecoin, is over-collaterized through various crypto assets and there's around $6.5b worth of it in circulation right now.
- Ekaros 5y ago
  Crypto assets? Over-collaterized? That really sounds like something that works, until it doesn't. That is sometime in future when market crashes and everything comes down...
  - Groxx 5y ago
    To be fair, that's true of any collateral. Housing markets can crash, countries can have hyperinflation, diamonds could flood the market, etc. Gold's sorta safe, unless we find a huge new source, or people stop caring about it beyond its manufacturing uses. But yeah, crypto collateral for crypto is a bit of an "if we die, we die together" decision.
  - DennisP 5y ago
    Dai managed to keep a reasonably stable value through the 94% drop of 2018.
- boc 5y ago
  Wait wait wait. Stablecoins are pegged to FIAT currency. They serve as an on-ramp into the crypto ecosystem. Backing stablecoins like Dai with cryptocurrency instead of fiat is super dangerous because you need FIAT in a exchange crisis, not cryptocurrency. If you're trying to keep a 1:1 peg of Dai:USD, but you don't have dollars and only have crypto, then how are you possibly going to maintain that peg? Sell crypto for dollars on a different exchange and use that to maintain the Dai peg? Who the hell is even designing this stuff?
anonporridge 5y ago
I don't understand the argument that Tether crashing will take bitcoin with it. If Tether starts to collapse, then the holders of the $73 billion tether are going to be desperate to dump it for something else. They may try to dump it for real dollars, but they may also dump it for bitcoin and other "real" cryptocurrencies. Tether collapsing might even cause a massive bitcoin price pump.
- SavantIdiot 5y ago
  > Tether collapsing might even cause a massive bitcoin price pump. That's what I look for in a currency that dreams of replacing the dollar: a massive price pump.
  - anonporridge 5y ago
    The price of a currency is completely relative to what you're measuring it against. The US dollar has recently been experiencing a massive price pump priced in Turkish Lira. Does that make the dollar a bad currency? https://www.investing.com/currencies/usd-try https://www.investing.com/currencies/usd-try Your currency experiencing a price pump just means it's been collectively deemed to be stronger and safer than other currencies and undergoing a re-valuation. It literally happens to all currencies on the planet all the time.
    - SavantIdiot 5y ago
      In 5 years, the Turkish lira has lost ~70% of its value against the US dollar. In the same 5 years, the value of bitcoin has increased 1,000% against the US dollar. Care to expound on the consequence to the citizens of Turkey? Because that is often overlooked when using this glib analogy. I'll do it for you: your argument is meaningful at the expense of the livelihood of millions of people. BTC is a money laundering mechanism, the economy of Turkey is made of real people. The two are not comparable.
      - anonporridge 5y ago
        Alternatively, the US dollar gained ~300% in value against the Lira. You really trust something that volatile? Turks who chose to trust their monetary savings in Lira are doing terrible. Their savings have been destroyed. Turks who chose to trust their monetary savings in Dollars are doing ok. They're still getting debased, but slower than their fellow citizens. And relative their fellow citizens, they're doing amazing. Turks who chose to trust their monetary savings in Bitcoin are doing incredible. They took a risk trusting something that many smart people say is dangerous and isn't worth trusting, and they've been radically rewarded for it. Their savings can't be debased and faith in the currency is only growing, even if it's happening in volatile fits and spurts. Bitcoin is certainly used for money laundering, but so is every other currency. Banks have repeatedly been caught aiding criminal organizations. You're conflating some people using a tool for bad things with the tool itself being necessarily bad. It's not a good argument. The bitcoin economy is also made of real people, like myself, who work a real job and pay my taxes, but choose to trust my savings in money that can never be arbitrarily debased by easily corruptible humans.
ItsMonkk 5y ago
For me this is the single most important aspect of cryptocurrency. So long as you can create "stablecoins", or as I call them - "bitcoin standards", those bitcoin standards can quickly become fractional reserve banking, and when the fraction is 0, you get undefined banking, which leads us directly to wildcat banking that Tether exemplifies. To believe in cryptocurrency means to believe in a world where stablecoins are outlawed and cryptocurrency is not, if that is even possible. When most of the value of cryptocurrency comes from it being impossible to kill, it makes it impossible to kill the stablecoins that can endlessly corrupt even the purest of systems.

verdverm 5y ago

A CBDC (Central Bank Digital Currency) backed by a money market, and a hybrid public-private partnership between the govt and thin banks would have the stable nature of a currency while eliminating much of the inefficiencies in the current TradFi and cryptos.

guilhas 5y ago
So.. go back to the old system? Keep the same corrupt people in power, inefficient systems that promote the production of nothing, making the rich richer...
- wmf 5y ago
  Stablecoins combine the worst features of the old system and crypto so CBDCs should be better.
sanderjd 5y ago
Yes, this is the solution, but it doesn't really look like anyone is interested in making it happen.
deleted 5y ago
[deleted]

0x64 5y ago

Dai, MakerDAO's stablecoin, is over-collaterized through various crypto assets and there's around $6.5b worth of it in circulation right now.

Ekaros 5y ago
Crypto assets? Over-collaterized? That really sounds like something that works, until it doesn't. That is sometime in future when market crashes and everything comes down...
- Groxx 5y ago
  To be fair, that's true of any collateral. Housing markets can crash, countries can have hyperinflation, diamonds could flood the market, etc. Gold's sorta safe, unless we find a huge new source, or people stop caring about it beyond its manufacturing uses. But yeah, crypto collateral for crypto is a bit of an "if we die, we die together" decision.
- DennisP 5y ago
  Dai managed to keep a reasonably stable value through the 94% drop of 2018.
boc 5y ago
Wait wait wait. Stablecoins are pegged to FIAT currency. They serve as an on-ramp into the crypto ecosystem. Backing stablecoins like Dai with cryptocurrency instead of fiat is super dangerous because you need FIAT in a exchange crisis, not cryptocurrency. If you're trying to keep a 1:1 peg of Dai:USD, but you don't have dollars and only have crypto, then how are you possibly going to maintain that peg? Sell crypto for dollars on a different exchange and use that to maintain the Dai peg? Who the hell is even designing this stuff?

anonporridge 5y ago

I don't understand the argument that Tether crashing will take bitcoin with it. If Tether starts to collapse, then the holders of the $73 billion tether are going to be desperate to dump it for something else. They may try to dump it for real dollars, but they may also dump it for bitcoin and other "real" cryptocurrencies. Tether collapsing might even cause a massive bitcoin price pump.

SavantIdiot 5y ago
> Tether collapsing might even cause a massive bitcoin price pump. That's what I look for in a currency that dreams of replacing the dollar: a massive price pump.
- anonporridge 5y ago
  The price of a currency is completely relative to what you're measuring it against. The US dollar has recently been experiencing a massive price pump priced in Turkish Lira. Does that make the dollar a bad currency? https://www.investing.com/currencies/usd-try https://www.investing.com/currencies/usd-try Your currency experiencing a price pump just means it's been collectively deemed to be stronger and safer than other currencies and undergoing a re-valuation. It literally happens to all currencies on the planet all the time.
  - SavantIdiot 5y ago
    In 5 years, the Turkish lira has lost ~70% of its value against the US dollar. In the same 5 years, the value of bitcoin has increased 1,000% against the US dollar. Care to expound on the consequence to the citizens of Turkey? Because that is often overlooked when using this glib analogy. I'll do it for you: your argument is meaningful at the expense of the livelihood of millions of people. BTC is a money laundering mechanism, the economy of Turkey is made of real people. The two are not comparable.
    - anonporridge 5y ago
      Alternatively, the US dollar gained ~300% in value against the Lira. You really trust something that volatile? Turks who chose to trust their monetary savings in Lira are doing terrible. Their savings have been destroyed. Turks who chose to trust their monetary savings in Dollars are doing ok. They're still getting debased, but slower than their fellow citizens. And relative their fellow citizens, they're doing amazing. Turks who chose to trust their monetary savings in Bitcoin are doing incredible. They took a risk trusting something that many smart people say is dangerous and isn't worth trusting, and they've been radically rewarded for it. Their savings can't be debased and faith in the currency is only growing, even if it's happening in volatile fits and spurts. Bitcoin is certainly used for money laundering, but so is every other currency. Banks have repeatedly been caught aiding criminal organizations. You're conflating some people using a tool for bad things with the tool itself being necessarily bad. It's not a good argument. The bitcoin economy is also made of real people, like myself, who work a real job and pay my taxes, but choose to trust my savings in money that can never be arbitrarily debased by easily corruptible humans.

ItsMonkk 5y ago

For me this is the single most important aspect of cryptocurrency. So long as you can create "stablecoins", or as I call them - "bitcoin standards", those bitcoin standards can quickly become fractional reserve banking, and when the fraction is 0, you get undefined banking, which leads us directly to wildcat banking that Tether exemplifies. To believe in cryptocurrency means to believe in a world where stablecoins are outlawed and cryptocurrency is not, if that is even possible. When most of the value of cryptocurrency comes from it being impossible to kill, it makes it impossible to kill the stablecoins that can endlessly corrupt even the purest of systems.