5 ms·

is the price denominated in dollars, like how does the bitcoin price fluctuation get handled?

hellojesus 4y ago
Usually the seller takes on short-term price fluctuation risk. Buyer initiates purchase, and the seller gives them a window of x minutes to send y btc to an address, where the price of the service is denominated in btc as of the trading price at that moment. If at least 1 transaction doesn't show up on the btc network in the x minutes, that transaction times out. If at least 1 does, then the seller waits for w confirmations to take place before the payment is recognized as valid, where w is set to their tolerance. I've seen as low as 3 and as high as 7.
- moneywoes 4y ago
  At times that bad with the lightning network?
dboreham 4y ago
There's a thing called a stablecoin :)
- cowtools 4y ago
  There is no such thing as a decentralized stablecoin
  - yreg 4y ago
    So what? If you want to send someone $10 as crypto a centralized stablecoin works perfectly.
    - cowtools 4y ago
      Until it doesn't... which is the topic of the article. If it's centralized, it can and will be regulated
      - yreg 4y ago
        USDC/USDT is centralized as in a central entity is trading it in a way to keep the peg at $1. It is not centralized as in a central entity needs to approve your transaction.
  - TimJRobinson 4y ago
    Explain how Fei is centralised.
    - cowtools 4y ago
      I don't know about "Fei" in particular, but stablecoins generally fall into two categories: 1. Relies on some central entity to buy/sell it as to peg/back it to another asset. 2. Relies on some central observer to sign exchange rates so that the system can automatically adjust its reward system. I'm guessing it's the latter. But feel free to explain to me how it isn't centralized if you think you have a case for it.
      - TimJRobinson 4y ago
        It relies on both those things, but both are decentralized. The first is handled by arbitragers who can mint/redeem it for other decentralized assets (it is fully collateralized by a treasury of decentralized assets). The oracle is handled by Chainlink which is decentralized.
        cowtools 4y ago
        No offense, but I highly doubt that. >The first is handled by arbitragers who can mint/redeem it for other decentralized assets (it is fully collateralized by a treasury of decentralized assets). Sure, but the parameters of this mint/reward system are a function of the exchange rate, are they not? Even then, those decentralized assets are either other stablecoins, or non-stablecoins. If it's backed by stablecoins, then it's centralized. If it's backed by non-stablecoins, then it's non-stable. >The oracle is handled by Chainlink which is decentralized. You can't have a decentralized oracle in any meaningful way, it is like what truthcoin tried to do. I admittedly have no idea how chain-link works, but I am pretty certain that it is not decentralized. It is almost a truism that members of distributed system cannot verify arbitrary facts about the outside world (for example, exchange rates) without having trusted oracle/oracles. You can try to make the system reliant on many different oracles, but that is similar to classical consensus and there's no distributed way to prevent them from colluding. It is essentially the problem with proof-of-stake. If you ask me, Fei looks like yet another ponzi system like USDT/LUNA. Why are stablecoin owners always rewarded for merely holding?

Usually the seller takes on short-term price fluctuation risk. Buyer initiates purchase, and the seller gives them a window of x minutes to send y btc to an address, where the price of the service is denominated in btc as of the trading price at that moment. If at least 1 transaction doesn't show up on the btc network in the x minutes, that transaction times out. If at least 1 does, then the seller waits for w confirmations to take place before the payment is recognized as valid, where w is set to their tolerance. I've seen as low as 3 and as high as 7.

moneywoes 4y ago
At times that bad with the lightning network?

dboreham 4y ago

There's a thing called a stablecoin :)

cowtools 4y ago
There is no such thing as a decentralized stablecoin
- yreg 4y ago
  So what? If you want to send someone $10 as crypto a centralized stablecoin works perfectly.
  - cowtools 4y ago
    Until it doesn't... which is the topic of the article. If it's centralized, it can and will be regulated
    - yreg 4y ago
      USDC/USDT is centralized as in a central entity is trading it in a way to keep the peg at $1. It is not centralized as in a central entity needs to approve your transaction.
- TimJRobinson 4y ago
  Explain how Fei is centralised.
  - cowtools 4y ago
    I don't know about "Fei" in particular, but stablecoins generally fall into two categories: 1. Relies on some central entity to buy/sell it as to peg/back it to another asset. 2. Relies on some central observer to sign exchange rates so that the system can automatically adjust its reward system. I'm guessing it's the latter. But feel free to explain to me how it isn't centralized if you think you have a case for it.
    - TimJRobinson 4y ago
      It relies on both those things, but both are decentralized. The first is handled by arbitragers who can mint/redeem it for other decentralized assets (it is fully collateralized by a treasury of decentralized assets). The oracle is handled by Chainlink which is decentralized.
      - cowtools 4y ago
        No offense, but I highly doubt that. >The first is handled by arbitragers who can mint/redeem it for other decentralized assets (it is fully collateralized by a treasury of decentralized assets). Sure, but the parameters of this mint/reward system are a function of the exchange rate, are they not? Even then, those decentralized assets are either other stablecoins, or non-stablecoins. If it's backed by stablecoins, then it's centralized. If it's backed by non-stablecoins, then it's non-stable. >The oracle is handled by Chainlink which is decentralized. You can't have a decentralized oracle in any meaningful way, it is like what truthcoin tried to do. I admittedly have no idea how chain-link works, but I am pretty certain that it is not decentralized. It is almost a truism that members of distributed system cannot verify arbitrary facts about the outside world (for example, exchange rates) without having trusted oracle/oracles. You can try to make the system reliant on many different oracles, but that is similar to classical consensus and there's no distributed way to prevent them from colluding. It is essentially the problem with proof-of-stake. If you ask me, Fei looks like yet another ponzi system like USDT/LUNA. Why are stablecoin owners always rewarded for merely holding?