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

Re: Coinbase is launching support for the USDC stablecoin

#261

Post by antpls » Tue, Oct 23, 2018, 9:25 PM UTC

ThrustVectoring wrote: post #63

"Stablecoin" in general generates a ton of legal risk for the operators. If you can make peer-to-peer transactions with it, then the coin operators are definitely not complying with Know Your Customer and Anti-Money Laundering laws. This will pretty reliably get the US Feds to raid your offices, seize your website and servers, arrest the principles responsible, and prosecute them. See also: Liberty Reserve. On the ot…

> Maybe the programmability and verifiability helps?

USDC seems to be more about smart contracts than crypto currency as envisioned by the early adopters.

Programmability and verifiability alone of the "old money" could open new applications, new experimentations, new use cases. It's definitely a nice initiative IMHO. It looks like an intermediate step, or another variation, to get more people interested into digitalization.

Re: Coinbase is launching support for the USDC stablecoin

#262

Post by nstj » Tue, Oct 23, 2018, 9:27 PM UTC

asynchrony wrote: post #214

lacker wrote: post #105

Earlier quoted context omitted.

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…

I don't see how this won't result in rebuilding the current regulated banking system on top of an inefficient system bottlenecked by proof-of-work.

About as perfect an analysis of the current state of affairs as one could give.

Re: Coinbase is launching support for the USDC stablecoin

#263

Post by rlucas » Tue, Oct 23, 2018, 9:27 PM UTC

lacker wrote: post #118

fiatjaf wrote: post #60

Seriously, what is the point? Even if this is a perfectly honest and functioning system, if you're using a currency that is pretty much like the dollar, regulated as the dollar, inflated as the dollar, why not just use the dollar?

Since it's an Ethereum token, you can write smart contracts that use dollars instead of smart contracts that use ETH.

Buuuutttt, since it's not dollars you have to trust that a market maker counterparty will stand behind the peg when you do want to liquidate.

Re: Coinbase is launching support for the USDC stablecoin

#264

Post by nostrademons » Tue, Oct 23, 2018, 9:32 PM UTC

alistproducer2 wrote: post #68

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…

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…

Coinbase's observation is that the cryptocurrency ecosystem is filled with many different players, with many different goals, and by facilitating commerce between them they can profit off all of them.

Your goal may be to accumulate Bitcoin and develop the technology until it takes over as the world currency. An (honest) ICO's goal is to take Bitcoin or Ethereum, convert it into fiat, and use that money to fund development of an interesting new technology. A day-trader's goal is to get rich off short-term price movements. An arbitrager's goal is to get rich off of price differentials on different exchanges.

So your goal might manifest itself in the strategy of "Always buy when I have fiat available, never hold money on an exchange, and invest in promising ICOs that look like they actually have a product and interesting technology." You buy Bitcoin monthly on Coinbase, immediately move it off Coinbase into your own wallet, and buy promising ICO tokens on IDEX as you become aware of them. This makes the price of Bitcoin on IDEX lower than on Coinbase (since you only buy on Coinbase and sell on IDEX), so an arbitrager buys on IDEX and sells on Coinbase. Your purchase was a net buy of Bitcoin relative to fiat, which makes the price rise, so a day trader takes note of that and decides he's going to sell and park his money in USDC until the arbitrager comes along and sells on Coinbase. Eventually everything evens out, and Coinbase makes a profit off every transaction.

You didn't have to deal with USDC at all, and only with Coinbase as a regulated U.S. exchange where you can exchange $USD for Bitcoin. But the other participants in this market have no moral issue with censorship or centralization, and they're all too happy to take their profit and park it in USDC while they're looking for buying opportunities.

Re: Coinbase is launching support for the USDC stablecoin

#265

Post by alcio » Tue, Oct 23, 2018, 9:36 PM UTC

It's funny that the USDC website doesn't list the main use of stablecoins (especially Tether) these days: arbitrage.

When moving fiat between two exchanges can take days and flag your accounts for suspicious activity, moving the same value using Tether is much much faster (~30 mins to 1 hour).

If one observes how does USDT flows, you'll find that it flows between the 3 or 4 major exchanges that use it, with almost no use elsewhere: no major wallets, no merchant acceptance, etc..

Re: Coinbase is launching support for the USDC stablecoin

#266

Post by [deleted] » Tue, Oct 23, 2018, 9:39 PM UTC

asynchrony wrote: post #256

valarauca1 wrote: post #253

Earlier quoted context omitted.

this challenge cannot be circumvented. Division of tasks, and specialization naturally trend to hierarchical organization for the same reason divide and conquer algorithms are so efficient. Separation of concerns is powerful. There is much different of 5-6 shoemakers picking the same person to handle their finances so they can focus on making shoes. But, how many shoe makers can offload their finances until you have…

Could you try saying this some other way? I don't grasp your meaning at all.

[deleted]

Re: Coinbase is launching support for the USDC stablecoin

#267

Post by nostrademons » Tue, Oct 23, 2018, 9:48 PM UTC

asynchrony wrote: post #254

nostrademons wrote: post #252

Earlier quoted context omitted.

"Rebuilding the current regulated banking system" just with different people in charge can be quite lucrative if you are one of the new builders who is now in charge.

I can definitely see the attraction for entrepreneurs, just not the value for anyone else.

It's a form of time-arbitrage.

The cost of regulation is a decrease in both convenience and innovation. By eliminating regulation, you get a whole host of new startups that were previously held back, some of which solve genuine problems that have no existing solution. Consumers flock to these startups because right now, in this moment, they solve problems better and are more responsive to customers than the existing regulated incumbents.

Many regulations solve problems that only appear at scale, so as long as the new startups are small and voluntary, regulators take a hands-off approach and let these startups enjoy their competitive advantage. It takes time for regulators to catch up, so for several years, these new solutions can grow and get new adopters. Eventually all the bad behavior that caused the regulations in the first place appears, and there're calls for regulation, and the new boss starts to look an awful lot like the old boss. But people don't make their purchasing decisions based on what's going to happen in 20 years, they make their purchasing decisions based on what they need now.

You see this with a lot of dot-com era startups. People knew in 1997 that Amazon was going for monopoly and was just going to jack up prices when they achieved it; hell, Jeff Bezos even told investors as such. But consumers didn't care: we wanted convenience and low prices now, and even if we did without, other people would give Amazon their business, and all we'd succeed at is disadvantaging ourselves. Similar with Facebook; most people knew they were trading away their privacy (Zuckerburg's "dumb fucks" IM was made public in 2010, and he said it in 2004), but goddamnit, people wanted to see what their grandkids were up to.

Re: Coinbase is launching support for the USDC stablecoin

#268

Post by [deleted] » Tue, Oct 23, 2018, 9:58 PM UTC

nostrademons wrote: post #267

asynchrony wrote: post #254

Earlier quoted context omitted.

I can definitely see the attraction for entrepreneurs, just not the value for anyone else.

It's a form of time-arbitrage. The cost of regulation is a decrease in both convenience and innovation. By eliminating regulation, you get a whole host of new startups that were previously held back, some of which solve genuine problems that have no existing solution. Consumers flock to these startups because right now, in this moment , they solve problems better and are more responsive to customers than the existing…

[deleted]

Re: Coinbase is launching support for the USDC stablecoin

#269

Post by [deleted] » Tue, Oct 23, 2018, 10:11 PM UTC

hudon wrote: post #195

mitchdoogle wrote: post #192

Earlier quoted context omitted.

I think they mean if you are using your own wallet to store your bitcoin, then coinbase and gemini have no control over what you do with it, except not using their own services

Then back to my original point: If no exchanges allow you to deposit BTC, what are you doing with it? Once you've shamir-secret-split your multi-sig cold-storage private keys, laminated them, placed them in fireproof envelopes and dug them deep in the ground in 5 different continents... what exactly do you DO with your BTC?

[deleted]

Re: Coinbase is launching support for the USDC stablecoin

#270

Post by anonytrary » Tue, Oct 23, 2018, 10:18 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…

> 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.

I think the key difference is that Bitcoins are mined into existence according to a fixed mathematical law, whereas stablecoins are backed by something which can be printed into existence whenever the central authority pleases.