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Mind that... it actually was a good idea. Until people started cheating with it, exactly as you say. Tokenized dollars allow to benefit from the tech (smart co
by hbbio 4y ago
Mind that... it actually was a good idea. Until people started cheating with it, exactly as you say.
Tokenized dollars allow to benefit from the tech (smart contracts), which is itself great and opens a lot of possibilities.
What's not is: Ponzi schemes (Terra), crooks (Tether?).
Edit: There are valid stablecoins like USDC (they hold sufficient reserves) and even valid algorithmic stablecoins e.g. LUSD, backed by Ethers and with a legit protocol for ensuring over-collateralization that is also immutable.
- ptero 4y ago> There are valid stablecoins like USDC (they hold sufficient reserves) Those reserves are sufficient until they are not. There are always risks of losing the peg and anyone investing in them should be aware of and track the main ones. My 2c.
- emteycz 4y agoHow is it any different from a bank? (I live in a country with well done digital currency regulation that is comparable to what banks have to do - let's not limit this to the case of Tether only).
- ptero 4y agoWhich country and which stablecoin do you have in mind, if I may ask; just curious. A big difference with banks is that in most countries with well regulated banking the government will step in to bail out the account holder in a registered bank if that bank goes under. While most government officials will sing and dance if a stablecoin (which complicates their monetary decisions and, if big enough, can even arbitrage those away) fails. Government support is not the only thing that matters, but it is an important thing to consider when comparing a stablecoin vs fiat.
- emteycz 4y agoNo stable coin yet, the legislation is completely new so nobody has caught on yet - but it'd be weird if nobody did. The country is Czech Republic. I really don't think anybody here would dance or sing. The politicians here are positive about Bitcoin, as well as the central bankers.
- ineedasername 4y ago>different from a bank Depends on the country. In the US, FDIC insurance requirements mean that depositors will be reimbursed up to $250,000 if a bank collapses, so there's very little risk. If you need more than $250,000 in cash then you should probably have multiple accounts at different banks or park the money in some other highly liquid low-risk assets that are, as much as possible, uncorrelated.
- hbbio 4y agoUnless the auditors (Grant Thornton, a reputable large company) are lying, they have 1:1 https://www.centre.io/hubfs/PDF/2022%20Circle%20Examination%20Report%20March%202022.pdf?hsLang=en https://www.centre.io/hubfs/PDF/2022%20Circle%20Examination%...
- criddell 4y agoThey do until they don't. Do you know where that money is and how is it insured?
- ComputerGuru 4y agoThat’s theoretically what the audit validates. You don’t have to know if the experts do and attest to that.
- whimsicalism 4y agoDai? Not a ponzi scheme. USDC is the same thing as Tether. It's too bad Terra ever existed. I took one look over their plan to keep their coin stable and noped out of there.
- ttul 4y agoTether is unaudited. USDC has at least been audited by a global tier-1 accounting firm. That’s a huge difference.
- whimsicalism 4y agoBoth Tether and USDC are unaudited. Both USDC and Tether are attested by outside accounting firms, although the USDC firm is more reputable.
- alexb_ 4y agoAnd as we all know from 2008, large accounting firms would never lie about the quality of other companies for their own benefit.
- whimsicalism 4y agoyou are conflating CRAs and accounting firms.