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Honest question, do you think there is zero value to stablecoins? There's obviously huge demand for dollar assets in middle income countries without easy access

Honest question, do you think there is zero value to stablecoins? There's obviously huge demand for dollar assets in middle income countries without easy access to dollarized banking. In countries like Turkey or Argentina or Nigeria, stablecoins have achieved widespread adoption because they're far safer form of savings than inflationary local currency. It's hard for me to imagine how that's zero-sum.

ChrisLomont 4y ago
>do you think there is zero value to stablecoins? So far they've failed to be stable, so I'm not sure what other aspect you would consider valuable. Such things have failed through all of history. Adding crypto as a buzzword doesn't make them stable.
- svnt 4y ago
  Arguing that things that have never worked before will continue to not work, barring obvious violations of the laws of physics, has a pretty poor history. A global stablecoin is one area where decentralization might make a significant difference in utility.
  - ChrisLomont 4y ago
    >has a pretty poor history It has a terrific history - you must be not counting all the stuff that fails for previously known reasons that people try again. Sure, if you only cherry pick post hoc examples of things that eventually worked, then you can claim a poor history. But the correct evaluation is to pick all things being tried right now by any person on the planet, and measure how many were new and worked for the first time. You know what does have a poor history? People claiming something will work because they once saw some unrelated thing work and assuming that means all things will work, no matter what the previous evidence. >barring obvious violations of the laws of physics Why limit yourself to physics? Those are not the only laws that govern how societal structures work. Also is it possible that the reason some dreams in economics fail because they eventually hit physics? The same works for crypto. Santa isn't real. Unicorns don't live in the chimney. There is no free energy, despite probably 10s to 100s of thousands of people and inventions that said there were. All those people that found counterexamples to Fermat's Last Theorem were wrong. The list of medical things tried well after they were known to be wrong is astounding, and none of those things will likely ever, ever work. I could go on and on. It's far easier to make up stuff that will not work than to make up stuff that possibly could work or definitely works. So no, most things that currently don't work will never work, which is how we acquired the knowledge we have - we ruled out dumb and stupid things. There is a tiny, tiny sliver on the edge that is undecided, and that is where almost all new things and inventions come from. The vast landscape of settled knowledge will stay that way. So, as to stablecoins, and mostly crypto in general - this is what happens when programmers generally wildly ignorant of the reasons for how modern finance work try to make modern finance. Since they're mostly ignorant of why the system has evolved to where it is over millennia of knowledge, they're simply trying to reinvent all that stuff one destroyed speculator at a time. The current stable coins imploded as nearly anyone with much knowledge about econ would have guessed. I didn't follow them closely, but one night a friend carefully explained all the processes behind (I think it was) Luna. At one point I told him that the pieces he explained form a dynamic equilibrium instead of a static equilibrium, which means a little perturbation and the whole things goes off the rails. He remarked that my insight, after hearing the details for the first time, was exactly what did happen. It's funny watching crypto slowly try to reinvent every financial item that failed and do exactly the same things that caused previous things to fail. Stable coins are not new, after all. It baffles me that people keep trying to do things that are simply dumb, either out of hubris, greed, or ignorance. Good luck on whatever stable coins you expect to happen. If they keep it up long enough they might eventually invent financial derivatives, but I expect that to be when the world has already moved past those and found yet better products.
    - svnt 4y ago
      Congratulations on your discovery of dynamical systems. You describe the very scenario where stablecoins come into being, but you are too perfectly rational to engage in that creative behavior. That’s fine. You admit others probably will but decide it will be a failure at the point where it works because someone else will have somehow bypassed this whole process. I don’t hold any stablecoins or care if it works.
- dcolkitt 4y ago
  USDC and DAI both have a spotless record of stability.
  - ChrisLomont 4y ago
    All claimed pegged value items are spotless until they fail. USDC is exactly the same as every non-fiat currency, all claimed back by commodity X, all have failed once economies got tough. USDC does nothing, zero, nada, that literally hundreds of places tried over the past 200 years. It will fail, for the same reasons. That they haven't imploded over 4 years with tiny usage is not special. It is fascinating how they've changed their claims over time, and are no where near transparent on what backs them at the moment. Good luck with yet another repeat of bad ideas. DAI has not even stayed pegged to the dollar over it's few year lifetime. I don't know how you call that spotless. It requires suspended disbelief to claim these things.
gonzo41 4y ago
I don't see any value in reinventing money. All of the place you listed need better governance more than anything else.
- x-complexity 4y ago
  > I don't see any value in reinventing money. Due to the subjectivity of this statement, there is little-to-no area for debate. It is of my belief that the limits of programmable money should be probed, tested, & examined: Currently, the traditional banking infrastructure does not allow for such automation, and the attempts to do so are unfortunately dependent on banks that have the ability to censor transactions if coerced to do so, whether via national security concerns, politics, mob rule, etc. This is especially concerning to me as there's a non-zero chance that my government will block my financial transactions simply because of my beliefs & lifestyle (G in anti-LGBTQ+ country). This consequently leads to the next sentence: > All of the place you listed need better governance more than anything else. That statement is predicated upon the following axioms: 1) There is a person / a group of people close enough to the governance tools that can both (a) enact the necessary changes & (b) defend said tools from manipulation/corruption 2) That the "change-enactors" can competently use said tools without adverse effects 3) (potential subset of 1(b)) That said enactors will not use said tools on scapegoats/critics/political targets 4) (potential subset of 1(b)) The enactors can be trusted to use said tools 5) There's a system in place to combat misuse of said tools, & that can be deployed in a timely manner 6) (potential subset of 1(b)) The enactors will not use said tools on said misuse combat system 7) The punishment for governance tool misuse is sufficient enough to act as a detractor for such actions 8) That said misuse combat system will not in itself be misused (The "Who Watches the Watchmen?" problem) Assuming that all of the axioms can be fulfilled, I have no qualms or objections to your statement: Such a system in place will no doubt be more efficient & effective. It should be noted however that the hidden cost (centralization of control/power) will be a vector for abuse, & will attract those that want said power/control. In addition, due to the pigeonhole principle and the significant & non-zero probability of negative actors, in most scenarios the outlined axioms will not be completely fulfilled, with the tools of governance being used as outlined in (3).

ChrisLomont 4y ago

>do you think there is zero value to stablecoins? So far they've failed to be stable, so I'm not sure what other aspect you would consider valuable. Such things have failed through all of history. Adding crypto as a buzzword doesn't make them stable.

svnt 4y ago
Arguing that things that have never worked before will continue to not work, barring obvious violations of the laws of physics, has a pretty poor history. A global stablecoin is one area where decentralization might make a significant difference in utility.
- ChrisLomont 4y ago
  >has a pretty poor history It has a terrific history - you must be not counting all the stuff that fails for previously known reasons that people try again. Sure, if you only cherry pick post hoc examples of things that eventually worked, then you can claim a poor history. But the correct evaluation is to pick all things being tried right now by any person on the planet, and measure how many were new and worked for the first time. You know what does have a poor history? People claiming something will work because they once saw some unrelated thing work and assuming that means all things will work, no matter what the previous evidence. >barring obvious violations of the laws of physics Why limit yourself to physics? Those are not the only laws that govern how societal structures work. Also is it possible that the reason some dreams in economics fail because they eventually hit physics? The same works for crypto. Santa isn't real. Unicorns don't live in the chimney. There is no free energy, despite probably 10s to 100s of thousands of people and inventions that said there were. All those people that found counterexamples to Fermat's Last Theorem were wrong. The list of medical things tried well after they were known to be wrong is astounding, and none of those things will likely ever, ever work. I could go on and on. It's far easier to make up stuff that will not work than to make up stuff that possibly could work or definitely works. So no, most things that currently don't work will never work, which is how we acquired the knowledge we have - we ruled out dumb and stupid things. There is a tiny, tiny sliver on the edge that is undecided, and that is where almost all new things and inventions come from. The vast landscape of settled knowledge will stay that way. So, as to stablecoins, and mostly crypto in general - this is what happens when programmers generally wildly ignorant of the reasons for how modern finance work try to make modern finance. Since they're mostly ignorant of why the system has evolved to where it is over millennia of knowledge, they're simply trying to reinvent all that stuff one destroyed speculator at a time. The current stable coins imploded as nearly anyone with much knowledge about econ would have guessed. I didn't follow them closely, but one night a friend carefully explained all the processes behind (I think it was) Luna. At one point I told him that the pieces he explained form a dynamic equilibrium instead of a static equilibrium, which means a little perturbation and the whole things goes off the rails. He remarked that my insight, after hearing the details for the first time, was exactly what did happen. It's funny watching crypto slowly try to reinvent every financial item that failed and do exactly the same things that caused previous things to fail. Stable coins are not new, after all. It baffles me that people keep trying to do things that are simply dumb, either out of hubris, greed, or ignorance. Good luck on whatever stable coins you expect to happen. If they keep it up long enough they might eventually invent financial derivatives, but I expect that to be when the world has already moved past those and found yet better products.
  - svnt 4y ago
    Congratulations on your discovery of dynamical systems. You describe the very scenario where stablecoins come into being, but you are too perfectly rational to engage in that creative behavior. That’s fine. You admit others probably will but decide it will be a failure at the point where it works because someone else will have somehow bypassed this whole process. I don’t hold any stablecoins or care if it works.
dcolkitt 4y ago
USDC and DAI both have a spotless record of stability.
- ChrisLomont 4y ago
  All claimed pegged value items are spotless until they fail. USDC is exactly the same as every non-fiat currency, all claimed back by commodity X, all have failed once economies got tough. USDC does nothing, zero, nada, that literally hundreds of places tried over the past 200 years. It will fail, for the same reasons. That they haven't imploded over 4 years with tiny usage is not special. It is fascinating how they've changed their claims over time, and are no where near transparent on what backs them at the moment. Good luck with yet another repeat of bad ideas. DAI has not even stayed pegged to the dollar over it's few year lifetime. I don't know how you call that spotless. It requires suspended disbelief to claim these things.

gonzo41 4y ago

I don't see any value in reinventing money. All of the place you listed need better governance more than anything else.

x-complexity 4y ago
> I don't see any value in reinventing money. Due to the subjectivity of this statement, there is little-to-no area for debate. It is of my belief that the limits of programmable money should be probed, tested, & examined: Currently, the traditional banking infrastructure does not allow for such automation, and the attempts to do so are unfortunately dependent on banks that have the ability to censor transactions if coerced to do so, whether via national security concerns, politics, mob rule, etc. This is especially concerning to me as there's a non-zero chance that my government will block my financial transactions simply because of my beliefs & lifestyle (G in anti-LGBTQ+ country). This consequently leads to the next sentence: > All of the place you listed need better governance more than anything else. That statement is predicated upon the following axioms: 1) There is a person / a group of people close enough to the governance tools that can both (a) enact the necessary changes & (b) defend said tools from manipulation/corruption 2) That the "change-enactors" can competently use said tools without adverse effects 3) (potential subset of 1(b)) That said enactors will not use said tools on scapegoats/critics/political targets 4) (potential subset of 1(b)) The enactors can be trusted to use said tools 5) There's a system in place to combat misuse of said tools, & that can be deployed in a timely manner 6) (potential subset of 1(b)) The enactors will not use said tools on said misuse combat system 7) The punishment for governance tool misuse is sufficient enough to act as a detractor for such actions 8) That said misuse combat system will not in itself be misused (The "Who Watches the Watchmen?" problem) Assuming that all of the axioms can be fulfilled, I have no qualms or objections to your statement: Such a system in place will no doubt be more efficient & effective. It should be noted however that the hidden cost (centralization of control/power) will be a vector for abuse, & will attract those that want said power/control. In addition, due to the pigeonhole principle and the significant & non-zero probability of negative actors, in most scenarios the outlined axioms will not be completely fulfilled, with the tools of governance being used as outlined in (3).