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My model for stable coins is that they're either backed by risk-free assets (cash/short term gov) which are externally audited, or they're not stable. I have n

My model for stable coins is that they're either backed by risk-free assets (cash/short term gov) which are externally audited, or they're not stable. I have no idea which of the above meet that criteria. Irrespective, if I want to lock in trading gains I want FIAT. Because that's what I use to buy stuff. Sticking it in some proxy to FIAT is taking counterparty/credit/etc risk for no return.

rglullis 4y ago
> Because that's what I use to buy stuff. For now, for lack of competitive alternatives. I'm not even saying that you will be buying everything with crypto in the coming years. But I do see a future where it can be more secure and more practical to buy some things with crypto: digital goods, concert tickets, service subscriptions... put all of these things together and suddenly we will find ourselves with a crypto wallet making transactions worth a few hundred dollars every month.
- ALittleLight 4y ago
  I'm always amazed at how many years into the future crypto enthusiasts are willing to wait for the basic use case of their product to be practical. "Sure, you can't use this currency for day to day transactions, and it's incredibly volatile and risky to hold significant amounts of it, but one day, by magic one assumes, it might be useful!"
  - rglullis 4y ago
    Don't be discouraged if what you produce initially is something other people dismiss as a toy. In fact, that's a good sign. That's probably why everyone else has been overlooking the idea. The first microcomputers were dismissed as toys. And the first planes, and the first cars. At this point, when someone comes to us with something that users like but that we could envision forum trolls dismissing as a toy, it makes us especially likely to invest. (http://www.paulgraham.com/organic.html http://www.paulgraham.com/organic.html) > you can't use this currency for day to day transactions Not with this attitude, you can't. ;) What currency is "this"? BTC, ETH, Doge, USDC, DAI? > incredibly volatile How volatile is USDC, DAI, GUSD? > risky to hold significant amounts of it It's also risky to walk around with significant amounts of cash in the wallet. It doesn't stop people from wanting to carry some money around. And more importantly, the alternative of "going cashless" is a whole other set of systemic risks. > it might be useful! The use cases exist already. Micropayments and streaming transfers (as an alternative for subscriptions) using stable currencies are already possible. If you don't care about it, it's a different story.
    - shkkmo 4y ago
      > Don't be discouraged if what you produce initially is something other people dismiss as a toy. You could make that argument 10 years ago. It's been plenty long enough to find a use case that isn't breaking laws.
      - rglullis 4y ago
        > It's been plenty long enough to find a use case that isn't breaking laws. It's impressive... Like clockwork, there will always be one coming to throw the "only use-case is illegal stuff!" line. It's like people can't wait to throw their opinions about a topic while displaying their complete ignorance of it. Tell me how you can do the use-case for Brave - ie, sharing revenue from the ads with millions of users from anywhere in the world - within the traditional payment networks. You can't. There is no Paypal or any other financial institution interested in making monthly transactions that can go as low as a few dollar cents. And somehow Brave does it, legally, and it all works out.
        shkkmo 4y ago
        > Tell me how you can do the use-case for Brave - ie, sharing revenue from the ads with millions of users from anywhere in the world - within the traditional payment networks Brave collects money from advertisers, Brave sends money to sites and users. Nothing in that requires any sort of blockchain. If the monthly amounts are so small as to make flat transaction costs significant, then the amounts are themselves insignificant. None of this requires a decentralized trustless ledger.
        rglullis 4y ago
        > If the monthly amounts are so small as to make flat transaction costs significant, then the amounts are themselves insignificant. That is the hole in your argument. Imagine the amount of business opportunities if the total cost of a transaction was a fraction of a cent. > None of this requires a decentralized trustless ledger. That is an implementation detail. If you find any other method to securely send value across the world for fractions of a cent (even if with intermediaries), I'm all for it.
  - kloch 4y ago
    It took many thousands of years to switch from gold/silver money to paper (fiat) money. It was tried many times and failed each time until the US succeeded in the 20th century. Even that final transition took 38 years to complete from 1933-1971 despite the US having the power of both nuclear weapons and the world's reserve currency after 1945. The transition from paper fiat dollars to electronic (credit/debit cards and later NFC apps) for ordinary everyday payments which began in ernest ~1990* is still not complete (30+ years). This is despite the fact that it is only a different method of payment, not a change in monetary system like gold/silver -> fiat was. Why would anyone expect a transition from fiat (paper and/or electronic) money to crypto to only take 10 years? * one of the places I worked in high school in 1988 was People's Drug (CVS). While we did have the primitive early electronic swipe terminals for credit cards, they were only used by the cashier for pre-authorizations (replacing the earlier method of calling an 800 number). The pre-auth step could take several minutes. We then had to imprint the card on carbon paper vouchers with the mechanical "click-clack" machines and write down various information on the vouchers with ballpoint pens. Fortunately very few customers used credit cards due to this long tedious process. Payment by check wasn't much faster as we had to write down driver's license number and address on the check by hand. In 1990 or so the first gas stations started to accept payments at the pump. Before that you had to walk inside and pay with paper money or the old slow mechanical credit card method or checks. For the first few years they only accepted debit cards at the pump, not credit. A few grocery stores started accepting debit cards around the same time as the gas stations.
    - ALittleLight 4y ago
      If this comment means "the current transition to crypto is likely to fail" then we agree.
      - kloch 4y ago
        Many central banks including the Fed are looking into CBDC's. While not quite the same as the distributed consensus based algorithm of Bitcoin, there are too many benefits to governments/central banks to ignore the technology. The question is not whether cryptographically secured algorithmic money will be a part of future monetary systems but who will control the algorithm and/or how will different systems compete with each other.
  - burnished 4y ago
    Eeeeh, a lot of stuff we think of as being normal or obvious took a really long time to develop into something useful, so I don't know if "early adopters excited about technology well before it becomes useful or even has a clear use" is really the strongest point you can make. Especially on a tech centered forum right?
lebed2045 4y ago
DAI track record for the last 4.5 years had proven you wrong. It’s either 1)centralized and has all these centralization risks (USDT had frozen 360M on ether alone), 2) crypto-overcallaterized that has less centralization risks but limits in stability. 3) or something else, that usually doesn’t work (terraUSD) I keep 99% on my money in crypto (plus I recently got pretty much excluded from banking system) so i have my money where my mouth is: DAI. I don’t like everything about it, like lots of USDC is collateral, or ineffective liquidation system, and for that reason I’m participating in StableUnitDAO to build far-better alternative (feel free to join us, i bet all my lifesavings on this project) but for sake of this argument it’s not good fiat vs bad crypto stablecoins. For lots of people it’s strictly opposite.
- Ntrails 4y ago
  > DAI track record for the last 4.5 years had proven you wrong. 4.5 years is not a lot of history. I wouldn't fit a basic credit model on that much data. open disclosure, I know nothing of DAI (indeed little of crypto). But if I want a dollar-like asset, a risk free asset, then "limits in stability" is not compatible with that.
- rglullis 4y ago
  I think I am spending a couple of hours every day here arguing with the barrage of web3 skeptics, trying to spread the message that crypto can be a net positive for society without replacing traditional finance. That the important thing is giving people an option, and not just some high-stakes casino. And then: > I bet all my lifesavings on this project. You are not helping me, dude. You are not helping anyone... > I recently got pretty much excluded from banking system Does it have anything to do with xSigma, perhaps?

rglullis 4y ago

> Because that's what I use to buy stuff. For now, for lack of competitive alternatives. I'm not even saying that you will be buying everything with crypto in the coming years. But I do see a future where it can be more secure and more practical to buy some things with crypto: digital goods, concert tickets, service subscriptions... put all of these things together and suddenly we will find ourselves with a crypto wallet making transactions worth a few hundred dollars every month.

ALittleLight 4y ago
I'm always amazed at how many years into the future crypto enthusiasts are willing to wait for the basic use case of their product to be practical. "Sure, you can't use this currency for day to day transactions, and it's incredibly volatile and risky to hold significant amounts of it, but one day, by magic one assumes, it might be useful!"
- rglullis 4y ago
  Don't be discouraged if what you produce initially is something other people dismiss as a toy. In fact, that's a good sign. That's probably why everyone else has been overlooking the idea. The first microcomputers were dismissed as toys. And the first planes, and the first cars. At this point, when someone comes to us with something that users like but that we could envision forum trolls dismissing as a toy, it makes us especially likely to invest. (http://www.paulgraham.com/organic.html http://www.paulgraham.com/organic.html) > you can't use this currency for day to day transactions Not with this attitude, you can't. ;) What currency is "this"? BTC, ETH, Doge, USDC, DAI? > incredibly volatile How volatile is USDC, DAI, GUSD? > risky to hold significant amounts of it It's also risky to walk around with significant amounts of cash in the wallet. It doesn't stop people from wanting to carry some money around. And more importantly, the alternative of "going cashless" is a whole other set of systemic risks. > it might be useful! The use cases exist already. Micropayments and streaming transfers (as an alternative for subscriptions) using stable currencies are already possible. If you don't care about it, it's a different story.
  - shkkmo 4y ago
    > Don't be discouraged if what you produce initially is something other people dismiss as a toy. You could make that argument 10 years ago. It's been plenty long enough to find a use case that isn't breaking laws.
    - rglullis 4y ago
      > It's been plenty long enough to find a use case that isn't breaking laws. It's impressive... Like clockwork, there will always be one coming to throw the "only use-case is illegal stuff!" line. It's like people can't wait to throw their opinions about a topic while displaying their complete ignorance of it. Tell me how you can do the use-case for Brave - ie, sharing revenue from the ads with millions of users from anywhere in the world - within the traditional payment networks. You can't. There is no Paypal or any other financial institution interested in making monthly transactions that can go as low as a few dollar cents. And somehow Brave does it, legally, and it all works out.
      - shkkmo 4y ago
        > Tell me how you can do the use-case for Brave - ie, sharing revenue from the ads with millions of users from anywhere in the world - within the traditional payment networks Brave collects money from advertisers, Brave sends money to sites and users. Nothing in that requires any sort of blockchain. If the monthly amounts are so small as to make flat transaction costs significant, then the amounts are themselves insignificant. None of this requires a decentralized trustless ledger.
        rglullis 4y ago
        > If the monthly amounts are so small as to make flat transaction costs significant, then the amounts are themselves insignificant. That is the hole in your argument. Imagine the amount of business opportunities if the total cost of a transaction was a fraction of a cent. > None of this requires a decentralized trustless ledger. That is an implementation detail. If you find any other method to securely send value across the world for fractions of a cent (even if with intermediaries), I'm all for it.
- kloch 4y ago
  It took many thousands of years to switch from gold/silver money to paper (fiat) money. It was tried many times and failed each time until the US succeeded in the 20th century. Even that final transition took 38 years to complete from 1933-1971 despite the US having the power of both nuclear weapons and the world's reserve currency after 1945. The transition from paper fiat dollars to electronic (credit/debit cards and later NFC apps) for ordinary everyday payments which began in ernest ~1990* is still not complete (30+ years). This is despite the fact that it is only a different method of payment, not a change in monetary system like gold/silver -> fiat was. Why would anyone expect a transition from fiat (paper and/or electronic) money to crypto to only take 10 years? * one of the places I worked in high school in 1988 was People's Drug (CVS). While we did have the primitive early electronic swipe terminals for credit cards, they were only used by the cashier for pre-authorizations (replacing the earlier method of calling an 800 number). The pre-auth step could take several minutes. We then had to imprint the card on carbon paper vouchers with the mechanical "click-clack" machines and write down various information on the vouchers with ballpoint pens. Fortunately very few customers used credit cards due to this long tedious process. Payment by check wasn't much faster as we had to write down driver's license number and address on the check by hand. In 1990 or so the first gas stations started to accept payments at the pump. Before that you had to walk inside and pay with paper money or the old slow mechanical credit card method or checks. For the first few years they only accepted debit cards at the pump, not credit. A few grocery stores started accepting debit cards around the same time as the gas stations.
  - ALittleLight 4y ago
    If this comment means "the current transition to crypto is likely to fail" then we agree.
    - kloch 4y ago
      Many central banks including the Fed are looking into CBDC's. While not quite the same as the distributed consensus based algorithm of Bitcoin, there are too many benefits to governments/central banks to ignore the technology. The question is not whether cryptographically secured algorithmic money will be a part of future monetary systems but who will control the algorithm and/or how will different systems compete with each other.
- burnished 4y ago
  Eeeeh, a lot of stuff we think of as being normal or obvious took a really long time to develop into something useful, so I don't know if "early adopters excited about technology well before it becomes useful or even has a clear use" is really the strongest point you can make. Especially on a tech centered forum right?

lebed2045 4y ago

DAI track record for the last 4.5 years had proven you wrong. It’s either 1)centralized and has all these centralization risks (USDT had frozen 360M on ether alone), 2) crypto-overcallaterized that has less centralization risks but limits in stability. 3) or something else, that usually doesn’t work (terraUSD) I keep 99% on my money in crypto (plus I recently got pretty much excluded from banking system) so i have my money where my mouth is: DAI. I don’t like everything about it, like lots of USDC is collateral, or ineffective liquidation system, and for that reason I’m participating in StableUnitDAO to build far-better alternative (feel free to join us, i bet all my lifesavings on this project) but for sake of this argument it’s not good fiat vs bad crypto stablecoins. For lots of people it’s strictly opposite.

Ntrails 4y ago
> DAI track record for the last 4.5 years had proven you wrong. 4.5 years is not a lot of history. I wouldn't fit a basic credit model on that much data. open disclosure, I know nothing of DAI (indeed little of crypto). But if I want a dollar-like asset, a risk free asset, then "limits in stability" is not compatible with that.
rglullis 4y ago
I think I am spending a couple of hours every day here arguing with the barrage of web3 skeptics, trying to spread the message that crypto can be a net positive for society without replacing traditional finance. That the important thing is giving people an option, and not just some high-stakes casino. And then: > I bet all my lifesavings on this project. You are not helping me, dude. You are not helping anyone... > I recently got pretty much excluded from banking system Does it have anything to do with xSigma, perhaps?