921–930 of 976 posts
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Validators vote on the current exchange rate. https://docs.terra.money/docs/develop/module-specifications/...
Ah, that makes more sense. Thanks for the link, all this stuff is so interesting from a thought experiment point of view.
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This is an amazing explanation. Thank you!
That explanation is not correct. Algorithmic stablecoins rely on a pairing with another crypto, in UST’s case LUNA. 1 UST can always be swapped to $1 US dollar of LUNA. It is interchangable, so $1 US dollar’s worth of LUNA can also be swapped for 1 UST. Hence, the “algorithmic” in the name. This way traders are always incentivized to keep the price of UST at $1. There is no collateral requirement. In UST/LUNA’s case…
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The rate of coin generation matters. Imagine a world of 100 people and 100 dollars. If the population doubles, and the 100 dollars remains fixed, the value of the dollar has increased. If more dollars are not printed to maintain some inflation, people will slow spending hoping for 300 people the next year. Now, in the case of BTC, it’s not global population that matters, but the population of interested users, which…
Why would people slow spending due to a fixed money supply? The money they have now could potentially buy more in the future, but at some point you have to actually buy the thing you need or want. Conversely in in an inflating currency scenario yes I might spend the money sooner than I would otherwise, but then in the future I won't be able to spend it again, why is it so much better that I buy today instead of tomor…
This might be true for food, but a lot of our economy is based on investments and things we don't strictly need. Why would I give money to a startup if I can simply leave it on my bank account and have a guaranteed return?
> Conversely in in an inflating currency scenario yes I might spend the money sooner than I would otherwise, but then in the future I won't be able to spend it again, why is it so much better that I buy today instead of tomorrow?
Because it keeps the money in circulation. You might spend the money, but that money then gets to a business. This business also doesn't want money lying around, so they might, for example, build something. Which gives the money to a building company. Which then gives the money back to the worker. That's a lot of movement and value creation. Also, you really want to spend or invest the money sooner, since you won't get as much for your money if you buy something tomorrow instead. With deflation, this whole reasoning is reversed - why would you spend any more money than necessary, if you can buy much more with it tomorrow? You wouldn't and this kills the economy.
“Will Tether collapse by the end of 2022?”: https://www.metaculus.com/questions/9121/tether-to-collapse-... Community Prediction: 33% My Prediction: 50%
Would you be willing to make a bet (with money) based on those odds?
I’ll take 1:3 however. I get $30 if that question resolves positive. You get $10 if it resolves negative.
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Validators vote on the current exchange rate. https://docs.terra.money/docs/develop/module-specifications/...
Do I understand this correctly: there's no inherent incentive to put the "correct" price, they just need to agree with each other. Essentially playing "Guess 2/3 of the average" but it's just "Guess the average".
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I’m in, too. $10k 1:1 payout. I think Tether won’t collapse by the end of 2022. Happy to tie up the USD in escrow too.
I’d take 1:3 against that for $10. Replied above too.
Terms:
- Tether loses it's peg => USDT/USD pair is at 0.8 or less for a 7-day continuous period on https://coinmarketcap.com/currencies/tether/ or https://www.binance.com/en/price/tether
- You get thirty dollars if this happens by 00:01 Jan 1 2023
- He gets ten dollars if this has not happened by 00:01 Jan 1 2023
If you accept, edit your profile to include contact details and then say so here.
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Yep, this fractional reserve scheme they're running sounds shady. Almost like what banks are doing when they create book money out of nothing. Which is of course perfectly legal if you're rich enough to set up a private bank but the difference is they're doing it on a public ledger where everyone can see exactly how much emission there is, while bank books aren't public. Doing it in the open clearly goes too far, the…
That’s actually a bit of a misunderstanding of how banks work. “Fractional reserve” isn’t really actually a thing in the real world (just a textbook model). The confusion stems from a rule in the US, where banks were required to have a particular type of asset (central bank reserves) in an amount equaling at least 10% of deposits. People misunderstood this to mean that banks only have 10% of deposits backed with any…
Now as for credit it is not fully backed and they do create money out of nothing, any econ 101 course teaches you that. That is actually how most new money is created, though bank credits. The "money" is book money which is not legal tender, which means yes, they literally just make an entry into their books (today digital), same as Tether minting money out of thin air.
The most fatal aspect is that many people do not understand the complicated legal situation when giving money to banks. They imagine it like their money is sitting in a virtual safe just for them and the bank can't touch it. In reality once it enters the banks books you have lost custody of the actual asset (government money), which is why insurance is needed in case the bank goes under. In the EU for example all savings are insured up to 100k€.
>What Tether is doing, of course, is different, because they seem to create money out of nothing without having the assets to cover them
This is what banks do, you simply do not understand.
>"Sight deposits are an example of book money: sight deposits are created when a bank settles transactions with a customer, ie it grants a credit, say, or purchases an asset and credits the corresponding amount to the customer's bank account in return. This means that banks can create book money just by making an accounting entry: according to the Bundesbank's economists, ""this refutes a popular misconception that banks act simply as intermediaries at the time of lending – ie that banks can only grant credit using funds placed with them previously as deposits by other customers"". By the same token, excess central bank reserves are not a necessary precondition for a bank to grant credit (and thus create money)."
https://www.bundesbank.de/en/tasks/topics/how-money-is-creat...
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Perfect play, by definition, evens out. If everyone plays perfectly, then the ev should be zero (modified by position around the table). So it should balance to zero if everyone plays an equal number of hands from every position. The payoff would be adjusted by the rake.
But that is a wildly inaccurate assumption for any real table. I still wouldn't call it perfect play because as soon as someone adopts a fixed strategy, the meta game shifts and it is no longer optimal. If anything, the assumption is equal play, not perfect play
My point is that if the casinos have to post odds, the only odds on a poker table are flat (any deviations from 0 coming from skill differences) minus any rake (with maybe some slight variation if the button doesn't go down an even number of times).
The fact that we cannot define perfect play is irrelevant.
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Argentina has a pretty strong black market of USD, capital controls there didn't stop people from hoarding dollars as a stable currency.
But the black market has black market exchange rates. You can probably get something a little more reasonable on the open crypto market.
If you want to buy crypto using rubles, Lebanese pounds, Venezuelan bolivars or anything else, you need a counterparty who will accept that currency as payment. And if your currency is losing a lot of its value every day, with no end in sight, your counterparty will not give you anything approximating the official exchange rate, even on an open market, because accepting payment in that currency immediately exposes them to that currency's inflation.