Coinbase is launching support for the USDC stablecoin • Hacker News Board

Re: Coinbase is launching support for the USDC stablecoin

#101

Post by sjg007 » Tue, Oct 23, 2018, 5:29 PM UTC

VMG wrote: post #47

Permit wrote: post #11

Stablecoins seem like they would achieve most of the goals of the original cryptocurrencies such as Bitcoin: - Decentralized transactions - 24/7 access - Low fees - Store of value I suppose the only drawback here is that they're issued from a centralized authority. That said, for practical purposes the vast majority of Bitcoin holders didn't mine their own coins either. Despite this, no one on Twitter[1] seemed excit…

The tokens only have value as long as your tokens are redeemable. Multiple things can make them non-redeemable: * Your tokens can be tainted, for instance because they were once owned by a blacklisted address. The value of your tokens will be effectively 0. * The issuer might run a fractional reserve (this is the accusation against Tether, the most popular stablecoin at the moment) * The asset backing the stablecoin…

I would imagine that the secret service would take ownership of the coins and then reissue them thus resolving their criminality.

Re: Coinbase is launching support for the USDC stablecoin

#102

Post by beaner » Tue, Oct 23, 2018, 5:29 PM UTC

arcticbull wrote: post #39

beaner wrote: post #33

Earlier quoted context omitted.

Except you can't send between the two. Isn't that so silly? You can send USDC to/from any wallet that implements it. This is a benefit of the blockchain, a protocol for money.

Only if both wallets implement it, isn’t it silly not all wallets support all stable coins? Nope, it isn’t. Moreover there seems to be a misunderstanding, square cash allows you to instantly move money between bank accounts, via your bank, have at it, totally interoperable because dollars.

If I want to send money to someone via square cash, they have to have the square cash app.

Same with Venmo, and PayPal, and everything else...

Venmo and PayPal are even owned by the same company. Have you ever asked why they're not interoperable?

The ACH system underneath links all US bank accounts, but it's so slow and burdensome that private companies need to build apps on top of it that abstract away all of its problems.

None of them work together because regulation makes the operation of money so difficult that you need an entire company to run such an app, and they're all walled gardens applying their own versions of KYC/AML.

When you have a unified protocol, all of that melts away and the opportunity for money to have a higher velocity and greater ease of use is upon us.

This is what blockchain, and in this case USD Coin based on it, provide.

It seems silly to me that such a system would not become popular. Interoperability and protocols are good. They are something HN is typically in love with.

When google tried to remove basic support for one protocol for contacts from Gmail, people were up in arms because it broke interoperability.

Imagine being in that world with money. I don't know why you wouldn't want it. It's superior by all measures.

And it would be silly for anyone in that world to create a wallet that didn't support such currencies. It would be like creating an email client that only lets you read email from other users of the same service. That's not email, that's just a private messaging platform.

I think you have to look towards the future and see how, if adopted, things like this would make money easier to use. Rallying against that is silly indeed.

Re: Coinbase is launching support for the USDC stablecoin

#103

Post by JumpCrisscross » Tue, Oct 23, 2018, 5:30 PM UTC

benjaminjackman wrote: post #88

endijs wrote: post #7

I understand why stablecoin's are useful to the end user. I also understand how Bitfinex is cashing in on Tether. However how is Coinbase making money with USDC? They clearly will have considerable expenses (keeping reserve, legal team, development etc. etc.). But if I give them 1USD and get back 1USDC, which later can be exchanged back to 1 USD, where are they making money?

>But if I give them 1USD and get back 1USDC, which later can be exchanged back to 1 USD, where are they making money? Historically that's basically how banks have made money. Issuing bank notes while earning interest on the capital they hold. Typically they juice the rate via fractional reserve lending, ie they lend out more money than they have. However if they aren't able to do that, they still get to keep the inte…

> like pegging a coin to the S & P

So we invented a less efficient ETF which has the added bonus of keeping regulators and securities lawyers employed until the post-quantum world.

Re: Coinbase is launching support for the USDC stablecoin

#104

Post by graphememes » Tue, Oct 23, 2018, 5:31 PM UTC

VMG wrote: post #47

Permit wrote: post #11

Stablecoins seem like they would achieve most of the goals of the original cryptocurrencies such as Bitcoin: - Decentralized transactions - 24/7 access - Low fees - Store of value I suppose the only drawback here is that they're issued from a centralized authority. That said, for practical purposes the vast majority of Bitcoin holders didn't mine their own coins either. Despite this, no one on Twitter[1] seemed excit…

The tokens only have value as long as your tokens are redeemable. Multiple things can make them non-redeemable: * Your tokens can be tainted, for instance because they were once owned by a blacklisted address. The value of your tokens will be effectively 0. * The issuer might run a fractional reserve (this is the accusation against Tether, the most popular stablecoin at the moment) * The asset backing the stablecoin…

Basically this. It's a shame people don't understand crypto at all.

Re: Coinbase is launching support for the USDC stablecoin

#105

Post by lacker » Tue, Oct 23, 2018, 5:31 PM UTC

Permit wrote: post #11

Stablecoins seem like they would achieve most of the goals of the original cryptocurrencies such as Bitcoin: - Decentralized transactions - 24/7 access - Low fees - Store of value I suppose the only drawback here is that they're issued from a centralized authority. That said, for practical purposes the vast majority of Bitcoin holders didn't mine their own coins either. Despite this, no one on Twitter[1] seemed excit…

Another key drawback of USDC is that your account can be frozen by the centralized authority:

USDC tokens are ERC-20 compatible and can be used with any ERC-20 compatible digital wallet. However, a global blacklist is maintained by CENTRE for USDC, which prevents tokens from being sent into or from blacklisted addresses. Reasons for blacklisting could include known fraudulent or illegal activity, or a legal order or process. Reserves associated with USDC balances held on blacklisted addresses may be wholly and permanently unrecoverable.

https://support.usdc.circle.com/hc/en-us/articles/3600160603...

How bad this is is yet to be seen. Anyone who has experience with PayPal freezing their account knows that it can be very frustrating when a company freezes your accounts for some unknown reason and then does not communicate with you.

Re: Coinbase is launching support for the USDC stablecoin

#106

Post by beaner » Tue, Oct 23, 2018, 5:31 PM UTC

apo wrote: post #57

beaner wrote: post #45

Earlier quoted context omitted.

It can be traded directly. It's just an erc20 token.

I understand its an ERC20 token. Do you understand how Coinbase and Circle will remain within regulatory compliance (AML/KYC) regarding USDC and the obvious potential for money laundering?

Do you understand how ERC20 tokens work?

Coinbase might be able to pull it back, but that doesn't prevent me from sending it at-will in the first place.

Re: Coinbase is launching support for the USDC stablecoin

#107

Post by jessepollak » Tue, Oct 23, 2018, 5:31 PM UTC

Hi all — head of engineering for the consumer product at Coinbase here (iOS, Android, coinbase.com).

Happy to answer any questions that people have — also, just wanted to make a plug that we're hiring. If you're interested in building an open financial system for the world, shoot me a note at jpollak@coinbase.com. Especially interested in iOS & Android engineers!

Re: Coinbase is launching support for the USDC stablecoin

#108

Post by jf- » Tue, Oct 23, 2018, 5:32 PM UTC

jatsign wrote: post #99

jf- wrote: post #96

I have to wonder what these coins actually offer the consumer. If they’re to be used as a real world currency for transactions, they would need to have some utility over credit/debit cards. I don’t see what that utility is. I can already make instantaneous purchases via contactless, and while there is a fee for international purchases, it’s not large enough, nor do I encounter it frequently enough, for me to look for…

An ordinary consumer wouldn't. For me, likely use cases are: - Transmitting money overseas. This should be way cheaper. - Vendors who are tired of paying 2.5% to credit card companies giving a discount to using crypto.

That seems more like an argument for a cheap foreign exchange service, of which I believe there are several now.

Re: Coinbase is launching support for the USDC stablecoin

#109

Post by dwild » Tue, Oct 23, 2018, 5:32 PM UTC

JumpCrisscross wrote: post #48

Permit wrote: post #38

Earlier quoted context omitted.

Yes, but once I have acquired dollars and wish to send them to you I must involve a third party. Not involving that third party would be the sell here. I have no position in any cryptocurrency and am not trying to argue that USDC is better than USD. I'm just saying that stablecoins achieve most of the goals of a decentralized currency yet despite this they are not appealing to today's cryptocurrency community.

> once I have acquired dollars and wish to send them to you I must involve a third party Cash. (There is no way to send electronic dollars without involving a third party, though more money is laundered using dollars and euros than cryptocurrencies. I'd argue leaving a permanent, public record of transactions is a poor price to pay for decentralized electronic transmission, particularly given the centralized issuer a…

> There is no way to send electronic dollars without involving a third party

Yeah but that third party is everywhere, available to all (US isn't the only country in the world you know?) and isn't aware you are using his service for sharing cryptocurrencies or simply reading Hacker News.

The current third parties for transferring money, well they all fail one or multiple of theses while cryptocurrencies dosen't.

Re: Coinbase is launching support for the USDC stablecoin

#110

Post by lacker » Tue, Oct 23, 2018, 5:33 PM UTC

stilley2 wrote: post #94

alistproducer2 wrote: post #68

Earlier quoted context omitted.

This is wrong on several levels. Decentralization was not for transactions, it is for censorship resistance. These exchange stable coins fail this requirement. As anyone who has been licked out of an exchange account knows, your funds are never yours when they're on an exchange, much less if the only place to redeem those coins is a place that has locked you out. Your observations about the community is flawed. Many…

The article says USDC is an ERC20 coin, which means you can keep it in your own wallet (i.e., not the exchange). You are still trusting the centre consortium to maintain the coins value.

According to USDC's documentation, accounts can also be frozen by a centralized authority.

USDC tokens are ERC-20 compatible and can be used with any ERC-20 compatible digital wallet. However, a global blacklist is maintained by CENTRE for USDC, which prevents tokens from being sent into or from blacklisted addresses. Reasons for blacklisting could include known fraudulent or illegal activity, or a legal order or process. Reserves associated with USDC balances held on blacklisted addresses may be wholly and permanently unrecoverable.

https://support.usdc.circle.com/hc/en-us/articles/3600160603...