Report on Stablecoins [pdf] • Hacker News Board

Re: Report on Stablecoins [pdf]

#681

Post by jimmydorry » Thu, Nov 04, 2021, 3:10 AM UTC

tome wrote: post #623

jimmydorry wrote: post #597

Earlier quoted context omitted.

I think two of the coming applications that has me most excited (of which there are many others on the horizon), are permission-less stock markets where shares are fully accounted for at all times in real-time (an actually transparent financial market), and proper third party markets for digital goods whereby goods bought online can essentially be treated like you do physical goods. Both are applications of NFTs and…

> permission-less stock markets where shares are fully accounted for at all times in real-time We can already achieve this without blockchain technology! Indeed that's not the way the system works, but that's not due to technological limitation. What makes you think that once "permissionless stock markets" are available on the blockchain then secondary derivative markets won't spring up, making the ownership situatio…

Transparency is always a sliding scale, and right now there is very little transparancy with regards to who owns what stock and how much of it. The system is currently more paper based than digitally reconcilled. And the onus is on every financial firm (bank, hedge fund, brokerage, settlement house, etc.) to maintain their own books and report back as best they feel inclined to. What they volunatarily report back can be ammended, or late. And when you add up all the human induced delays / data entry mistakes, what the public has available to look at can be months out of date or just plain wrong.

In principal, yes, the trusted parties could have stepped up and implemented a more transparant and automated system. No, they did not need to base such a solution on a blockchain. But the reality is that they were not inclined to change the status-quo, and now we find ourselves in a world where every relevant financial system is looking at, testing, or in the process of rolling out a blockchain based solution.

For anyone asking where the value in the technology lies, the proof is in how seriously the large players [1] are taking it.

[1] just one of the many public facing examples of a blockchain-based stock market (under the CHESS replacement program): https://www2.asx.com.au/markets/clearing-and-settlement-serv...

Re: Report on Stablecoins [pdf]

#682

Post by midev » Thu, Nov 04, 2021, 3:18 AM UTC

epinephrinios wrote: post #663

midev wrote: post #463

Earlier quoted context omitted.

> I can protect my own money, thank you. I do not need a nanny I love when people out themselves as having never worked on anything significant. Yeah, sure, for your pocket change, I'm sure you can reasonably protect it. For any significant transaction, I want the ability to reclaim my money if the other side turns out to be fraudulent.

> people out themselves as having never worked on anything significant I really don't understand how you jumped to this condescending conclusion. > the other side turns out to be fraudulent Crypto is not here to protect you from falling victim to fraud. It is here to replace a faulty and completely outdated financial infrastructure. The same laws against criminals apply whether they use crypto or not.

> I really don't understand how you jumped to this condescending conclusion.

If you believe that financial regulations are the "nanny", you probably only have a child-like understanding of things. In that case, condescension is warranted. It means you don't have the experience needed to comment seriously on the topic.

> It is here to replace a faulty and completely outdated financial infrastructure

Yet it performs worse in every measurable metric. How many transactions per second can Bitcoin sustain? Four, lmao.

> The same laws against criminals apply whether they use crypto or not.

One does not need to be a criminal for proper regulations to apply. Again, this is the immaturity of people commenting.

Re: Report on Stablecoins [pdf]

#683

Post by seoaeu » Thu, Nov 04, 2021, 3:40 AM UTC

Acrobatic_Road wrote: post #673

seoaeu wrote: post #638

Earlier quoted context omitted.

Yes, cryptocurrencies are good if you want to finance illegal activity. However, since the vast majority of people are unable or unwilling to become international fugitives like Snowden, cryptocurrencies aren't especially useful as a way to post freely on twitter while retain your money against seizure by a hypothetical dystopian government.

You're assuming that financial censorship primarily targets illegal activity - it doesn't. The vast majority of financial censorship targets legal activity and persons, businesses and corporations who have not been charged by any government with any crime. And it's done by corporations pursuing political interests.

That's a long way from the claim that started this chain:

> in a slightly more dystopian reality -e.g. when we are forced to use CBDCs- the government might choose to block you from using your hard earned money because you posted a criticism of the president on twitter.

Re: Report on Stablecoins [pdf]

#684

Post by seanhunter » Thu, Nov 04, 2021, 1:34 PM UTC

tata71 wrote: post #635

seanhunter wrote: post #506

Earlier quoted context omitted.

> The really smart money with large crypto stashes could borrow USDT with crypto as collateral, and trade the USDT for greenbacks. Have you looked into the mechanics of this trade? The crypto loans I'm aware of are all significantly overcollateralized. You would have to pledge say 1m BTC to get 0.8m BTC worth of USDT which you could then sell for dollars. If you succeeded USDT tanks, everyone who holds USDT would be…

> These markets are nowhere near as flexible and liquid as regular fx Love to hear this.

Some facts to back this up.

1)In normal FX markets the amount transacted goes to trillions of USD per day, and liquidity at the touch is very high. So if you need to unwind a position there will be people who will take the other side and the market won't move much even if you're trying to unload a lot of a single cross.

2)In equity markets (which I'm a little more familiar with from a microstructure point of view) a single large market participant like a big broker/dealer will do more than a billion client orders on a busy day (when you add up the orders they do internally and all the child orders from executing trades in pieces). If you wanted to do a billion transactions on the ethereum blockchain at the current throughput it would take you almost 2 years, and no-one else would be able to do anything. So making a lot of trades fast isn't really possible.

Obviously chains like solana would help this a lot, but the point remains that in the current defi ecosystem markets aren't very resilient because they can't react as fast and they don't have the kind of depth of liquidity that conventional markets have.

Re: Report on Stablecoins [pdf]

#685

Post by epinephrinios » Thu, Nov 04, 2021, 2:19 PM UTC

arcticbull wrote: post #385

epinephrinios wrote: post #351

Earlier quoted context omitted.

In my book, there's some value in protecting the average Joe from the incessant dollar printing that decreases the value of the dollars in their saving accounts. That's just one argument for Bitcoin, there are more. For example, it provides the opportunity to second/third world countries to break free from the IMF debt slavery.

> In my book, there's some value in protecting the average Joe from the incessant dollar printing that decreases the value of the dollars in their saving accounts. This is a complete misunderstanding of the role of currency in a modern economy and the mandate of the federal reserve, which is to maintain a low, predictable rate of inflation to incentivize investment and maximize employment. Literally any asset will "s…

> Literally any asset will "save you" from the "relentless printing." That's an oversimplification. Let's just say that Bitcoin and Ethereum are now the apex assets.

Re: Report on Stablecoins [pdf]

#686

Post by [deleted] » Thu, Nov 04, 2021, 2:26 PM UTC

midev wrote: post #682

epinephrinios wrote: post #663

Earlier quoted context omitted.

> people out themselves as having never worked on anything significant I really don't understand how you jumped to this condescending conclusion. > the other side turns out to be fraudulent Crypto is not here to protect you from falling victim to fraud. It is here to replace a faulty and completely outdated financial infrastructure. The same laws against criminals apply whether they use crypto or not.

> I really don't understand how you jumped to this condescending conclusion. If you believe that financial regulations are the "nanny", you probably only have a child-like understanding of things. In that case, condescension is warranted. It means you don't have the experience needed to comment seriously on the topic. > It is here to replace a faulty and completely outdated financial infrastructure Yet it performs wo…

[deleted]

Re: Report on Stablecoins [pdf]

#687

Post by epinephrinios » Thu, Nov 04, 2021, 2:28 PM UTC

midev wrote: post #682

epinephrinios wrote: post #663

Earlier quoted context omitted.

> people out themselves as having never worked on anything significant I really don't understand how you jumped to this condescending conclusion. > the other side turns out to be fraudulent Crypto is not here to protect you from falling victim to fraud. It is here to replace a faulty and completely outdated financial infrastructure. The same laws against criminals apply whether they use crypto or not.

> I really don't understand how you jumped to this condescending conclusion. If you believe that financial regulations are the "nanny", you probably only have a child-like understanding of things. In that case, condescension is warranted. It means you don't have the experience needed to comment seriously on the topic. > It is here to replace a faulty and completely outdated financial infrastructure Yet it performs wo…

> If you believe that financial regulations are the "nanny", you probably only have a child-like understanding of things

Have you heard of the term "accredited investor"? That's 100% a "nanny" regulation that excludes poorer people from opportunities.

> Yet it performs worse in every measurable metric.

You jump to arbitrary conclusions. You probably did the same when it comes to Bitcoin that's why you say factually wrong things like in the comment. For example, do you understand what near-instant settlement means?

> One does not need to be a criminal for proper regulations to apply.

Ad hominem while stating the obvious. Yikes.

Re: Report on Stablecoins [pdf]

#688

Post by momo_O » Thu, Nov 04, 2021, 4:33 PM UTC

shkkmo wrote: post #458

jkhdigital wrote: post #391

Earlier quoted context omitted.

> Since you asked, yes. I do. To me, it's like asking if a beehive will always have a queen. It's in our DNA. Not the asker, but thank you for answering this--it goes a long way toward understanding where your arguments are coming from.

Places without a functional government have a history of doing pretty poorly. I think the burden of proof that there is a possible future without government lies on those making that claim. That burden has definitely not been met and the thus the feverent belied in that claim by cryptocurrency bulls is not rational.

Couldn’t it similarly have been said some hundreds of years ago that, places without a functional monarchy have a history or doing poorly?

It would be accurate, for the time, but hugely short sighted.

Re: Report on Stablecoins [pdf]

#689

Post by AnthonyMouse » Fri, Nov 05, 2021, 1:22 AM UTC

graeme wrote: post #574

AnthonyMouse wrote: post #345

Earlier quoted context omitted.

> 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 li…

You’re shifting the argument, which was about financial institutions in functional markets.

The argument is that cryptocurrency is useless under the assumption that the traditional financial market is functioning perfectly, i.e. that there is no regulatory inefficiency at all. There currently exist countries where this is not the case, so that assumption is incorrect and cryptocurrency is useful until such time as that is no longer the case.

Re: Report on Stablecoins [pdf]

#690

Post by challenger-derp » Fri, Nov 05, 2021, 7:06 AM UTC

22c wrote: post #654

challenger-derp wrote: post #646

Earlier quoted context omitted.

Halving risks & information assymetry risks are pretty solid arguments for future headwinds faced by btc miners. Investopedia states that by August 2021, only 2.3M BTC out of the 21M cap remain to be mined ( https://www.investopedia.com/tech/what-happens-bitcoin-after... ). However, what is preventing a fork of bitcoin from addressing this?

You can fork BTC to do whatever you want, but it doesn't come with liquidity. In other words, a fork doesn't come with the same amount of inertia.

Suppose BTC is met with a severe logjam as predicted by the author, won't a solution that does not involve mass liquidation (for e.g. a fork) be in demand and eagerly welcomed by existing BTC users?