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This is a really fun well-written and on point set of articles. Thank you for sharing. I feel like at this point there isn't anybody defending stablecoins who
by neumann 1y ago
This is a really fun well-written and on point set of articles. Thank you for sharing.
I feel like at this point there isn't anybody defending stablecoins who isn't using them primarily speculative investment/trading. There has yet to be a usecase for distributed ledger that isn't solved better by a centralised ledger other than niche counter-culture solutions whose users are typically blinkered to the fact that they are already a self-selected techno-elite who can't bring their utopia to the commons. That ended a bit more nasty sounding that I intended, apologies.
- johncole 1y agoI agree, I see very few (none) use cases for crypto that aren’t human misery trafficking. This article seems to explain that well.
- CaptainFever 1y agoBuying NSFW things.
- _9ptr 1y agoExactly
- eszed 1y agoI think the further down the supply chain of "NSFW things" you go the more closely it resembles "human misery trafficking".
- BobaFloutist 1y agoI don't think they were referring to live-action "NSFW things" which is traditionally called "pornography."
- eszed 1y agoThe same applies to drug manufacturing, so far as I'm aware.
- wmf 1y agoThe other legit use for stablecoins is allowing people in Venezuela, Argentina, etc. to hold US dollars while the US government pretends they don't know this is happening. (Officially the US does not encourage dollarization of other economies against their will.) I agree that a centralized US dollar CBDC that isn't run by scammers would be a simpler way to do this.
- pjc50 1y agoThis is basically the valid use case, yes. It turns the bitcoin goldbug inflation paranoia on its head: the stable currency is defined to be the US dollar, and an elaborate proxy system allows people to access that stability when their local government doesn't want them to. Circumventing exchange controls and so on. Although the current government is having a good go at reducing the value of the currency, it's barely budged on the chart.
- baq 1y ago> Circumventing exchange controls and so on. This is the only new thing. Maybe.
- datadrivenangel 1y agoAlso it takes on the mobile phone money providers with direct 'dollars', which means it basically becomes a currency denominated bank.
- potamic 1y agoIf a country does not allow their citizens to exchange currency, then this is as good as a black market and comes with the same risks as obtaining currency through any other black market means.
- nlitened 1y agoCarrying around or storing piles of foreign currency is much riskier than having a USDT wallet. You also cannot fly to another country with cash.
- barumrho 1y agoThis seems to misunderstand stablecoins since it is useless for investing/speculation as the value is just $1 if it's successful in its goal.
- bergen 1y agoI'd argue crypto casinos (pump.fun comes to mind) would not work without stablecoins because no one would back them with real dollars.
- carleverett 1y agoBut stablecoins are backed by real dollars. People hold dollar-backed stablecoins because they believe the US dollar to be the most durable unit of account on the planet. All the proof you really need for that is that most crypto users outside the US still consider the value of their crypto tokens in terms of how many US dollars it’s worth. The author of this article talks about this being a “parasite” to the US monetary system, but it’s hard to think of a better thing that could’ve happened for the US. Not only has it reinforced that dominance… it’s also driven hundreds of billions of dollars of US treasury bills purchases from providers like Tether and USDC. https://tether.to/en/transparency/?tab=reports https://tether.to/en/transparency/?tab=reports
- w10-1 1y agoStable coins are mostly backed by Treasuries, so it’s engineering instability: a run on coin redemption triggers treasury sales which raises interest rates which triggers a run on any asset backed by treasuries like coins, and so on. It’s like the 2008 crash: people speculating because they think housing never goes down, except a market-scale drop can trigger an uncontrollable rush for the exit. With banks and companies permitted to hold coins as assets, the impact is broad but impossible to regulate ex ante, and difficult to model monetarily. It’s what I would do if I were Putin and Xi, frustrated with the western controls on the banking system (that have mostly enabled us not to have to go to war).
- 1y ago
- ChadNauseam 1y ago> There has yet to be a usecase for distributed ledger that isn't solved better by a centralised ledger what about situations where centralized ledgers won't serve you? e.g. someone who wants to buy drugs, or sex workers want to get paid. And you mention "niche counter-culture solutions" but I don't think it's so niche - in 2002, the government of Argentina stole 2/3rds of everyone's savings by forcibly converting their dollar-denominated bank accounts into pesos at a terrible exchange rate. Not having to worry about this because you have a trustworthy government is nice, but it puts you into an elite class of your own.
- wakawaka28 1y agoWhat you're talking about, resistance to government meddling, is more of a function of the currency than the ledger. Cryptocurrencies only work because of people silly enough to buy them in exchange for actual "valuable" or official currencies (which can be imposed on some people in the world at gunpoint). If a cryptocurrency was forced on you at gunpoint, it most certainly would not be one that provided any anonymity. Do cryptocurrencies provide value to people living in third-rate hellhole countries? Perhaps, because they are connected to the outside world. Ideally you could just have a foreign bank account that your country cannot touch. If the big governments gang up on crypto exchanges, then crypto will be worthless. The only reason they don't gang up on the exchanges seems to be that they (the people in government) use crypto for nefarious activities and money laundering. The technological innovations of cryptocurrencies make for good thought experiments or puzzles, but serve as a distraction from their inevitable uselessness.
- lurk2 1y ago> Ideally you could just have a foreign bank account that your country cannot touch. Doesn’t solve the problem as these assets can still be seized by foreign governments.
- carleverett 1y agoI can’t really think of a better, more concise pitch for cryptocurrencies than “ideally you could just have a foreign bank account that your country cannot touch.”
- csomar 1y agoI agree with the premise that on a tech basis, a centralized ledger is just as good, if not better, than a decentralized one. The problem stablecoins are solving are self-inflicted: KYC to open a bank account, restricted nationalities, account freezes, capital controls, taxation over-reach, etc. At some point someone figured out that if they start over, there is a lot of “value” to be unlocked out there; and paid/lobbied/sponsored the right person to execute on that.
- joshtbradley 1y agoWould you consider Stripe and PayPal also interested in speculative investment/trading? They seem responsible to me. Also, stablecoins aren’t speculative. Cryptocurrencies absolutely are. But stablecoins are pegged to USD, hence “stable.” I think you’re right to criticize crypto as a techno-elite project. However I think stablecoins have a legitimate use case for billions of people who don’t have access to good banks, or a stable currency, and can’t afford traditional fees. IMO it’s one of the best things to come out of crypto.
- laserbeam 1y ago> There has yet to be a usecase for distributed ledger that isn't solved better by a centralised ledger As I understand it, many countries in the European Union use distributed ledgers for elections. Essentially it lets you cross reference votes and store that database across servers in multiple countries. It also prevents post-election data tampering by the state holding the election. My understanding is this this system is not an open to every random Joe who wants to have a server (like bitcoin is). I think you still need to be a state actor to be part of the distributed database (so it's not a zero trust environment). (Unfortunately, I don't have any good links to back this claim up)
- FergusArgyll 1y agoThis is an awful case of preconceived notions! Stablecoins are not speculative or investments at all - their price stays the same. That's where stable in stablecoin comes from. You see crypto and think day trading
- throw101010 1y ago> their price stays the same. TerraUSD enters the chat You're right that they aren't speculative in the financial sense of "hopefully gaining value over time", but you do speculate (in the more general sense) on the fiat-pegging mechanism(s) to work to preserve the value you are storing in them...
- scyclow 1y agoThere are different flavors of stablecoins though. There's the ponzi scheme flavor that is propped up based on hand waving alchemy, and there's the boring (and now regulated) flavor that's actually backed by real money.
- lavezzi 1y agoAnd who is the authority to prove which stablecoins are ponzis and which are 'backed by real money'?
- xboxnolifes 1y agoSure, in the same way that holding USD is speculating that the government won't halve its value tomorrow. There's speculation, and then there's speculation.