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Bitcoin’s reliance on stablecoins harks back to the Wild West of finance

wsj.com

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Re: Bitcoin’s reliance on stablecoins harks back to the Wild West of finance

#41

Post by politician »

gruez wrote: post #30
nexuist wrote: post #28

Earlier quoted context omitted.

> the smart contract for USDC can block any address containing USDC at any time Is this documented anywhere? What's the procedure within USDC to perform this block? Is it just whoever has the right private key can execute this blocking function and propagate it through the blockchain?

>Is this documented anywhere? What's the procedure within USDC to perform this block? https://etherscan.io/address/0xa0b86991c6218b36c1d19d4a2e9eb... The smart contract has a "blacklist" function.

{ blacklist, unBlacklist, updateBlacklister (add), isBlacklist }

Looks like a full API to manage a blacklist and an authorization scheme for adding blacklist administrators.

Re: Bitcoin’s reliance on stablecoins harks back to the Wild West of finance

#43

Post by [deleted] »

gruez wrote: post #31
initplus wrote: post #20

Tether as an organization operates with no transparency, and has a toxic symbiotic relationship with exchanges. I'm certain that Tether has backroom relationships with major exchanges - Tether provides liquidity to exchanges in the form of short term USDT loans. So Tether can claim their issues are backed by real reserves https://tether.to/wp-content/uploads/2021/05/tether-march-31... , omitting the convenient fact t…

>I'm certain that Tether has backroom relationships with major exchanges - Tether provides liquidity to exchanges in the form of short term USDT loans. Is there a reason why exchanges even need such loans?

[deleted]

Re: Bitcoin’s reliance on stablecoins harks back to the Wild West of finance

#44

Post by ProjectArcturis »

simias wrote: post #23
young_unixer wrote: post #17

Earlier quoted context omitted.

Tether imploding would just mean a couple more years to stack up. People who don't understand the technology would flee, thinking it was just a fad, those that do understand it would stay, stack up and wait a few years.

Ah yes, the "technology". Any day now. Won't know what hit them. Around the corner really, alongside cold fusion and the chewing gum that replaces toothbrushes.

It's only been 12 years! I'm sure someone will come up with the killer blockchain app soon.

Re: Bitcoin’s reliance on stablecoins harks back to the Wild West of finance

#46

Post by mustafa_pasi »

superkuh wrote: post #38

Bitcoin's reliance on Stablecoins? I think the wsj is confused and has this backwards. Additionally, like all mainstream media sources, they cannot seem to understand that Bitcoin is what happens on the blockchain and that 99% of the breathless hype about trading and finance bro stuff is completely off chain and only tangentially related to Bitcoin.

In practice people care about what happens off chain as long as it affects the exchange value. And the article is talking about the alleged Tether manipulation of Bitcoin's exchange value.

Re: Bitcoin’s reliance on stablecoins harks back to the Wild West of finance

#48

Post by diab0lic »

lhorie wrote: post #37
Havoc wrote: post #3

Honestly stablecoins - specifically tether - is about the only thing about crypto that genuinely frightens me. Crypto rollercoaster - up down sideways and in circles - sure I'm game. Tether that is stable until it implodes...hell no. Even without direct exposure the blast radius worries me.

Honest question. How's Tether imploding different from e.g. a public company suddenly shutting down and its stock price going to zero? I imagine the two scenarios being similar in the sense that anyone holding tether would eat a big loss, but aside from the event obviously affecting investor sentiment, wouldn't it just be more or less business as usual for other coins? As in, couldn't BTC/ETH/whatever people just use…

A large company going bust doesn't imply that demand for other public companies was somehow fabricated.

The more apt comparison here would be something along the lines of the recent run up in TSLA being the result of purchasing from the infinite margin bug from Robinhood a while back. It would turn out the demand wasn't real, only there because it was free.

The implications for Bitcoin and other crypto also purchased with Tether, or with Bitcoin are a lot bigger than you'd imagine.

Re: Bitcoin’s reliance on stablecoins harks back to the Wild West of finance

#50

Post by peteretep »

nodesocket wrote: post #36
TacticalCoder wrote: post #16

Earlier quoted context omitted.

> Remember, Tether has no upside. There is no reason to ever hold Tether for any length of time. It looks like USDC, issued by a company co-owned by Coinbase (YC incubated right?) and Circle, is quickly replacing tether. One year ago there were about 1/10th of USDC compared to tether, now it's half. Apparently USDC are really fully backed by real USD and the smart contract for USDC can block any address containing US…

I hold a decent sized block of USDC via BlockFi and earn 8.6% APY. I realize there is inherent risk (after all, I am earning 8.6%) but compare that to 0.5% earned at Goldman Sachs or traditional FDIC insured bank accounts and it's a risk I am willing to take. By default, BlockFi issues GUSD as their stablecoin of choice, but Gemini (GUSD) market cap is only $145m, whereas USDC market cap is 22 with a B billion. Ultim…

> but compare that to 0.5% earned at Goldman Sachs or traditional FDIC insured bank accounts

Why on earth would you compare it to those rather than an index tracker?

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