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What I don’t get is if stable coins aren’t backed by dollars somewhere, and their market cap is billions of dollars, and those stable coins are exchanged for ac

by cgb223 5y ago

What I don’t get is if stable coins aren’t backed by dollars somewhere, and their market cap is billions of dollars, and those stable coins are exchanged for actual dollars, did we not just print billions of extra dollars out of thin air…? Surely that must have some impact on inflation or the world economy in some sense

vmception 5y ago
This paper would make those questions evaporate. Purely algorithmic stablecoins are a joke so far, whereas algorithmic overcollateralized stablecoins are doing great. The other even bigger ones backed by dollars somewhere.
- nuclx 5y ago
  Terra UST is doing quite well in spite of being receiving some FUD recently, right?
somewhereoutth 5y ago
Stablecoins only maintain their peg when they aren't being exchanged for actual dollars. When everyone runs for the exits during the inevitable crash, there will only be so many dollars to go round. No real dollars are being created anywhere in any of this - it is all simply a astonishingly complicated mechanism for transferring wealth from the marks to the scammers (and to pay some enormous electricity bills). For example, printing USDT out of thin air and buying BTC with it supports the BTC price, this BTC is then brought onto the Tether books to back the newly printed USDT. The scammers then sell their own BTC into this price rise, receiving USDT which they (as privileged USDT account holders) can turn back into real dollars. The real dollars of course are coming from the marks who see BTC rising and dump their life savings into it, needing to buy USDT in order to buy the BTC. It is almost beautiful in a way - and absolutely should be shutdown real soon now.
lariati 5y ago
Obviously, but people will cherry pick evidence to rationalize what they already believe to be true and conflate this process with some kind objective falsifiable experiment in their head.

by cgb223 5y ago

vmception 5y ago

This paper would make those questions evaporate. Purely algorithmic stablecoins are a joke so far, whereas algorithmic overcollateralized stablecoins are doing great. The other even bigger ones backed by dollars somewhere.

nuclx 5y ago
Terra UST is doing quite well in spite of being receiving some FUD recently, right?

somewhereoutth 5y ago

Stablecoins only maintain their peg when they aren't being exchanged for actual dollars. When everyone runs for the exits during the inevitable crash, there will only be so many dollars to go round. No real dollars are being created anywhere in any of this - it is all simply a astonishingly complicated mechanism for transferring wealth from the marks to the scammers (and to pay some enormous electricity bills). For example, printing USDT out of thin air and buying BTC with it supports the BTC price, this BTC is then brought onto the Tether books to back the newly printed USDT. The scammers then sell their own BTC into this price rise, receiving USDT which they (as privileged USDT account holders) can turn back into real dollars. The real dollars of course are coming from the marks who see BTC rising and dump their life savings into it, needing to buy USDT in order to buy the BTC. It is almost beautiful in a way - and absolutely should be shutdown real soon now.

lariati 5y ago

Obviously, but people will cherry pick evidence to rationalize what they already believe to be true and conflate this process with some kind objective falsifiable experiment in their head.