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Reserve – A flexible pool of stablecoins designed to reduce risk

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Re: Reserve – A flexible pool of stablecoins designed to reduce risk

#81

Post by secfirstmd »

rojeee wrote: post #64
arcticbull wrote: post #44

Earlier quoted context omitted.

It's always a pleasure though! :) I certainly learn a lot from y'all. I should say, I freely acknowledge I don't have all the answers - clueless in some cases even, to borrow a turn of phrase. I find crypto fascinating, like many folks, from a technical perspective. I remain unconvinced about it's practical real-world applications.

To back you up somewhat with a personal anecdote... I've been working in the blockchain World for about 8 years across crypto and enterprise blockchain as an engineer, researcher and more recently a product manager, and and have come to the conclusion that there are not really very many practical applications for crypto or enterprise blockchain. For crypto, other than censorship resistance - which most people don't a…

What's your view on stuff like Sia and Filecoin? I agree with you about the lack of actual use for stuff like Bitcoin etc but the storage cost aspect of those two is interesting for sure.

Re: Reserve – A flexible pool of stablecoins designed to reduce risk

#82

Post by notahacker »

CryptoPunk wrote: post #55
bastawhiz wrote: post #38

> Crypto-as-money is still young. We have a lot to do. Do you remember Napster? Tether is kinda like Napster – it's taking off, people love it, it's a little sketchy, and it's probably not the design that will last. We don't want to make the equivalent of Kazaa – another blip in the history that ultimately doesn't ultimately work out. The challenge is to build a platform that's as robust as BitTorrent and as great to…

>>KYC processes are, essentially, the law They do not apply to all financial interactions. Fortunately they have not yet passed KYC laws that apply to many types of peer-to-peer financial activity, as the ones in force were designed for an era where electronic transactions were only intermediated by large trusted third parties, and largely exempt direct p2p transactions. So this sudden opportunity to legally engage i…

> Similar to how the internet forced governments to back off on censorship laws, cryptocurrency has the potential to force the political class to rethink current financial crime laws and liberalize people's access to money.

Or it has the potential to force the political class to rethink current financial crime laws, and tighten up P2P loopholes cryptoenthusiasts are exploiting to make their product more attractive to ransomware developers, to the detriment of everyone else who just wants to avoid photocopying their passport every time they send money to their friends. I wonder which is more likely.

Re: Reserve – A flexible pool of stablecoins designed to reduce risk

#83

Post by dsr_ »

rglullis wrote: post #80
fock wrote: post #73

Earlier quoted context omitted.

if that's only for 10k libertarian tribes, then I guess it does a good job. Unfortunately the nice hardware and electricity grid actually needs a society to build and maintain. And these are much more people thank 10k libertarians. Just because it still pops up and noone responds to it at all. How many transactions can bitcoin handle nowadays? And how much energy does it consume again for that?!

> Unfortunately the nice hardware and electricity grid actually needs a society to build and maintain. How much energy, money, human resources were spent already on research of, say, Fusion Energy? Has it produced anything close to being net-positive? Should we call it quits? Who gets to represent "society" to make such a call? > How many transactions can bitcoin handle nowadays? How many tons of cargo could the firs…

The first airplanes had a clear commercial advantage over other methods of transport: speed.

High-value, low-mass packages were transported by airplanes by 1911; by 1918 the USPS had an official air-mail service. That's fifteen years from the Wright Brothers' flight, and only ten years after the first flight of a full mile's distance.

So airplanes were economically a net positive 15 years after their invention. Chaum's ecash, which I think is reasonably comparable to the Kitty Hawk flight, was 25 years ago.

The primary use of Bitcoin that I encounter in my daily life is in ransom requests. If I want to make a legal million dollar payment, it's easier and safer to have the bank do it than to use cryptocoins. If I want to make a $20 payment, it's much easier and safer to use a credit card than cryptocoins. While I quote these extremes, everything [legal] in between is also easier and safer than cryptocurrency.

If the "things that need to be worked on before" don't include any of these cases, what do they include?

Re: Reserve – A flexible pool of stablecoins designed to reduce risk

#84

Post by rglullis »

dsr_ wrote: post #83
rglullis wrote: post #80

Earlier quoted context omitted.

> Unfortunately the nice hardware and electricity grid actually needs a society to build and maintain. How much energy, money, human resources were spent already on research of, say, Fusion Energy? Has it produced anything close to being net-positive? Should we call it quits? Who gets to represent "society" to make such a call? > How many transactions can bitcoin handle nowadays? How many tons of cargo could the firs…

The first airplanes had a clear commercial advantage over other methods of transport: speed. High-value, low-mass packages were transported by airplanes by 1911; by 1918 the USPS had an official air-mail service. That's fifteen years from the Wright Brothers' flight, and only ten years after the first flight of a full mile's distance. So airplanes were economically a net positive 15 years after their invention. Chaum…

> The first airplanes had a clear commercial advantage over other methods of transport: speed.

And blockchain enables people to send value without intermediaries around the world in less than a few minutes.

Key point: without intermediaries. Any comparison with existing banking systems is moot.

> If the "things that need to be worked on before" don't include any of these cases, what do they include?

- How to get the systems safer to use, so that people can reduce their dependence on existing banking/financial structure.

- How to create other use-cases beyond transmitting value: to create credit systems (along with credit ratings, insurance instruments), to eliminate notaries and have blockchain be also used as a record of private property, deeds, etc.

- How to find a better point in the trade-off decentralization/permissionless/operational cost x centralization/permissioned/economies of scale. That is what Layer-2 solutions are about.

- How to develop and architect applications that make use of this technology without destroying value.

Do you need more?

Re: Reserve – A flexible pool of stablecoins designed to reduce risk

#85

Post by iSnow »

Tepix wrote: post #9

I had this rather simple idea the other day: Why not create an artificial index over the last X days and trade that instead? No matter how crazy the price changes of a crypto coin are, the X day average will always be dampened because today's changes will only be 1/X of the change of the average.

Sounds like it would break down real fast if it just says "we track BTC avg over X days" and has no means to defend it.

Consider the following scenario: your index (let's call it BTCEMA) tracks BTC at $30k but BTC does a crypto thing and drops $5k in a day, so it's now below the index. A lot of traders would sell your BTCEMA tokens to buy more real BTC expecting a recovery or get into stable coins expecting a further drop. At any rate, the exchange price of BTCEMA would drop due to sell pressure.

Your indicator has "broken peg" which is an ugly situation that threatens every artificial instrument in that space. The whole miracle mixture for algorithmical and asset-backed stable coins is to prevent such a situation to happen for a longer time. It's a bit too much to explain but they try to defend against this in different ways, e.g. reducing supply to hike price.

In your case, you'd need to buy BTCEMA from the market to prop up price for as long as it takes the moving average to digest the sudden price jump. You'd find yourself in the situation of the Bank of England trying to defend the Pound in 1992 and only making Soros rich instead.

Re: Reserve – A flexible pool of stablecoins designed to reduce risk

#86

Post by TheColorYellow »

CryptoPunk wrote: post #68
ac29 wrote: post #51

Earlier quoted context omitted.

"Furthermore, the Reserve network is, in a sense, a new kind of government. We are supplementing - and in some cases wholly replacing - the government function of money" From their Ethics page. Should go over well with regulators.

Regulators work for us, and should be answerable to the people through their democratically elected representatives. Their job shouldn't be to protect and expand the control the state wields. It should be exclusively to further the public interest, whether that is through expanding state power, or relinquishing it to make way for new non-governmental mechanisms of socio-economic coordination. I understand your point…

What proof do you have that decentralization technology furthers public interest?

I'm sorry, but the institutions are in place today precisely because it is society that upholds them or tears them down. The gears may turn slowly when it comes to implementing change, but they very much are answerable to the public in democratic societies.

Re: Reserve – A flexible pool of stablecoins designed to reduce risk

#87

Post by mlthoughts2018 »

codebolt wrote: post #52
rglullis wrote: post #36

Earlier quoted context omitted.

On one hand, yes, you are right. This "it's turtles all the way down" approach regarding valuation of tokenized assets is a huge source of systemic risk and those that want to be able to get greenbacks will be better off by using centralized stable tokens (like Circle's USDC or STASIS' EURS) On the other hand, any project that can be transparent about its reserves (whether though "smart contracts" or plain old armies…

Remove the unconstrained supply of Mickey Mouse money (Tether) and eliminate wash trading, and you will watch Bitcoin descend into the abyss rather quickly.

Personally, I see these issues purely as “buy the dip” investment opportunities. For many speculative investors, the crazy volatility from factors like these is what makes crypto attractive. I see a deeply undervalued long-term value proposition for cryptocurrency, where the big risks for today involve the minefield of manipulation issues that have to be survived to get to the other side where the assets appreciate hugely due to a true valuation mechanism, no longer wanton speculation.

In other words, I’ll be happy if bitcoin crashes from Tether (I believe it will, probably to well under $20,000) - that is nothing more than a huge buying opportunity.

Re: Reserve – A flexible pool of stablecoins designed to reduce risk

#88

Post by riffraff »

CryptoPunk wrote: post #55
bastawhiz wrote: post #38

> Crypto-as-money is still young. We have a lot to do. Do you remember Napster? Tether is kinda like Napster – it's taking off, people love it, it's a little sketchy, and it's probably not the design that will last. We don't want to make the equivalent of Kazaa – another blip in the history that ultimately doesn't ultimately work out. The challenge is to build a platform that's as robust as BitTorrent and as great to…

>>KYC processes are, essentially, the law They do not apply to all financial interactions. Fortunately they have not yet passed KYC laws that apply to many types of peer-to-peer financial activity, as the ones in force were designed for an era where electronic transactions were only intermediated by large trusted third parties, and largely exempt direct p2p transactions. So this sudden opportunity to legally engage i…

> how the internet forced governments to back off on censorship laws

Did they? Governments regularly censor stuff on the internet all over the world.

Re: Reserve – A flexible pool of stablecoins designed to reduce risk

#89

Post by dsr_ »

rglullis wrote: post #84
dsr_ wrote: post #83

Earlier quoted context omitted.

The first airplanes had a clear commercial advantage over other methods of transport: speed. High-value, low-mass packages were transported by airplanes by 1911; by 1918 the USPS had an official air-mail service. That's fifteen years from the Wright Brothers' flight, and only ten years after the first flight of a full mile's distance. So airplanes were economically a net positive 15 years after their invention. Chaum…

> The first airplanes had a clear commercial advantage over other methods of transport: speed. And blockchain enables people to send value without intermediaries around the world in less than a few minutes. Key point: without intermediaries . Any comparison with existing banking systems is moot. > If the "things that need to be worked on before" don't include any of these cases, what do they include? - How to get the…

All of these things except "without intermediaries" are already solved with intermediaries. Intermediaries are desirable: they solve problems so that the end users don't have to do it. It's fundamental to programming, in fact: you don't handwrite machine code, you use a language with libraries that gets interpreted or compiled to run on an operating system that provides lots of useful facilities and abstractions so that you don't have to care whether the machine is connected via a 3Com 905b or a Lucent Orinoco, and the same code that worked over those obsolete interfaces still works over a 10gig fiber NIC.

In particular, intermediaries allow people to fix mistakes. And people make mistakes all the time.

People like banking; it's individual banks that they hate. Better regulation fixes that. Unregulated transactions are terrible: the entire history of finance proves that people will lie, cheat and defraud each other if given half a chance.

Financial safety comes from the ability of a trustable third party to adjudicate and correct mistakes and disputes.

If you want to compile a credit rating, you need an accurate history of transactions. Blockchains don't give you accurate histories, they give you timestamped signed logs of entries that are really really difficult to amend. "This landlord reported that I was late on rent but I've never lived in that state" is a complaint that a credit agency must accept and evaluate.

Eliminating notaries: the purpose of a notary is not just to say "this event happened at this time" but to say "I witnessed this event happening at this time". A blockchain can't do that. You need to trust the notary as well as the notary's log, and random people adding entries doesn't make them trustable.

Record of private property and deeds: you literally want a single authoritative database here, where every write operation is done by a trusted person.

Each of these cases is not "we need a blockchain" but "it's good to have a signed, difficult-to-forge journal that can be inspected and verified".

Your last point is basically "we don't know what cryptocurrencies are good for."

Re: Reserve – A flexible pool of stablecoins designed to reduce risk

#90

Post by rglullis »

secfirstmd wrote: post #81
rojeee wrote: post #64

Earlier quoted context omitted.

To back you up somewhat with a personal anecdote... I've been working in the blockchain World for about 8 years across crypto and enterprise blockchain as an engineer, researcher and more recently a product manager, and and have come to the conclusion that there are not really very many practical applications for crypto or enterprise blockchain. For crypto, other than censorship resistance - which most people don't a…

What's your view on stuff like Sia and Filecoin? I agree with you about the lack of actual use for stuff like Bitcoin etc but the storage cost aspect of those two is interesting for sure.

Not the parent, but my view on Filecoin hasn't changed since this: https://news.ycombinator.com/item?id=23015249

Early adopters are maybe going to profit something because of the money they got from the ICO and some VC, but the economics don't add up.

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