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Genuine question: could someone explain the real value of stablecoins? I always hear hand waivy notions like “no middleman,” “faster settlement,” and “lower fe

Genuine question: could someone explain the real value of stablecoins? I always hear hand waivy notions like “no middleman,” “faster settlement,” and “lower fees,” but it has to be exchanged to fiat somewhere to be spent right? And there are fees and settlement periods there? Many fiat P2P services are instant as well - when i Venmo a friend, they see it instantly. When I transfer to my bank, that may take several days to settle. But exchanging USDC for USD and transferring off the exchange to my bank will also take several days. People always say “it COULD be used this magic way,” but I’ve never heard anyone say, “it IS used this magic way.” What is the killer use case I’m missing?

chii 1y ago
> real value of stablecoins? to be able to transact it into other coins without going through a fiat exchange.
- soco 1y ago
  There's no difference whether I have stablecoin A or stablecoin B. The original question is, what can I do with any of them better? Except buying influence in case of the presidential ones.
  - Ekaros 1y ago
    Gamble on crypto market... So strange that fiat with single extra step is so popular there. I thought it was all about not being beholden by fiat currency... My guess is that it is just trying to avoid any legislation that would come into play when using pure fiat balances.
- endymion-light 1y ago
  Genuine question, what's the current comparison of fees for say exchanging $1000 dollars into a currency like euros compared to a fiat exchange using stablecoins? I'm not particularly well versed into crypto but every time i've attempted anything similar it's always seemed wildly more expensive to do it via crypto than going into a currency exchange.
westpfelia 1y ago
Its a way to add legitimacy to transactions. The idea is that 1 stable coin (usdt, tether, ect) equals 1 dollar. So you buy 100 tether for 100 dollars and you use that to buy your bitcoin. And that tether is supposed to be backed 1 to 1 with assets/cash. The problem is they arent. Tether for instance refuses to be properly audited. They keep saying that between cash and cash equivilants they are in parity. But per a Galaxy Research article its probably backed by 3% cash. and the rest is treasuries and commericial paper holdings. Which means that if some shit were to go down best case they can make 3% of people good. And the rest... who the hell knows. Its all a scam.
- Esophagus4 1y ago
  Thank you - so, why buy your bitcoin in a stablecoin vs in USD at an exchange? Oh, is this so you move in and out of BTC whenever you need at an exchange, and rather than offboarding to USD, you stay in the ecosystem by just holding USDT?
c9o 1y ago
[dead]
Cthulhu_ 1y ago
The "real value" is in the name, stability; people quickly stopped using Bitcoin for buying pizzas because its value was so unpredictable, making it more suitable for an investment than a currency, which made its value even more unpredictable because it wasn't spent predictably anymore. Like, there was a webshop that accepted BTC, doing real-time ish price conversion between USD and BTC; if I was that webshop, I wouldn't have sold the BTC for fiat as it came in, but just let it accumulate until the BTC price went up favorably. A $100 purchase would become $200 with the BTC price appreciation over time. Anyway yeah. Killer use case is a digital currency whose value is stable and predictable, so actually usable as a digital currency.
- Esophagus4 1y ago
  Thanks! So are people using it to buy and sell stuff? It seems like I’ve never seen a merchant accept a stablecoin as payment. Is that happening?
- senko 1y ago
  Do people actually use them for anything outside buying or selling other cryptocurrencies?
Geee 1y ago
They're not typically exchanged for fiat currency. They're mostly used on crypto exchanges and on DeFi, and also increasingly as everyday money in places where USD is not the official or legal currency. The killer use case has mostly been providing USD liquidity for exchanges worldwide.
- Esophagus4 1y ago
  Thanks! If USD is not official currency in those places, then does stablecoin become an underground, unregulated currency?
  - Geee 1y ago
    It depends on the country. In most countries holding and using USD (or other) stablecoins is legal, just like it's legal to own foreign cash. Some countries have stricter currency controls and regulations, i.e. holding USD cash might be illegal, but it's not really possible to control stablecoin use.

chii 1y ago

> real value of stablecoins? to be able to transact it into other coins without going through a fiat exchange.

soco 1y ago
There's no difference whether I have stablecoin A or stablecoin B. The original question is, what can I do with any of them better? Except buying influence in case of the presidential ones.
- Ekaros 1y ago
  Gamble on crypto market... So strange that fiat with single extra step is so popular there. I thought it was all about not being beholden by fiat currency... My guess is that it is just trying to avoid any legislation that would come into play when using pure fiat balances.
endymion-light 1y ago
Genuine question, what's the current comparison of fees for say exchanging $1000 dollars into a currency like euros compared to a fiat exchange using stablecoins? I'm not particularly well versed into crypto but every time i've attempted anything similar it's always seemed wildly more expensive to do it via crypto than going into a currency exchange.

westpfelia 1y ago

Its a way to add legitimacy to transactions. The idea is that 1 stable coin (usdt, tether, ect) equals 1 dollar. So you buy 100 tether for 100 dollars and you use that to buy your bitcoin. And that tether is supposed to be backed 1 to 1 with assets/cash. The problem is they arent. Tether for instance refuses to be properly audited. They keep saying that between cash and cash equivilants they are in parity. But per a Galaxy Research article its probably backed by 3% cash. and the rest is treasuries and commericial paper holdings. Which means that if some shit were to go down best case they can make 3% of people good. And the rest... who the hell knows. Its all a scam.

Esophagus4 1y ago
Thank you - so, why buy your bitcoin in a stablecoin vs in USD at an exchange? Oh, is this so you move in and out of BTC whenever you need at an exchange, and rather than offboarding to USD, you stay in the ecosystem by just holding USDT?

c9o 1y ago

[dead]

Cthulhu_ 1y ago

The "real value" is in the name, stability; people quickly stopped using Bitcoin for buying pizzas because its value was so unpredictable, making it more suitable for an investment than a currency, which made its value even more unpredictable because it wasn't spent predictably anymore. Like, there was a webshop that accepted BTC, doing real-time ish price conversion between USD and BTC; if I was that webshop, I wouldn't have sold the BTC for fiat as it came in, but just let it accumulate until the BTC price went up favorably. A $100 purchase would become $200 with the BTC price appreciation over time. Anyway yeah. Killer use case is a digital currency whose value is stable and predictable, so actually usable as a digital currency.

Esophagus4 1y ago
Thanks! So are people using it to buy and sell stuff? It seems like I’ve never seen a merchant accept a stablecoin as payment. Is that happening?
senko 1y ago
Do people actually use them for anything outside buying or selling other cryptocurrencies?

Geee 1y ago

They're not typically exchanged for fiat currency. They're mostly used on crypto exchanges and on DeFi, and also increasingly as everyday money in places where USD is not the official or legal currency. The killer use case has mostly been providing USD liquidity for exchanges worldwide.

Esophagus4 1y ago
Thanks! If USD is not official currency in those places, then does stablecoin become an underground, unregulated currency?
- Geee 1y ago
  It depends on the country. In most countries holding and using USD (or other) stablecoins is legal, just like it's legal to own foreign cash. Some countries have stricter currency controls and regulations, i.e. holding USD cash might be illegal, but it's not really possible to control stablecoin use.