Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Report on Stablecoins [pdf]

home.treasury.gov

Post reply on HN
Print view View original

371–380 of 697 posts

Re: Report on Stablecoins [pdf]

#371

Post by dcolkitt »

kirse wrote: post #357
arcticbull wrote: post #290

Earlier quoted context omitted.

> Can Tether survive a net outflow? Probably not. They don't have the collateral. Luckily for Paolo & friends, their terms of service clearly state that they do not ever have to offer redemptions of USDT for dollars. Or even whatever IOUs and bits of string they may or may not have in reserve. Out of all the stable coins its the most likely to withstand a "run" because they do not have to pay you if you ask. In fact…

After that hedge fund issued a $1M reward on Tether backing I did some more investigation and the thing I realized is that 1) Tether is inherently backed by BS and 2) crafting any sort of Tether short is near impossible because everyone in the game - Tether, the exchanges, etc. - will all be against you if you're winning in the short. There's that scene in "The Big Short" where Mark Baum and crew know the subprime bo…

You can easily short Tether on DeFi platforms that can’t be locked down.

Re: Report on Stablecoins [pdf]

#372

Post by FabHK »

swader999 wrote: post #213
adamc wrote: post #203

Earlier quoted context omitted.

In the case of the USD, the existence of a powerful government with a variety of powers (including coercive ones). Nothing is guaranteed in life, but it is orders of magnitude different from a digital currency offered by private individuals.

Sure and I agree the USD at the moment has an incredible backing. Also it being the reserve currency and base for most other currencies and commodities is no small thing. You could argue that BTC is backed by one of the most powerful networks of computing power on the planet. I don't think that's better than what the USD has, but it isn't 'Nothing'. The fact it can't be debased as easily as fiat currencies is not a t…

> BTC is backed by one of the most powerful networks of computing power on the planet

And that huge computing power is employed to basically solve Sudokus whose difficulty is adjusted to burn as much energy as is put into it (which unscrupulous people will do as long as that energy is still cheaper than the mining rewards).

Re: Report on Stablecoins [pdf]

#373

Post by drdeca »

TomSwirly wrote: post #188
jafo wrote: post #175

Earlier quoted context omitted.

> 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?

There were timestamping services which people paid for before bitcoin.

So, there is some price people will pay in order to be able to demonstrate in the future that some data existed at or before a given time.

A decentralized ledger also provides this purpose.

Of course, at current transaction fees on most blockchains, it would be wasting quite a bit of money to make a transaction just to timestamp a single thing.

This is why there are services (one of which, iirc, has gotten a, uh, endowment(?) in order to provide the service for free?) which collect large quantities of (hashes of) data that people want to establish existed before a given time, and produce a Merkle tree of all of that, so that all those people can demonstrate that their data existed before a given time.

So, that's one useful service.

Is it enough to justify all the stuff that goes into blockchain stuff? That's a different question.

But, if the question is "Do they have any genuine use?", the answer is "yes." .

Re: Report on Stablecoins [pdf]

#374

Post by arcticbull »

sumedh wrote: post #322
BoiledCabbage wrote: post #192

Earlier quoted context omitted.

visa, paypal... all provide value in allowing commercial transitions. Exchange of goods and services, digitally or on credit. The value it is providing is eliminating the inefficiency of barter (which cash also does), and allowing remote digital transactions, again good for societal benefit. There is no societal benefit to buying, holding, selling a crypto currency. The thing that could provide societal value is smar…

> There is no societal benefit to buying, holding, selling a crypto currency. If you live a country where the govt mismanages the economy and drop the value of the nation's currency then in that case BTC has a lot of value.

In most of those countries the transaction fee is a non-trivial percentage of the GDP. Using it as a currency there would be economic suicide. And the volatility would be crushing to the poor.

They'd be infinitely better off with like USDC or better yet, a USD issued CBDC.

Re: Report on Stablecoins [pdf]

#375

Post by arcticbull »

FabHK wrote: post #367
arcticbull wrote: post #223

Earlier quoted context omitted.

It's a strictly worse monetary system by any measure. It's massively more expensive to transact, it's unbelievably inefficient - requiring as much power as Thailand and generating as much e-waste as the Netherlands to scribble 2-3 tx/sec into a ledger. That's 60 days of power for the average US household and 1 iPad of e-waste per transaction . [1] [edit](97% of all mining hardware will be thrown away without ever win…

Given the capacity of the BTC blockchain, if everyone one earth finally adopted BTC (as some people dream about), everyone could get in about one transaction in their lifetime. (3 tx/sec = 3 tx/sec * 31m sec/a = 100m tx/a = 10bn tx/100a, so the network supports 10 bn transactions in about 100 years, and there are about 10bn people on earth, each living around 100 years.)

This is also one of the reasons Lightning is not a viable scaling solution. If you don't get your LN channel open soon, you'll be waiting until the year 2120. This will also of course consume 100% of the remaining block reward and almost a trillion dollars in electricity.

That, and the quadratic routing complexity.

Re: Report on Stablecoins [pdf]

#377

Post by seoaeu »

epinephrinios wrote: post #360
mailbag wrote: post #85

Earlier quoted context omitted.

Arguably, we've already seen multiple catastrophic crashes in cryptocurrencies.

And the market rebounded without a government bailout.

Which is pretty clear evidence that those crashes weren't "catastrophic". That doesn't provide any proof that a future crash won't be substantially worse

Re: Report on Stablecoins [pdf]

#378

Post by from »

The party will come to an end soon. There are people at Treasury (FINCEN and OFAC) who find the idea of people being able to transact even thousands of dollars without them knowing about it repulsive. Having coins tied to dollars is begging for regulatory action.

Re: Report on Stablecoins [pdf]

#379

Post by arcticbull »

drdeca wrote: post #373
TomSwirly wrote: post #188

Earlier quoted context omitted.

For what specific purpose?

There were timestamping services which people paid for before bitcoin. So, there is some price people will pay in order to be able to demonstrate in the future that some data existed at or before a given time. A decentralized ledger also provides this purpose. Of course, at current transaction fees on most blockchains, it would be wasting quite a bit of money to make a transaction just to timestamp a single thing. Th…

The blockchain is a pretty terrible timestamping service as the block time varies based on the current hash rate and difficulty. From as little as 5.5 minutes to as much as 15 minutes. [1] It's at best a coal-powered monotonic counter. Given the massive variability you have to correlate it with an actual clock you trust lol, and if you trust the clock you may as well just use that.

[1] https://bitinfocharts.com/comparison/bitcoin-confirmationtim...

Re: Report on Stablecoins [pdf]

#380

Post by arcticbull »

usehackernews wrote: post #358
arcticbull wrote: post #293

Earlier quoted context omitted.

> 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…

My friend's family lives in Bosnia. He lives in the United States. He supports his family with his income, and frequently sends money from the United States to Bosnia. Best case scenario, using Paypal (Xoom), a centralized company, this takes him two days. Two days is the best case scenario! With Bitcoin it is almost instant. They switched to cryptocurrency after a near disastrous situation with the length of time th…

His best case scenario is opening a Wise multi-currency account, with supporting instant transfers free of charge in many cases.

Bitcoin is not accepted anywhere, practically speaking.

As such you're only looking at a small fraction of the transaction. You actually need to (1) transfer money into a crypto exchange for a 1-2% fee and whatever delay the domestic transfer takes (2) purchase Bitcoin for whatever fee the exchange charges (3) transfer it for $0.50-50 depending on the fee du jour (4) hope the market doesn't collapse out from under you while all this is happening (5) sell it at the destination unregulated exchange for whatever fee they charge and hope they don't flee with your money (6) transfer to the destination bank account, waiting as long as a domestic transfer takes.

This is probably a few days total, with severe counter-party risk, forex risk, and substantial transaction fees.

Or you can use Wise for a very low fee directly bank-to-bank, or open a Wise multi-currency account and support almost-free instant transactions. They're also super, duper regulated by a number of world regulators.

I know which I'd do, but to each their own.

Post reply on HN