41–50 of 79 posts
If a group wants to peg a coin to the dollar, why don't they just issue coins for $1, put that directly into a savings account, and allow redemption of any coin for $1?
You have to trust the group that they won't for eg suddenly take the money in the savings account and run off (not honor redemption) some point in the future
The thing the author seems to be confused about is that when people talk about stable coin they aren't claiming that the market can't be irrational. They are claiming that over a sufficient period of time the coin will trend towards its target. In the case of DAI today, that target is 1 DAI == 1 USD. This means that while the market may irrationally buy/sell DAI for more or less than 1 USD, over time it will trend to…
It may attempt to trend towards the dollar over time, but will it be trending that way during the time that you personally need it? "The market can remain irrational longer than you can remain solvent", springs immediately to mind. edit: Also, pegging a cryptocurrency to the dollar seems almost comedically perverse. What is it for?
The frequently cited money transmission benefits of a cryptocurrency, without value instability of playing games with monetary policy.
Earlier quoted context omitted.
It may attempt to trend towards the dollar over time, but will it be trending that way during the time that you personally need it? "The market can remain irrational longer than you can remain solvent", springs immediately to mind. edit: Also, pegging a cryptocurrency to the dollar seems almost comedically perverse. What is it for?
> Also, pegging a cryptocurrency to the dollar seems almost comedically perverse. What is it for? The frequently cited money transmission benefits of a cryptocurrency, without value instability of playing games with monetary policy.
This would seem to indicate that a blockchain coin pegged to the dollar only keeps any marginal utility at all during the period where the technology is novel, as blockchain tech either crashing or becoming successful, would both be events that kill it.
The thing the author seems to be confused about is that when people talk about stable coin they aren't claiming that the market can't be irrational. They are claiming that over a sufficient period of time the coin will trend towards its target. In the case of DAI today, that target is 1 DAI == 1 USD. This means that while the market may irrationally buy/sell DAI for more or less than 1 USD, over time it will trend to…
Won't someone learn to play the peg slip robots? If you can hack a PS4 you can trick some simple arbitrage robots. Not saying it's easy, or I could do it... just that it's an inevitability, right? What happens then?
Earlier quoted context omitted.
> Also, pegging a cryptocurrency to the dollar seems almost comedically perverse. What is it for? The frequently cited money transmission benefits of a cryptocurrency, without value instability of playing games with monetary policy.
If blockchain based currencies prove themselves to be a significant improvement on current monetary systems then state currencies, such as the US dollar, will adopt the new technology, as they have done with all other previous developments in money. This would seem to indicate that a blockchain coin pegged to the dollar only keeps any marginal utility at all during the period where the technology is novel, as blockch…
The US dollar, as such, often hasn't adopted new developments in money transmission directly (at least, not at the consumer level); the circle of businesses facilitating USD transactions has, but a dollar-pegged cryptocurrency is essentially just a new part of that ecosystem.
OTOH, the dollar has adopted, directly, new tools in money supply management, several times in its history.
Earlier quoted context omitted.
You have to trust the group that they won't for eg suddenly take the money in the savings account and run off (not honor redemption) some point in the future
Would US corporate structure offer some security for these funds? So it becomes a case of US embezzlement vs trying to make yourself whole via the blockchain?
I do remember tethers parent company basically couldn't get any US bank accounts
Earlier quoted context omitted.
Tether gets criticized for having no released third party audits that they actually hold the hundreds of millions of dollars that is backing their token. They say they have frequent audits on their website, their transparency update that they called the Friedman audit, in the same paragraph states that it does not constitute as an audit[0]. In the same “audit”, Friedman stated they did not evaluate if tether owned th…
It doesn't even matter if they don't hold the USD to back tether. They make it clear in their ToS that users cannot redeem their USDT for USD. There is no known case of anybody being able to cash out USDT directly from tether.to. It is only possible by exchanging on third party sites or with other users. Tether is a money-printing scam by a company who had their bank account frozen, so instead of handling USD they ca…
"Absent a reasonable legal justification not to redeem Tether Tokens, and provided that you are a fully verified customer of Tether, your Tether Tokens are freely redeemable.
Persons ordinarily resident in, and nationals of, Prohibited Jurisdictions or Sanctioned Persons under Applicable Sanctions Laws; Persons and Government Officials believed or suspected to be transacting in the proceeds of corruption, bribery, or other crimes under Applicable ABAC Laws; and Persons believed or suspected to be engaged in money laundering or terrorist financing under Applicable AML/CTF Laws are not permitted to be customers of Tether; are not permitted to cause Tethers to be issued or redeemed; and, are not permitted to hold or transact in Tether Tokens.
Furthermore, residents of certain U.S. states are not permitted to be customers of Tether; are not permitted to cause Tethers to be issued or redeemed; and, are not permitted to hold Tether Tokens.
Beginning on January 1, 2018, Tether Tokens will no longer be issued to U.S. Persons."
If a group wants to peg a coin to the dollar, why don't they just issue coins for $1, put that directly into a savings account, and allow redemption of any coin for $1?
It is funny because this guy also fundamentally doesn't understand how Basecoin works. "If the price of 1 BASE is above $1, the blockchain prints new $BASE to holders of “BASE Shares” (mother of god), a standalone cryptocurrency which is issued in the genesis block and held by early adopters, which then distributes new Basecoins to them as a “dividend.” Holders of “BASE Shares” are free to either hold onto their Divi…
Isn't that a freakin' textbook definition of a Ponzi scheme?
The author's main point is that since the token is collaterized by ether, the value of the coin depends on ETH rising in value. The token's creators attempt to solve this by over collateralizing 50% which he considers foolish because it just adds leverage to the system so when losses occur, they are exaggerated.