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Stablecoins on any number of low cost networks are fine for small payments (I haven’t lost anything, not even $0.01 in 10+years, vs tens of thousands in chargeb

by K0balt 1y ago

Stablecoins on any number of low cost networks are fine for small payments (I haven’t lost anything, not even $0.01 in 10+years, vs tens of thousands in chargebacks, mostly fraudulent, for credit card processors). I factor in 2.5% total costs for transaction frictions, historically that is a bit over 3x our actual average cost from payer to bank account, but it would easily cover the occasional loss of a day or two of sales in a catastrophe. Pick a top 5 stablecoin that has a good reputation and at least 3 years, on a network with at least that, and settle your accounts daily, or whenever the accumulation represents a significant dent if lost. The approximate aggregate risk-cost of major (top 10) stablecoins is somewhere south of .001% per day, and is better than the aggregate risk-cost of national fiat currencies, which unremarkably collapse or suffer catastrophic inflation and rebasing on a regular basis. There are frequently several undergoing this process at any given time.

jcalvinowens 1y ago
> The approximate aggregate risk-cost of major (top 10) stablecoins is somewhere south of .001% per day, and is better than the aggregate risk-cost of national fiat currencies This thinking is dangerous and stupid. Learn from history: https://en.m.wikipedia.org/wiki/Black_Wednesday https://en.m.wikipedia.org/wiki/Black_Wednesday This "stablecoin" garbage needs to die yesterday: a lot of people are going to lose their shirt when the first one blows up. Fixing exchange rates is folly, yet here we go again...
- K0balt 1y ago
  Why would I care if a stablecoin blows up? My payment cost allocation more than compensates for that possibility and my losses in a worst case scenario would be eclipsed to oblivion by the cost savings I have already realized.
  - jcalvinowens 1y ago
    > my losses in a worst case scenario would be eclipsed to oblivion by the cost savings I have already realized. Please elaborate :)
    - K0balt 1y ago
      My theoretical potential losses compared to the costs of the payment processsors I ditched, and the chargebacks we used to deal with. International payment processing is quite expensive, both on a teansaction and on an administrative basis. My worst case total risk exposure is approximately the same as the cost of 3 months of payment processing overhead, without counting fraudulent chargebacks and “we are going to freeze your account because we can” risks. FWIW in the last 60 years I have lost way more money to fraud and theft dealing with banks and cash then I ever will using cryptocurrency. On a total, or a percentage basis. I see the risk profile, when properly managed, to be much, much lower using blockchain solutions.
      - jcalvinowens 1y ago
        > My worst case total risk exposure is approximately the same as the cost of 3 months of payment processing Okay, yes: what you're describing is the actual utility of these things. I think you underestimate how many people dealing in them are using them much less intelligently than you are. They are being marketed in an extremely dishonest way, as a safe long term store of value. I regularly overhear normal people at my local bars talking about how they're "investing big in stablecoins" and it terrifies me.
- K0balt 1y ago
  >>This "government issued fiat currency" garbage needs to die yesterday: a lot of people are going to lose their shirt when the first one blows up. What you are saying is a risk endemic to all fiat currencies, including stablecoins. All symbolically represented forms of value quantization are subject to a failure of confidence. Cryptocurrencies are nothing new in this regard. All money is memetic in nature.
  - jcalvinowens 1y ago
    That's like saying "base jumping isn't really more dangerous than flying commercial, after all we're all going to die anyway". Fiat currencies have militaries. Your stablecoin doesn't.
    - K0balt 1y ago
      That’s one of the reason the stablecoins won’t be taking my assets? Idk what your point is but it doesn’t seem like you are debating from a point of rational examination. Weird, people on the internet spewing BS? Who’d have thought?
      - jcalvinowens 1y ago
        Well, losing three months of revenue is going to really hurt when the stablecoin inevitably eats shit: hope you're prepared for that. The risk is obviously lower because you aren't parking money there. I could certainly see how you might come out ahead in fees for certain international transactions. But your original claim was that the aggregate risk-cost of dealing in stablecoins is lower than real currencies, and that is absolutely preposterous: you aren't accounting for all the risks.

by K0balt 1y ago

jcalvinowens 1y ago

> The approximate aggregate risk-cost of major (top 10) stablecoins is somewhere south of .001% per day, and is better than the aggregate risk-cost of national fiat currencies This thinking is dangerous and stupid. Learn from history: https://en.m.wikipedia.org/wiki/Black_Wednesday https://en.m.wikipedia.org/wiki/Black_Wednesday This "stablecoin" garbage needs to die yesterday: a lot of people are going to lose their shirt when the first one blows up. Fixing exchange rates is folly, yet here we go again...

K0balt 1y ago
Why would I care if a stablecoin blows up? My payment cost allocation more than compensates for that possibility and my losses in a worst case scenario would be eclipsed to oblivion by the cost savings I have already realized.
- jcalvinowens 1y ago
  > my losses in a worst case scenario would be eclipsed to oblivion by the cost savings I have already realized. Please elaborate :)
  - K0balt 1y ago
    My theoretical potential losses compared to the costs of the payment processsors I ditched, and the chargebacks we used to deal with. International payment processing is quite expensive, both on a teansaction and on an administrative basis. My worst case total risk exposure is approximately the same as the cost of 3 months of payment processing overhead, without counting fraudulent chargebacks and “we are going to freeze your account because we can” risks. FWIW in the last 60 years I have lost way more money to fraud and theft dealing with banks and cash then I ever will using cryptocurrency. On a total, or a percentage basis. I see the risk profile, when properly managed, to be much, much lower using blockchain solutions.
    - jcalvinowens 1y ago
      > My worst case total risk exposure is approximately the same as the cost of 3 months of payment processing Okay, yes: what you're describing is the actual utility of these things. I think you underestimate how many people dealing in them are using them much less intelligently than you are. They are being marketed in an extremely dishonest way, as a safe long term store of value. I regularly overhear normal people at my local bars talking about how they're "investing big in stablecoins" and it terrifies me.
K0balt 1y ago
>>This "government issued fiat currency" garbage needs to die yesterday: a lot of people are going to lose their shirt when the first one blows up. What you are saying is a risk endemic to all fiat currencies, including stablecoins. All symbolically represented forms of value quantization are subject to a failure of confidence. Cryptocurrencies are nothing new in this regard. All money is memetic in nature.
- jcalvinowens 1y ago
  That's like saying "base jumping isn't really more dangerous than flying commercial, after all we're all going to die anyway". Fiat currencies have militaries. Your stablecoin doesn't.
  - K0balt 1y ago
    That’s one of the reason the stablecoins won’t be taking my assets? Idk what your point is but it doesn’t seem like you are debating from a point of rational examination. Weird, people on the internet spewing BS? Who’d have thought?
    - jcalvinowens 1y ago
      Well, losing three months of revenue is going to really hurt when the stablecoin inevitably eats shit: hope you're prepared for that. The risk is obviously lower because you aren't parking money there. I could certainly see how you might come out ahead in fees for certain international transactions. But your original claim was that the aggregate risk-cost of dealing in stablecoins is lower than real currencies, and that is absolutely preposterous: you aren't accounting for all the risks.