4 ms·
Stablecoins are just sketchy online banks pretending they have dollars, with users pretending they're spending dollars. The minute the illusion is ripped out,
by dragontamer 4y ago
Stablecoins are just sketchy online banks pretending they have dollars, with users pretending they're spending dollars.
The minute the illusion is ripped out, it gets LunaCoined and collapses. The illusion can be held seemingly perpetually at 0% interest rates, but now at 4.75% FFR, I have my doubts that stablecoins make much sense.
- wslh 4y agoSketchy or not it is usable. BitTorrent protocol is used for piracy but it is also used.
- dragontamer 4y agoMy excel spreadsheet with money that I pass between my friends during a vacation is also usable to determine settlements. Which is more than the accounting going on at FTX by the way. And that's why those depositors lost everything. -------- Many thousands, maybe 10s of thousands or even 100s of thousands have lost their entire accounts at FTX, Celsius, and other "cryptocoin" schemes or "stablecoin" schemes like Gemini. This is well documented and understood. Its a very simple issue: cryptocoin bros lie, your money isn't safe or kept with any kind of accounting practices with them. And with all the bullcrap about "decentralized" or "trust-free" accounting, its all just lies to get people to deposit more money into shady accounts.
- wslh 4y agoAs i said in another comment in the same thread: we are looking at a very tiny timeframe. Crypto was an opportunity for fraudsters, there were similar opportunities in the past for the financial system. Fraudsters are incredible fast, more than entrepreneurs. Just look at other shady schemes in CeFi.
- dragontamer 4y agoYou know that the US Dollar (and the banking system) survived 19% FFR interest rates in the 1981, right? 4.75% isn't even that much by historical standards of the past century.
- wslh 4y agoRome also survived a lot of things.
- ChainOfFools 4y ago> trust-free "trust us, it's trustless. " -kleptocurrency huckster gospel pg 1 verse 1
- SkyMarshal 4y agoExactly. Stablecoins are a misnomer. They’re stable until they’re not, then they implode.
- wslh 4y agoCeFi systems have the same problem, it is just that now DeFi is more extreme.
- dragontamer 4y agoWe haven't seen anyone lose a true FDIC-insured dollar in over a hundred years. Furthermore, there have only been rare occasions where Money Markets have broken the bank, less than 5 in the past century. That's dropping from $1 to $0.98. Meanwhile, Tether regularly (every couple of weeks) drops to 98-cents or less. Celsius, Gemini, and FTX all imploded with 100% losses (at least, my friend's "stablecoins" in those accounts were completely lost and no one has given his money back yet)
- pibechorro 4y ago*yet
- dragontamer 4y agoUSDC literally reached 91-cents just 3 weeks ago dude. There is an alarming frequency at which stablecoins break the buck. I'm pointing out imperfect dollar instruments like Money Market Funds that have no insurance and are free to invest into riskier bonds... but even these risky MMFs are far more stable in practice than USDC or Tether, or any other stablecoin for that matter.
- wslh 4y agoUSDC issue was connected to the CeFi world. It is important to highlight that assuming USDC has 100% in banks they will recover the lost money for the interest they receive in normal banks, this is not translated to USDC holders.
- psychlops 4y agoI want to argue with you, but this is true. It doesn't have to be, but it has been the reality. It's also correct when applied to global currencies that peg to the dollar, not just cryptocurrencies.