Report on Stablecoins [pdf] • Hacker News Board

Re: Report on Stablecoins [pdf]

#181

Post by brightball » Mon, Nov 01, 2021, 9:54 PM UTC

dustingetz wrote: post #80

Animats wrote: post #47

This is good. The backing of stablecoins is a very real issue. As the Treasury points out, there's a very real possibility of a run. Two stablecoins have crashed so far, SafeDollar SDO, and $TITAN. They went all the way to zero. Can Tether survive a net outflow? Probably not. They don't have the collateral. Dai is really a derivative of Etherium. Dai is backed by Etherium at 150%. So value in Dai is at risk if the pr…

Risk is that a tether run causes all of crypto to collapse, not just USDT. How many actual dollars are in the system? Everything real has been exfiltrated through electricity bills, taxes and early adopters selling, the entire crypto economy is a hollow shell, leveraged on retail deposits.

I always love looking at “market cap” for these things. As if every coin there could actually be sold for the price listed making it worth hypothetical billions.

Even a small cash out will cut the value to pieces.

Re: Report on Stablecoins [pdf]

#182

Post by spir » Mon, Nov 01, 2021, 9:55 PM UTC

okareaman wrote: post #64

Historically, we've had major bubbles and crashes in all kinds of financial markets, from stocks and bonds, to property and dotcom stocks. Is there any reason to believe that cryptocurrency is more stable and we won't have a catastrophic crash?

Crypto "expert" here. We will have a catastrophic crash, it's normal and natural. But, the tech is here to stay and is 100x better than existing solutions. Crypto is changing the world, one crash at a time :)

Re: Report on Stablecoins [pdf]

#183

Post by webinvest » Mon, Nov 01, 2021, 9:55 PM UTC

sub7 wrote: post #143

From a Coinbase exec: "Tether is a ticking time bomb. Whenever it goes off, it'll be a 70-80% market correction for 2-3 years" Crypto continues to help nobody and achieve nothing in the real world. This administration has been criminally slow in shutting it down, lobby is strong.

No there won’t be a big long term correction from Tether because there are dozens of other stable coins now for people to temporarily sell into. There’s also the ability to short crypto and buy puts on crypto. All of that provides ways for speculators, investors, middle class savers, and early technology adopters to stay in the game.

You’re like a doomsday predictor that will never see a doomsday happen.

No real value? The AAVE crypto platform alone already holds more value ($23B) than the entire market cap of Ecuador’s stock market ($11B). The AAVE platform is literally more valuable than a country.

AAVE is just one of many applications built on the Ethereum network. It speaks nothing of Uniswap, Maker, Yearn, Balancer, USDC, Compound, and many others.

Bitcoin alone secures over 1 Trillion dollars.

Re: Report on Stablecoins [pdf]

#184

Post by spir » Mon, Nov 01, 2021, 9:56 PM UTC

felixbraun wrote: post #20

Interesting to see Mastercard, Square, Stripe, FIS, Fiserv and Visa all mentioned in "Market Participants". None of those actively today use/settle stablecoins publicly?

Visa uses Ethereum mainnet today (for about 6 months or more?) to settle obligations between a small subset of their merchants whose businesses are in crypto.

Re: Report on Stablecoins [pdf]

#185

Post by mattnewton » Mon, Nov 01, 2021, 9:57 PM UTC

wpietri wrote: post #111

dustingetz wrote: post #80

Earlier quoted context omitted.

Risk is that a tether run causes all of crypto to collapse, not just USDT. How many actual dollars are in the system? Everything real has been exfiltrated through electricity bills, taxes and early adopters selling, the entire crypto economy is a hollow shell, leveraged on retail deposits.

Exactly. Ultimately cryptocurrencies are a negative-sum game in that they take in real money and just move that money around, while spending some on overhead. In contrast, imagine investing in, say, a new fast-food franchise joint. They money you put in there is used to acquire assets that are used to produce goods that people will pay to consume. If it's a well-run business, the value of the outputs will be more tha…

I'm a crypto bear myself, but I'm not sure I agree with this argument. Plenty of services are built around "just moving money around" - accounting in this way has a ton of real value or else stripe, visa, paypal etc wouldn't be the huge companies they are. The questions are, whether "investing" by buying and holding is the right way to capture the value that this produces, and whether the benefits of doing it on a distributed blockchain outweigh the costs.

Re: Report on Stablecoins [pdf]

#186

Post by rabbitonrails » Mon, Nov 01, 2021, 9:57 PM UTC

bradly wrote: post #57

Animats wrote: post #47

This is good. The backing of stablecoins is a very real issue. As the Treasury points out, there's a very real possibility of a run. Two stablecoins have crashed so far, SafeDollar SDO, and $TITAN. They went all the way to zero. Can Tether survive a net outflow? Probably not. They don't have the collateral. Dai is really a derivative of Etherium. Dai is backed by Etherium at 150%. So value in Dai is at risk if the pr…

Is Dai similar to Gemini's GUSD stable coin? It too is backed by Etherium. I think Gemini is paying 8 or 9% APR for holding. Where is that money coming from? Are they loaning out for a higher rate than that?

If you are referring to Gemini Earn, they take your GUSD (or other currency) and take a spread then lend it to Genesis, who takes a spread and then lends it to big institutions. None of this is insured.

https://support.gemini.com/hc/en-us/articles/360056367771-Ar...

Re: Report on Stablecoins [pdf]

#187

Post by TigeriusKirk » Mon, Nov 01, 2021, 9:58 PM UTC

nostrademons wrote: post #177

alonsonic wrote: post #150

Earlier quoted context omitted.

The audience of hackernews has grown and old users are trying to maintain the culture of the site. The value of this site comes from its community. Let's not turn it into reddit. I personally welcome this type of policing.

There's a certain irony in creation dates here: mmaunder: 2007. satellite2: 11 months ago. dexwiz: 2015. alonsonic: 2016. burnished: 8 months ago. nostrademons: 2007. Anyway, I don't think such tone-policing is all that off-culture for HN, nor do I mind it all that much. PG explicitly said back around 2008 that posts which keep the discourse civil and intellectually honest are welcome even if they don't directly add…

Some of us change account names as a matter of internet hygiene. I think I've had 6 or 7 here over the years, and even this old one was dormant for most of its life. Anyway, the point is you never know just based on account age.

Re: Report on Stablecoins [pdf]

#188

Post by TomSwirly » Mon, Nov 01, 2021, 9:58 PM UTC

jafo wrote: post #175

wpietri wrote: post #111

Earlier quoted context omitted.

Exactly. Ultimately cryptocurrencies are a negative-sum game in that they take in real money and just move that money around, while spending some on overhead. In contrast, imagine investing in, say, a new fast-food franchise joint. They money you put in there is used to acquire assets that are used to produce goods that people will pay to consume. If it's a well-run business, the value of the outputs will be more tha…

> They money you put in there is used to acquire assets that are used to produce goods that people will pay to consume Is a decentralized, public ledger not a good people will pay (via cryptocurrency) to consume?

For what specific purpose?

Re: Report on Stablecoins [pdf]

#189

Post by swader999 » Mon, Nov 01, 2021, 9:59 PM UTC

sharperguy wrote: post #152

dexwiz wrote: post #49

All these coins are proven to be worthless. When speculation is making everyone money, the money isn't worth much. Edit: Love the immediate fear downvote. No one wants to hear their gold is really just shiny dirt.

I think it would be helpful here to compare the theory of a ponzi scheme to that of bitcoin. In the beginning, buyers buy into a ponzi scheme because of a story that the creators are telling about their scheme. As time goes on, people buy in because the early investors are making a ton of money, as the value of the asset begins to skyrocket. Later on, people buy in because of previous hype, even though returns are ac…

A ponsi scheme is fundamentally different than a market.

With a market one day you trade five USD for one BTC. The next the best offer your able to get from anyone might be two USD for one BTC. That's just the nature of any market for anything. Value for anything depends on who comes to the market and their bias.

A ponsi scheme is nefarious and more of a shell game. When the asset is gone, it's really gone and not coming back. There eventually aren't units to redeem because the originator took the aasset.

If BTC or crypto were a ponsi the analogy would be satoshi hacking your wallet and draining your funds.

In traditional crypto there aren't returns, there's just potential for it's perceived value relative to a base like the USD to change.

Re: Report on Stablecoins [pdf]

#190

Post by aetherspawn » Mon, Nov 01, 2021, 10:01 PM UTC

> Conversely, mass adoption of a well-regulated and supervised stablecoin with strong AML/CFT protections built into the stablecoin could provide greater transparency into illicit financial activity and could mitigate ML/TF risks, especially if the stablecoin takes market share away from riskier alternatives.

Interesting.

The blockchain is public, so they see benefit in being able to audit it.