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Algorithmic stable coins have always been vulnerable to a run on the bank situation but it’s not limited to just algorithmic stable coins. Bitcoin itself is al

Algorithmic stable coins have always been vulnerable to a run on the bank situation but it’s not limited to just algorithmic stable coins. Bitcoin itself is also vulnerable and due to it’s design, big investors will be able to attach much higher transaction fees to their transactions meaning they’ll get a chance to sell first.

wmf 4y ago
You only have to worry about transaction fees if you're a sucker and actually use the blockchain. If your coins are already custodied at an exchange you can sell immediately.
- eli 4y ago
  Now you’ve introduced a whole other category of risks instead.
- sgarman 4y ago
  Exchanges stop / block / pause transactions all the time though? That's what everyone was so mad at robinhood about. No difference in crypto exchanges.
- Barrin92 4y ago
  > if you're a sucker and actually use the blockchain "Abstract. A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. Digital signatures provide part of the solution, but the main benefits are lost if a trusted third party is still required[...]" so much for the whitepaper I suppose
  - sanderjd 4y ago
    Correct. It seems to me that nobody has been trying to realize the vision from that whitepaper for like a decade.
- zarzavat 4y ago
  Allow me to introduce you to an exchange called Mt Gox...
- kadoban 4y ago
  > If your coins are already custodied at an exchange you can sell immediately. And you'd (rightly) get called a sucker for storing your coins at an exchange, negating really all of the benefits of using Bitcoin.
  - charcircuit 4y ago
    Some people just want to collect bitcoins and do not care very much about the benefits of using it.
- freeone3000 4y ago
  Yeah, let me just withdraw my coins from Quadriga...
- unmole 4y ago
  > If your coins are already custodied at an exchange you can sell immediately. Unless the exchange suspends trading or goes down for unscheduled maintenance right when you want to sell. Of course, that is assuming the exchange doesn't simply take your coins and run.
3np 4y ago
While yes, of course any asset in the world is vulnerable to market swings, you can't really call the Bitcoin scenario a "bank run" in the same way as with UST/Luna (where there actually exists an issuer and a smart contract acting "bank" where people exchange collateral for tokens).

wmf 4y ago

You only have to worry about transaction fees if you're a sucker and actually use the blockchain. If your coins are already custodied at an exchange you can sell immediately.

eli 4y ago
Now you’ve introduced a whole other category of risks instead.
sgarman 4y ago
Exchanges stop / block / pause transactions all the time though? That's what everyone was so mad at robinhood about. No difference in crypto exchanges.
Barrin92 4y ago
> if you're a sucker and actually use the blockchain "Abstract. A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. Digital signatures provide part of the solution, but the main benefits are lost if a trusted third party is still required[...]" so much for the whitepaper I suppose
- sanderjd 4y ago
  Correct. It seems to me that nobody has been trying to realize the vision from that whitepaper for like a decade.
zarzavat 4y ago
Allow me to introduce you to an exchange called Mt Gox...
kadoban 4y ago
> If your coins are already custodied at an exchange you can sell immediately. And you'd (rightly) get called a sucker for storing your coins at an exchange, negating really all of the benefits of using Bitcoin.
- charcircuit 4y ago
  Some people just want to collect bitcoins and do not care very much about the benefits of using it.
freeone3000 4y ago
Yeah, let me just withdraw my coins from Quadriga...
unmole 4y ago
> If your coins are already custodied at an exchange you can sell immediately. Unless the exchange suspends trading or goes down for unscheduled maintenance right when you want to sell. Of course, that is assuming the exchange doesn't simply take your coins and run.

3np 4y ago

While yes, of course any asset in the world is vulnerable to market swings, you can't really call the Bitcoin scenario a "bank run" in the same way as with UST/Luna (where there actually exists an issuer and a smart contract acting "bank" where people exchange collateral for tokens).