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Coinbase is launching support for the USDC stablecoin

blog.coinbase.com

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Re: Coinbase is launching support for the USDC stablecoin

#381

Post by asynchrony »

hndamien wrote: post #380
asynchrony wrote: post #379

Earlier quoted context omitted.

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 sma…

If the primary medium of exchange is an inflating currency then possessors are incentivized to exchange it. If debt is owed in a deflating currency than the burden of all debts will only grow. Could you address these points rather than simply dismiss them as irrelevant?

Re: Coinbase is launching support for the USDC stablecoin

#382

Post by asynchrony »

acct1771 wrote: post #378
asynchrony wrote: post #369

Earlier quoted context omitted.

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?

There must some ironic meaning of "economy" that I'm not aware of. Societies have gone through many recessions and depressions. Is that what you're advocating?

Re: Coinbase is launching support for the USDC stablecoin

#383

Post by jessepollak »

gammateam wrote: post #357
jessepollak wrote: post #107

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!

What are your thoughts on MakerDao which uses the MKR and Dai tokens for decentralized collateral backed stablecoins called Dai? Their implementation is happening a bit slower due to the novelties but it offers the MKR which is a profit incentive for proliferation, and may be more resilient than centralized stablecoins

Personal opinion, not the company: I think it's very cool. I've been watching them since they launched and have been impressed with their consistent progress. I love using it as an example of financial experimentation and success: they launched at the top of the bubble and have been able to keep stability even as crypto has gone through a massive crash! Pretty amazing.

Re: Coinbase is launching support for the USDC stablecoin

#384

Post by hndamien »

asynchrony wrote: post #381
hndamien wrote: post #380

Earlier quoted context omitted.

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 sma…

If the primary medium of exchange is an inflating currency then possessors are incentivized to exchange it. If debt is owed in a deflating currency than the burden of all debts will only grow. Could you address these points rather than simply dismiss them as irrelevant?

Please note that I haven't dismissed any point you have made despite your initial dismissal of me.

To your point, is a currency is inflating then you are incentivised to not hold it. But who has the right to benefit from the inflation of the supply? How do you fairly determine that? Often inflation is conflated with the rise in prices rather than strictly the inflation of supply, so strictly referring to the latter - inflation occurs, while at the same time economic growth is also occurring, so it isn't 100% clear that the incentive scheme for devaluing a currency will work as it must balance against this growth. Even if it is not balanced, and successfully devalues for your incentive, what is the appropriate rate? Is VEF too much, USD just enough? Wouldn't it make more sense to just have a fixed/known rate of currency supply - eg Bitcoin - decreases to 0, Monero decreases to small.

The problem isn't so much the inflation, it is the unpredictable nature of the debasement and the fairness of who benefits from it. A currency doesn't need to incentivise people to spend it so long as it can always be available as a medium. Infinite divisibility ensures this. Having the medium be a universal standard measure as a unit of account by virtue of being a stable and accessible medium is also essential. Bitcoin achieves this. As for debt burdens growing, this is not always true. If I take a low interest BTC loan for mining equipment and have measured my risk and profit correctly I should be able to pay it off since I am working in this currency. If I borrow USD to start a Venezuelan corner store, I might be in for a bad time.

Re: Coinbase is launching support for the USDC stablecoin

#385

Post by asynchrony »

hndamien wrote: post #384
asynchrony wrote: post #381

Earlier quoted context omitted.

If the primary medium of exchange is an inflating currency then possessors are incentivized to exchange it. If debt is owed in a deflating currency than the burden of all debts will only grow. Could you address these points rather than simply dismiss them as irrelevant?

Please note that I haven't dismissed any point you have made despite your initial dismissal of me. To your point, is a currency is inflating then you are incentivised to not hold it. But who has the right to benefit from the inflation of the supply? How do you fairly determine that? Often inflation is conflated with the rise in prices rather than strictly the inflation of supply, so strictly referring to the latter -…

Inflation benefits borrowers more than hoarders. Your example is strange because in the one you compare a base currency to economic activity in that currency and in the other you take a loan in one currency in order to transact in another. If you borrow bolivars to start a Venezuelan corner store, at least your debt would lose value as rapidly as the currency you receive from your customers. If the price of BTC continues to rise indefinitely, you would be in for an even worse time if you borrowed BTC to start your Venezuelan corner store.

I also don't see how infinite divisibility helps. It's still deflation. Let's say the world converts to BTC. Now if I take a loan of 1 BTC to start my corner store, the value of that 1 BTC will continue to increase, but if the goods selling do not increase in price, I will have to charge less and less for them over time. There's the same amount of space between 1 and 0 as there is between 1 and infinity.

Re: Coinbase is launching support for the USDC stablecoin

#386

Post by hndamien »

asynchrony wrote: post #385
hndamien wrote: post #384

Earlier quoted context omitted.

Please note that I haven't dismissed any point you have made despite your initial dismissal of me. To your point, is a currency is inflating then you are incentivised to not hold it. But who has the right to benefit from the inflation of the supply? How do you fairly determine that? Often inflation is conflated with the rise in prices rather than strictly the inflation of supply, so strictly referring to the latter -…

Inflation benefits borrowers more than hoarders. Your example is strange because in the one you compare a base currency to economic activity in that currency and in the other you take a loan in one currency in order to transact in another. If you borrow bolivars to start a Venezuelan corner store, at least your debt would lose value as rapidly as the currency you receive from your customers. If the price of BTC conti…

You can rephrase that as inflation benefits borrowers more that savers. And borrowers benefit lenders. In the opposite paradigm, savers benefit savers and savers benefit investors. Think of a scenarios that is made up of an economy of a single currency, that is deflationary and everybody saves as much as they can, but they have to eat, so trade still occurs. Those that can save more accumulate more purchasing power until they think it wise to invest and get a greater return. Assuming all perfect investment execution, wealth would tend to aggregate as we see, but overall everybody benefits and see the rising tide lift all boats.

Re: Coinbase is launching support for the USDC stablecoin

#387

Post by asynchrony »

hndamien wrote: post #386
asynchrony wrote: post #385

Earlier quoted context omitted.

Inflation benefits borrowers more than hoarders. Your example is strange because in the one you compare a base currency to economic activity in that currency and in the other you take a loan in one currency in order to transact in another. If you borrow bolivars to start a Venezuelan corner store, at least your debt would lose value as rapidly as the currency you receive from your customers. If the price of BTC conti…

You can rephrase that as inflation benefits borrowers more that savers. And borrowers benefit lenders. In the opposite paradigm, savers benefit savers and savers benefit investors. Think of a scenarios that is made up of an economy of a single currency, that is deflationary and everybody saves as much as they can, but they have to eat, so trade still occurs. Those that can save more accumulate more purchasing power u…

Savers can choose to loan their currency to a bank for some guaranteed returns, they can loan it to corporations and public institutions in the form of bonds, or they can purchase ownership of real estate and businesses through equities. They can buy bitcoin if they consider it a wise investment. Only lenders and the people who insist on hoarding cash suffer from inflation.

Historically deflation has resulted in economic stagnation and depression. The reason is that there is no incentive to borrow or spend money on a risky investment when increasing value of currency over time is guaranteed. What exactly is supposed to be different this time?

Re: Coinbase is launching support for the USDC stablecoin

#388

Post by dwild »

arcticbull wrote: post #135
dwild wrote: post #115

Earlier quoted context omitted.

Square Cash Confirm your country United States United Kingdom Venmo There are two main requirements for using Venmo: You must be physically located in the United States You must have a U.S. cell phone that can send/receive text messages from short codes (please note that this phone number can not be on file with another Venmo account) Your definition of the term exactly doesn't seems exact at all. I can use USDC as m…

Why are you sending US Dollars between yourselves as Canadians? You can’t spend them in Canada, why not use a free and instant Interac e-Transfer? If you want to hold USD (as a hedge against CAD) open a US Dollar denominated account at any major Canadian bank but that’s an investment not a store of value. Or open an interactive brokers account if you want to trade currencies. And if you want to move money to another…

>Why are you sending US Dollars between yourselves as Canadians? You can’t spend them in Canada, why not use a free and instant Interac e-Transfer?

Sorry I didn't see your message until 10 days later. Did you know that the internet is worldwide? I do use an e-Transfer to transfer cash in Canada but more than likely, a transfer on the web will need to be done internationally. A stablecoin is a way to make sure the value is secured, at least as much as what it's backed on and the company holding it, for the duration of the transaction.

Any Canadian Exchange (and not a specific provider) could hold that stablecoin and many people will do arbitrage over it which will make sure I will be able to buy it easily for a minimum of fee.

That's specifically for me as a Canadian in a first world country too. A stablecoin allow that in ANY country, no need to do a case by case.

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