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

Re: Coinbase is launching support for the USDC stablecoin

#371

Post by nybble41 » Wed, Oct 24, 2018, 5:42 PM UTC

atomical wrote: post #227

hudon wrote: post #182

Earlier quoted context omitted.

> With Bitcoin, even if Coinbase blacklists you, you can still send your Bitcoin to other accounts and exchange it for things This is not so. Coinbase and Gemini (I haven't checked others but I'm sure they're the same) will freeze your assets entirely if required by law or if you violate the user agreements in some flagrant way [0] [1]. [0] https://support.coinbase.com/customer/en/portal/articles/190... [1] https://g…

That's not actually true. If you attempt to send a transaction from Coinbase to an address they have blacklisted they will immediately suspend your account. You will be allowed to withdraw your funds before the account is closed.

How effective do you suppose that is, when best practice for some time has been to use a new receiving address for every transaction?

Re: Coinbase is launching support for the USDC stablecoin

#372

Post by hndamien » Wed, Oct 24, 2018, 10:31 PM UTC

asynchrony wrote: post #344

hndamien wrote: post #339

Earlier quoted context omitted.

I don't find it at all desirable that some people have the right to devalue my holdings. It is farcical to think that people would hold the medium of exchange forever if it kept increasing in value because at some point they would either have so much that they would prefer to convert (some of) it into material wealth or chase something with a higher rate of return. Alternatively they would have so little that they wo…

Please don't take this the wrong way, but you sound financially illiterate. Cash is not meant to be held long term. It's meant to be spent or invested. That's how the economy continues to grow.

Don't take this the wrong way, but you sound illiterate since you clearly don't understand the words I wrote in context "medium" and "exchange". The statement "You can't eat the medium of exchange" implies that it is to be spent.

Re: Coinbase is launching support for the USDC stablecoin

#373

Post by hndamien » Wed, Oct 24, 2018, 10:39 PM UTC

pjc50 wrote: post #356

hndamien wrote: post #312

Earlier quoted context omitted.

Currency debasement.

This all comes down to "MV=PQ", a description of the relation between money supply and real economic activity. Normally as the real economy expands (+Q) the amount of money is increased to keep it growing (+M). Without that either the quantity of transactions falls (-V) or the price level falls (deflation, -P). Alternatively, think about what price stability really means . If a loaf of bread costs $1, an hour of work…

If you have a fixed money supply that is infinitely divisible, prices would be expected to fall due to deflation and increased purchasing power. Relative values of bread, hour of work, barrel of oil and a house should remain the same (with the caveat that their real values actually change - eg if we become an electric car economy then the relative price of oil in big macs will change). This makes no difference to anything of substance, it is just mathematics and psychology. The only real substantive issue is with debt repayments with deflationary currency, in which case I'd advise thinking hard about your loan terms.

Re: Coinbase is launching support for the USDC stablecoin

#374

Post by tomhoward » Wed, Oct 24, 2018, 11:26 PM UTC

asynchrony wrote: post #368

tomhoward wrote: post #352

Earlier quoted context omitted.

> you sound financially illiterate That's not really something that can be taken as anything other than an insult. On HN we like points to be made without personal swipes. Aside from making this place a more pleasant place to be, points are often more persuasive that way.

I was just trying to be direct. What would be a more polite way to say that?

You can just deliver the counterpoint, explanaining how you think the parent was mistaken, without the personal insult. “The key point this comment fails to recognise is [useful new info]” might work well.

Re: Coinbase is launching support for the USDC stablecoin

#375

Post by hndamien » Thu, Oct 25, 2018, 2:44 AM UTC

tomhoward wrote: post #374

asynchrony wrote: post #368

Earlier quoted context omitted.

I was just trying to be direct. What would be a more polite way to say that?

You can just deliver the counterpoint, explanaining how you think the parent was mistaken, without the personal insult. “The key point this comment fails to recognise is [useful new info]” might work well.

Thanks Tom, I felt bad making the retort as well as I like HN to be a happy place. For the record, I am majored in finance, mathematics and cryptography well before these things were linked. I discussed Bitcoin with Hal Varian in 2011 and staked our differing positions. It may be too early to call, but Bitcoin seems quite successful so far, and has served me well. I prefer not to rely on my credentials to make a point about economics since this is a logical fallacy.

Re: Coinbase is launching support for the USDC stablecoin

#376

Post by stephen_g » Thu, Oct 25, 2018, 2:58 AM UTC

tcgv wrote: post #364

stephen_g wrote: post #315

Earlier quoted context omitted.

> The issuer might run a fractional reserve (this is the accusation against Tether, the most popular stablecoin at the moment) Very important to note - a stablecoin running a "fractional reserve" in the way that people talk about would just be fraudulent/insolvent. Modern banks have actually never operated under the "fractional reserve" model as described in economics textbooks, but it's true that they only a fractio…

> Modern banks have actually never operated under the "fractional reserve" model as described in economics textbooks How do they operate, if not under the fractional reserve model?

The “fractional reserve” model implies incorrect ideas of how banks work - either as intermediaries between depositors and borrowers, or implying the “money multiplier” model of credit creation. Those are not the case in the real world. The actual model is often called “endogenous money”.

As I said, the confusion many people have is that it is correct that bank reserves are a fraction of the bank’s assets, so the name “fractional reserve” would intuitively seem correct.

This is a good description of how they actually work from the UK’s central bank: https://www.bankofengland.co.uk/-/media/boe/files/quarterly-...

Re: Coinbase is launching support for the USDC stablecoin

#377

Post by asynchrony » Thu, Oct 25, 2018, 3:34 AM UTC

hndamien wrote: post #373

pjc50 wrote: post #356

Earlier quoted context omitted.

This all comes down to "MV=PQ", a description of the relation between money supply and real economic activity. Normally as the real economy expands (+Q) the amount of money is increased to keep it growing (+M). Without that either the quantity of transactions falls (-V) or the price level falls (deflation, -P). Alternatively, think about what price stability really means . If a loaf of bread costs $1, an hour of work…

If you have a fixed money supply that is infinitely divisible, prices would be expected to fall due to deflation and increased purchasing power. Relative values of bread, hour of work, barrel of oil and a house should remain the same (with the caveat that their real values actually change - eg if we become an electric car economy then the relative price of oil in big macs will change). This makes no difference to any…

I think your point about infinite divisibility is an interesting one. But the main downside is that there is no incentive to exchange the currency (a pizza or ownership in a business) when you know that the currency will be more in a year than it is worth today.

Re: Coinbase is launching support for the USDC stablecoin

#378

Post by acct1771 » Thu, Oct 25, 2018, 5:29 AM UTC

asynchrony wrote: post #369

acct1771 wrote: post #367

Earlier quoted context omitted.

No, I'm going to hold you to the original word, because, if you look around - that's what's happening. Our population grows. Our footprint grows. Our consumption and waste grow. Nobody, besides those highest, benefit from this style of function.

Yes, human civilization has been doing this for quite a long time. I'm not really sure what your point is relative to inflation.

Maybe the "economy" continuing to rally is not a good thing, for, yknow, society?

Re: Coinbase is launching support for the USDC stablecoin

#379

Post by asynchrony » Thu, Oct 25, 2018, 5:53 AM UTC

hndamien wrote: post #372

asynchrony wrote: post #344

Earlier quoted context omitted.

Please don't take this the wrong way, but you sound financially illiterate. Cash is not meant to be held long term. It's meant to be spent or invested. That's how the economy continues to grow.

Don't take this the wrong way, but you sound illiterate since you clearly don't understand the words I wrote in context "medium" and "exchange". The statement "You can't eat the medium of exchange" implies that it is to be spent.

There already many ways to exchange cash for assets that are likely to appreciate in value (gold, real estate, equities, bitcoin). Won’t a depreciating asset like cash always make for better incentives to participate in trade than an appreciating one?

Please explain the advantages you see in the simplest terms you can.

Re: Coinbase is launching support for the USDC stablecoin

#380

Post by hndamien » Fri, Oct 26, 2018, 12:34 AM UTC

asynchrony wrote: post #379

hndamien wrote: post #372

Earlier quoted context omitted.

Don't take this the wrong way, but you sound illiterate since you clearly don't understand the words I wrote in context "medium" and "exchange". The statement "You can't eat the medium of exchange" implies that it is to be spent.

There already many ways to exchange cash for assets that are likely to appreciate in value (gold, real estate, equities, bitcoin). Won’t a depreciating asset like cash always make for better incentives to participate in trade than an appreciating one? Please explain the advantages you see in the simplest terms you can.

The features that make cash good as a medium of exchange are not appreciation or depreciation, but all of the other features of divisibility, fungibility, transferability, common acceptance etc. A good medium of exchange need to be valued such that it can be reliably exchanged. Ideally you don't want it going up too fast nor down two fast, but stable enough to make trade. It just happens that Bitcoin is/ was very small relative to the global economy. It also has the benefit that it can't be debased, which makes it a better money - even for trade as well as saving. I just wouldn't consider it "investing" despite the fact it still has room to grow as a currency. It still needs much more work on the fungibility side.