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Report on Stablecoins [pdf]

home.treasury.gov

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Re: Report on Stablecoins [pdf]

#341

Post by dragontamer »

octodog wrote: post #323
dragontamer wrote: post #244

Earlier quoted context omitted.

The stock market won't collapse in the same way because stocks have earnings and dividends (which is what the value is largely based upon). Sure: securities can go up, or down, in price almost arbitrarily. But they largely can't go below zero (aka: bankruptcy law protects against that), and they can't really go below the expected profits of the company (because shareholders are entitled to those profits. Worst-comes-…

Invidiual stocks collapse all the time. Selling down large positions is a real problem that institutional investors face and they plan for a haircut on the list price when doing so.

Sure, but the stock collapses are always correlated to income issues

Either expectations of future income, or present circumstances.

Re: Report on Stablecoins [pdf]

#342

Post by NikolaNovak »

nostrademons wrote: post #275
jonwinstanley wrote: post #197

Earlier quoted context omitted.

Can you explain how all gains are from other peoples losses? Someone invented a technology. Initially it was worth zero. Now it’s worth 1tn. The gains are from the gradual realisation that the technology has some merits. There are way more gains than losses… so far at least.

Other than the number in someone's bank account, what do you get from cryptocurrency? With technologies like washing machines and dishwashers and stoves, it's pretty easy to see the real gains in wealth: you save labor. Ditto cheap housing and automobiles: you can live places you wouldn't before, which opens up a yard and white picket fence to people who previously lived in tenements. The Internet opened up a whole n…

Thank you; your two posts have given me more of a practical understanding/faith in cryptocurrencies at large than any number of passionate posts over the years.

I guess it pays to think of Cryptocurrencies other than BitCoin (which is in 90% of headlines), and imagine what CAN be / what superior systems are and can be out there.

Re: Report on Stablecoins [pdf]

#343

Post by spir »

Igelau wrote: post #331
spir wrote: post #202

Earlier quoted context omitted.

I'm with you, where are the actual applications? I'd say this criticism was mostly fair up until about two years ago. Within the last two years, the actual applications have flourished. For example, have a look through this list https://defipulse.com/ If you remain skeptical, that's fair. The good news is, Ethereum is reaching adulthood this year by switching to proof of stake and launching the web of layer-2 network…

Let's have a look at the top five. > a decentralized credit platform > a decentralized exchange liquidity pool > an open source, decentralized, non-custodial liquidity protocol > a smart wallet with an intuitive interface built on top of popular DeFi projects > an algorithmic money market protocol This is a circular argument for the utility of dApps. There's nothing here for someone who isn't already interested in cr…

I think that's fair because right now, most or almost all crypto apps are circular.

Yet, I have found it useful to try and separate the fundamental innovations from the current set of assets being manipulated.

Here is a partial list of fundamental crypto innovations:

- non-custodial wallets in general to protect people from predatory institutions or governments

- smart contracts that always do what they say they'll do

- inherent global jurisdiction of blockchains, ie. borderless

- vastly reduced transaction costs to stand up and operate new, networked financial instruments and other kinds of digital asset systems (property registries, etc.)

The fact that these innovations are currently majority operated on dog money, Bitcoin, ETH, etc. is a temporary characteristic of this early stage of crypto's growth.

In the future, these same innovations will operate on everything in the economy.

For example, Tesla stock (backed by custodially-held physical shares, not synthetics) has been available on Solana for some time.

Re: Report on Stablecoins [pdf]

#344

Post by midev »

spir wrote: post #226
lvl100 wrote: post #217

Earlier quoted context omitted.

This is just pathetic.

There's a large subset of the talented people on HN that were wrong about crypto years ago-- they couldn't see that the casino and the innovation are, unfortunately, inseparable-- and many now cling to their original incorrect points of view, even as crypto is clearly changing the world like the internet did in the 90s and mobile in the 00s. I have been full-time in crypto for years. I could write you a 10,000-word e…

> that were wrong about crypto years ago

No, they were exactly right. In ten years, cryptocurrencies have produced nothing of value except speculation. This is like saying the Dutch that didn't sell their homes to buy into the tulip bulb craze were wrong. Sure, people have made huge gains, like all ponzi schemes generate. Most are bagholders, though.

> even as crypto is clearly changing the world like the internet did in the 90s and mobile in the 00s.

Crypto hasn't changed a single thing about the world. There is not a single popular thing backed by crypto. Every example you gave in this thread was either weak, like that DeFi Pulse link, or just straight not even using crypto, like Eco.

When you as an expert can't even identify a popular product using crypto at it's core, it doesn't speak very highly.

> I have been full-time in crypto for years. I could write you a 10,000-word essay on crypto's promising use cases. But, I believe that you, and many others on HN, don't want to hear it.

I am an actual cryptographer and would love to read world salad like that.

> That's too bad, because you guys grew up on sci-fi and rigor, and now you're ignoring that crypto is both rigorously successful and cypherpunk sci-fi come to life.

Stop. Libertarian dorks that don't understand the history of finance is hardly the sci-fi we want.

Re: Report on Stablecoins [pdf]

#345

Post by AnthonyMouse »

arcticbull wrote: post #293
RustyConsul wrote: post #279

Earlier quoted context omitted.

It seems our difference in opinion comes from our definition of value. I know people point to the current system and infrastructure of stock exchanges, SWIFT, the IMF, Central Banks, Retail and Commercial Banks, Internet Banks (Such as Stripe, Paypal, ETC.), Credit Unions, Savings and Loan Associations, Investment Banks and Companies, Brokerage Firms, Insurance Companies as working good enough. But for me... Occams r…

> Doesn't it seem weird that through this complex system of interactions, we can recreate all of that in Code? All of these systems are already software. > If there was no value in it, why did we create all those institutions in the first place? Centralization makes them massively more efficient than crypto. If there was a way to make them more efficient that did not involve throwing risk models out the window or reg…

> If there was a way to make them more efficient that did not involve throwing risk models out the window or regulatory arbitrage, someone could just do that in the traditional economy without crypto.

This is assuming there is no value in regulatory arbitrage, which is wrong.

The value of this is proportional to the dysfunction of the existing system in any given country. In countries that impose currency exchange limitations or other authoritarian policies enforced through the financial system, cryptocurrency has more value.

You could capture that value by reforming the laws and governments in those countries, but that hasn't happened.

And one of the benefits of cryptocurrencies is encouraging those reforms. If you can't use the financial system to impose authoritarian policies because people will just use cryptocurrency instead, you might as well not try to use the financial system to impose authoritarian policies, at which point people can use the more efficient ordinary banking system instead of cryptocurrencies. But we're not there yet, are we?

Re: Report on Stablecoins [pdf]

#346

Post by spir »

Igelau wrote: post #338
spir wrote: post #226

Earlier quoted context omitted.

There's a large subset of the talented people on HN that were wrong about crypto years ago-- they couldn't see that the casino and the innovation are, unfortunately, inseparable-- and many now cling to their original incorrect points of view, even as crypto is clearly changing the world like the internet did in the 90s and mobile in the 00s. I have been full-time in crypto for years. I could write you a 10,000-word e…

> I could write you a 10,000-word essay on crypto's promising use cases. But, I believe that you, and many others on HN, don't want to hear it. You're already backpedaling from something you haven't even said yet. That speaks volumes.

My remark was merely a rhetorical device :)

I am widely published inside the crypto industry on twitter and on a few podcasts over the years. For example, here is an episode on the many present & future uses of NFTs (episode requires a free Real Vision crypto account)

https://www.realvision.com/shows/the-interview-crypto/videos...

Re: Report on Stablecoins [pdf]

#347

Post by thehappypm »

stepanhruda wrote: post #302
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…

There is a very important aspect of opposite pressure. If DAI price ever loses peg and goes to eg 0.90 anyone with open positions immediately starts buying a shitton of them and closing their position, because they just got a 10% discount on paying off their debt, sending the peg back. If the price ever goes to 1.10, anyone with free capital around immediately starts minting new coins and floods the market with them,…

That’s true if there’s faith it comes back up from $.90.

If it starts falling to $.99 then $.98 then $.95 then $.90.. you have to decide if it’s really a dip or the end.

Re: Report on Stablecoins [pdf]

#348

Post by tremarley »

arcticbull wrote: post #293
RustyConsul wrote: post #279

Earlier quoted context omitted.

It seems our difference in opinion comes from our definition of value. I know people point to the current system and infrastructure of stock exchanges, SWIFT, the IMF, Central Banks, Retail and Commercial Banks, Internet Banks (Such as Stripe, Paypal, ETC.), Credit Unions, Savings and Loan Associations, Investment Banks and Companies, Brokerage Firms, Insurance Companies as working good enough. But for me... Occams r…

> Doesn't it seem weird that through this complex system of interactions, we can recreate all of that in Code? All of these systems are already software. > If there was no value in it, why did we create all those institutions in the first place? Centralization makes them massively more efficient than crypto. If there was a way to make them more efficient that did not involve throwing risk models out the window or reg…

The only people that have no issues with centralisation are the people who are benefiting from it.

World Bank estimates 31 percent of people globally do not have a bank account. Decentralisation helps these people.

When you deposit money into a bank account, it is not your money. It is the bank's money. You aren't allowed to use it, or spend it how you like without the permission of your bank. Crypto doesn't have this issue.

There are financial tools that only people with net worths of over $100 million have access to, such as market making, arbitrage, liquidations, insurance lending etc. Crypto solves this.

99.9% of banks in traditional finance run their systems on outdated, closed source, barely maintained and bug ridden software. Contracts, money and agreements than can happen in seconds in crypto, takes weeks and months in centralised finance.

If centralised finance had the potential to be more efficient, there should have been more innovation decades ago. Centralised finance needs to catch up.

Re: Report on Stablecoins [pdf]

#349

Post by Igelau »

sanderjd wrote: post #299
lvl100 wrote: post #249

Earlier quoted context omitted.

It’s pathetic because you’re just writing nonsense and can’t even describe anything practically productive about crypto. None. By the way, I could ALSO write you 10,000 word salad about how commonly found stones can solve the wrongs in modern finance. That doesn’t say anything about common stones. It just says modern finance is FLAWED.

You are not showing yourself to be a person that it is worthwhile for this person to waste time on. There are other people in this thread with your point of view but who are commenting in good faith, rather than in bad faith like you are.

Bad faith involves deliberately hiding some truth. It doesn't mean "thing you call someone when you can't win the argument".

And I suspect you know that, which means... ;)

Re: Report on Stablecoins [pdf]

#350

Post by spir »

inter_netuser wrote: post #288
spir wrote: post #184

Earlier quoted context omitted.

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.

wasn't this a pilot?

Yes, I think you're right, it was a pilot

https://www.forbes.com/sites/ninabambysheva/2021/03/29/visa-...

I'm not sure if that means the pilot was discontinued or what amounts of money were involved.

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