31–40 of 79 posts
If a group wants to peg a coin to the dollar, why don't they just issue coins for $1, put that directly into a savings account, and allow redemption of any coin for $1?
This is the situation with Tethers right now.
Also claims that a collateralized stablecoins "only works if the collateral value keeps rising", and that selling something is equivalent to using it as collateral
The thing the author seems to be confused about is that when people talk about stable coin they aren't claiming that the market can't be irrational. They are claiming that over a sufficient period of time the coin will trend towards its target. In the case of DAI today, that target is 1 DAI == 1 USD. This means that while the market may irrationally buy/sell DAI for more or less than 1 USD, over time it will trend to…
> They are claiming that over a sufficient period of time the coin will trend towards its target This is not what the MakerDAO team, nor any other stablecoin shill, is claiming. They are claiming the system "ensures" that the stablecoin is "a money that will always maintain its purchasing power." "Ensure" and 'always' don't mean "trend towards over time." They mean always, as in all the time. If their intention is to…
It is funny because this guy also fundamentally doesn't understand how Basecoin works. "If the price of 1 BASE is above $1, the blockchain prints new $BASE to holders of “BASE Shares” (mother of god), a standalone cryptocurrency which is issued in the genesis block and held by early adopters, which then distributes new Basecoins to them as a “dividend.” Holders of “BASE Shares” are free to either hold onto their Divi…
Only if the price is below $1. You have to read the next paragraph of the blog post to get to that.
Earlier quoted context omitted.
If there are thin enough markets of course "always maintains purchasing power" is impossible. This is true for USD ad well.
The difference being that USD doesn't pretend to be pegged to anything. My point about MakerDAO is that the development team is claiming the impossible is possible.
I guess you're technically correct that their marketing material claims to go beyond this in a eay which is technically impossible
Earlier quoted context omitted.
> They are claiming that over a sufficient period of time the coin will trend towards its target This is not what the MakerDAO team, nor any other stablecoin shill, is claiming. They are claiming the system "ensures" that the stablecoin is "a money that will always maintain its purchasing power." "Ensure" and 'always' don't mean "trend towards over time." They mean always, as in all the time. If their intention is to…
But isn't 'hover around the same value long term' maintaing the purchasing power? I guess if you interpret the marketing as 'will literally always be worth $1.00' you'll be disappointed but it's weird to take that interpretation when it's not really attainable for anything that isn't a US dollar.
If a group wants to peg a coin to the dollar, why don't they just issue coins for $1, put that directly into a savings account, and allow redemption of any coin for $1?
The thing the author seems to be confused about is that when people talk about stable coin they aren't claiming that the market can't be irrational. They are claiming that over a sufficient period of time the coin will trend towards its target. In the case of DAI today, that target is 1 DAI == 1 USD. This means that while the market may irrationally buy/sell DAI for more or less than 1 USD, over time it will trend to…
"The market can remain irrational longer than you can remain solvent", springs immediately to mind.
edit: Also, pegging a cryptocurrency to the dollar seems almost comedically perverse. What is it for?
It is funny because this guy also fundamentally doesn't understand how Basecoin works. "If the price of 1 BASE is above $1, the blockchain prints new $BASE to holders of “BASE Shares” (mother of god), a standalone cryptocurrency which is issued in the genesis block and held by early adopters, which then distributes new Basecoins to them as a “dividend.” Holders of “BASE Shares” are free to either hold onto their Divi…