“Why do people care about stablecoins then?” A mix of “they encourage dollar-denominated liquidity in the cryptocurrency ecosystem and discourage withdrawal of the same” and “they’re good for money laundering.”
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“But they make value transfer between exchanges much faster!” This was a solved problem in traditional finance, too, mostly through the extension of credit. (It doesn’t matter how long settlement takes if there is sufficient trust to enable credit.)
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The Bitcoin ecosystem is *positively allergic* to credit, so you have to call it a coin for them to accept it. And after you call it a coin they ignore everything the world has learned about credit, like risk management.
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“Stablecoins aren’t credit!” They’re pretty much exactly credit? A tether is a zero-coupon Bitfinex bond with a non-functioning call option. I
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*I* cared about that part of the Bitcoin pitch, grump humpf. Because 2018 is the darkest timeline, instead the current market leader in the Anglosphere is run by freaking Starbucks.
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Can you imagine working on that program? It must be fun, frustrating, and terrifying all at once.
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I'm sure this is insightful. But you're so far above my head now, it makes me sad :( because I think you're really on to something here.
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At a minimum, I think he's pointing out that if stablecoins do all the stuff Bitcoin *says* it wants to do, most of what's left as an unfilled feature request is "speculation in highly-volatile non-reality-linked securities." In other contexts, we'd say "gambling."
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The difference is that stablecoins can easily be shut down by attacking their issuers.
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To say "stablecoins accomplish basically all of the original design goals for Bitcoin qua a transactional mechanism (instant free value transfer anywhere)" is to say that they don't accomplish its design goals. So it's not much of a point to respond to.
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