You only need to control 1 variable. Velocity of money is uncontrollable, that’s central planning and it never works.
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Replying to @MustStopMurad @cburniske
So value of this stablecoin wont be so stable, and it wont be so decentralized as oracles will be needed to provide exogenous price data, hence vulnerable. I just dont see it and dont think there will be incentives to store value in a stablecoin having deflationary alternatives
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Replying to @alvarogracia @cburniske
Bitcoin is unusable as MoE/UoA until it is 10T, and even then, we don’t know if it will be stable enough to underwrite long term contracts with (Gold has 15% annual vol)
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Replying to @MustStopMurad @cburniske
Yeah, my view is that you will use an index as UoA and a 10T BTC as MoE, no stablecoin needed
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Replying to @alvarogracia @cburniske
If Indexes are so good, why do we use USD to underwrite everything today?
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Replying to @MustStopMurad @cburniske
Because we come from a post WWII-Bretton Woods system where USD has been given a privileged place in the world economy. If we used a constant value index as UoA, things would be much simpler. (no need to account for inflation, exchange rates...)
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Replying to @alvarogracia @cburniske
Can you loosely explain how you would go about constructing such an Index in a trust-minimized, censorship-resistant manner that is satisfying to most people? Also it remains to be seen if BTC volatility will be stable enough to do commerce / business / contract underwriting
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Let's say we use your Index. In supermarkets, you go in, it says Bread Price: 3 Indexes One day this might mean 0.00023 BTC another day this might mean 0.00029 BTC This isn't good cognitive UX for people There is a place for Stablecoins in the world. TAM is big, even.
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Replying to @MustStopMurad @cburniske
Thats my approach, I understand your reticence but in the new crypto world where someone may store value in any coin, same will happen even if you price it in USD... One day will be 0.021 LTC other will be 0.023... And with an index, at least you know that value is constant
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My point is: if you can store value, its difficult to keep that value stable, cause too many factors are interacting, not even controlling supply is possible, hence the solution is an index, it serves as UoA but its not a traded asset
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My point is: Fixed supply currencies are destined to be more volatile than Those whose supply can be algorithmically controlled. If demand falls, you reduce supply. If demand rises, you increase supply. In my opinion less volatility = less anxiety
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