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Not your keys etc. Picture this. You're in Lebanon circa 2020. You face a guaranteed loss of 90%+ if kept in traditionally Lebanese system. Or you can self cus

Not your keys etc. Picture this. You're in Lebanon circa 2020. You face a guaranteed loss of 90%+ if kept in traditionally Lebanese system. Or you can self custody a usd stablecoin. Which do you choose?

kube-system 4y ago
> you put it all in UST > whoops now you lost 98% Stablecoins aren’t a zero-trust system. It’s a system where you need to trust both the underlying currency and the developer.
- notch656a 4y ago
  Is anyone using crypto as a hedge seriously dumb enough not to diversify their holdings?
  - kube-system 4y ago
    Yes, more than one person has lost their life savings investing in garbage coins. But if I can’t trust cryptocurrencies either, I might as well use a bank.
    - notch656a 4y ago
      I mean it sounds as if you can't trust either one on an individualized basis, but it may be more pragmatic to diversify your hedge with different coins than diversify 20 different bank accounts which all suffer under a broken national framework.
    - delabay 4y ago
      Using a bank in Lebanon is the same as losing your life savings
      - kube-system 4y ago
        If we can judge banks by the worst of them, then we can judge crypto by the worst of them. As for me, if my US FDIC insured bank fails, I’ve got bigger problems than money.
        notch656a 4y ago
        Western banks will likely never fail in the way banks can fail in a place like Lebanon. In a situation where all US banks are falling flat, the fed will just happily print money to fulfill the FDIC insurance and you'll be left with some great toilet paper.
  - kebman 4y ago
    You can't effectively "diversify" by buying other cryptos. To truly diversify, you have to buy completely different assets. Assets that aren't crypto, but in completely different sectors, such as - oh, IDK - the sugar industry, or car manufacturers, government bonds, even gold. Crypto is extremely high risk, especially if you venture outside Bitcoin. But to many it's far more accessible than even the stock market.
    - notch656a 4y ago
      >You can't effectively "diversify" by buying other cryptos. To truly diversify, you have to buy completely different assets. The context was crypto. I was talking about diversifying your crypto, surely the readers here aren't as pedantically naive as to confuse diversifying crypto holdings with a fully diversified basket of different products. And of course owning different coins is diversification: owning multiple assets instead of just one is practically textbook example of increasing diversification.
      - kebman 4y ago
        I'm aware that "the context was crypto." Except when that's the context, non-savvy people need to learn what "diversification" really means, and it's not buying other cryptos, which is just a horrible euphemism for speculation. But if that's what you're really claiming, then—no matter the "context"—you're just scamming them into buying something that is far less "safe" than Bitcoin. Bitcoin of course being the "safest" crypto, since it's so ubiquitous, and because no one person really controls it. Not so even for Ethereum, even though it's the next best thing to "diversify" into (read: speculate on) in regards to crypto. I think the casual reader needs to know that distinction, lest they get a nasty surprise such as—oh IDK—Bitcoin dumping 80%. Because if it does, then all the other cryptos will most likely dump 95% or more. Or worse, go to zero like the "safe bet" Luna. And so much for "diversification!" It's like that due how all crypto coins are high risk assets that are all highly correlated to Bitcoin. And so the correct wording for buying other cryptos should never be "diversification" but speculation.
        notch656a 4y ago
- searchableguy 4y ago
  > Stablecoins aren’t a zero-trust system. It’s a system where you need to trust both the underlying currency and the developer. You can minimise and swap these risks for others. It all depends on what the threat model is. The collateral can be asset backed diversified across multiple countries and not dependent on a single currency. Some of the newer and upcoming stablecoins use asset in crypto to back themselves to reduce any dependency on country backed currency reserves. Developers can and do burn control of the contracts once its established that they are safe and not exploitable. Of course this is a risk where you cannot make any future change but protect against risk of developers rugging you.
- delabay 4y ago
  Still beats putting it in a Lebanese bank

kube-system 4y ago

> you put it all in UST > whoops now you lost 98% Stablecoins aren’t a zero-trust system. It’s a system where you need to trust both the underlying currency and the developer.

notch656a 4y ago
Is anyone using crypto as a hedge seriously dumb enough not to diversify their holdings?
- kube-system 4y ago
  Yes, more than one person has lost their life savings investing in garbage coins. But if I can’t trust cryptocurrencies either, I might as well use a bank.
  - notch656a 4y ago
    I mean it sounds as if you can't trust either one on an individualized basis, but it may be more pragmatic to diversify your hedge with different coins than diversify 20 different bank accounts which all suffer under a broken national framework.
  - delabay 4y ago
    Using a bank in Lebanon is the same as losing your life savings
    - kube-system 4y ago
      If we can judge banks by the worst of them, then we can judge crypto by the worst of them. As for me, if my US FDIC insured bank fails, I’ve got bigger problems than money.
      - notch656a 4y ago
        Western banks will likely never fail in the way banks can fail in a place like Lebanon. In a situation where all US banks are falling flat, the fed will just happily print money to fulfill the FDIC insurance and you'll be left with some great toilet paper.
- kebman 4y ago
  You can't effectively "diversify" by buying other cryptos. To truly diversify, you have to buy completely different assets. Assets that aren't crypto, but in completely different sectors, such as - oh, IDK - the sugar industry, or car manufacturers, government bonds, even gold. Crypto is extremely high risk, especially if you venture outside Bitcoin. But to many it's far more accessible than even the stock market.
  - notch656a 4y ago
    >You can't effectively "diversify" by buying other cryptos. To truly diversify, you have to buy completely different assets. The context was crypto. I was talking about diversifying your crypto, surely the readers here aren't as pedantically naive as to confuse diversifying crypto holdings with a fully diversified basket of different products. And of course owning different coins is diversification: owning multiple assets instead of just one is practically textbook example of increasing diversification.
    - kebman 4y ago
      I'm aware that "the context was crypto." Except when that's the context, non-savvy people need to learn what "diversification" really means, and it's not buying other cryptos, which is just a horrible euphemism for speculation. But if that's what you're really claiming, then—no matter the "context"—you're just scamming them into buying something that is far less "safe" than Bitcoin. Bitcoin of course being the "safest" crypto, since it's so ubiquitous, and because no one person really controls it. Not so even for Ethereum, even though it's the next best thing to "diversify" into (read: speculate on) in regards to crypto. I think the casual reader needs to know that distinction, lest they get a nasty surprise such as—oh IDK—Bitcoin dumping 80%. Because if it does, then all the other cryptos will most likely dump 95% or more. Or worse, go to zero like the "safe bet" Luna. And so much for "diversification!" It's like that due how all crypto coins are high risk assets that are all highly correlated to Bitcoin. And so the correct wording for buying other cryptos should never be "diversification" but speculation.
      - notch656a 4y ago
searchableguy 4y ago
> Stablecoins aren’t a zero-trust system. It’s a system where you need to trust both the underlying currency and the developer. You can minimise and swap these risks for others. It all depends on what the threat model is. The collateral can be asset backed diversified across multiple countries and not dependent on a single currency. Some of the newer and upcoming stablecoins use asset in crypto to back themselves to reduce any dependency on country backed currency reserves. Developers can and do burn control of the contracts once its established that they are safe and not exploitable. Of course this is a risk where you cannot make any future change but protect against risk of developers rugging you.
delabay 4y ago
Still beats putting it in a Lebanese bank