Decentralized
> the transfer of authority, decision-making, or operational functions away from a central authority to smaller, local, or distributed nodes, systems, or entities
Most Treasuries are held by US banks, investment firms and municipalities. I'm pretty sure those firms hold a good chunk of global stablecoin volume, given the nonexistent regulation of crypto in the US relative to other countries.
No-one in the real world wants to be paid with a $USR. Most everyone wants a cashapp/zelle/PayPal/wire transfer. The bullshit payment systems gained ground on crypto while crypto became more difficult/less usable
If you track the FATFs crushing of bearer bonds, bearer notes, non-KYC/non-AML offshore banking, and Hawala it almost perfectly tracks with the rise of crypto.
I don't know what USR is, but I would prefer to be paid in USDT or USC if Wealthsimple supported it as deposit method. When I withdraw, I do Deel -> Wise -> Interac e-Transfer -> Bank -> Interac e-Transfer -> Wealthsimple. This is incredibly stupid and I am forced to buy Canadian dollars. For groceries or electronics, you can buy gift cards using crypto.
But you do have to deal with bullshit payment systems. I can't receive stablecoins in my regular bank account, I'd have to set up some crypto nonsense on DankRocketBets or whatever for it to even work.
Why would I do this when I can already receive actual USD without any extra ceremony?
Stablecoins are a solution in search of a problem.
The problem presents itself when you have dirty money to launder. It isn't a product for non-criminals but they have to convince enough gullible people to participate and blend in with them.
If your employer does direct deposit of USD into your USD bank account, you don't need stable coins. This is not the case for most people outside of the U.S.
Most people don't realize they're inside a plexiglass shielded financial jail until they try to do something like wiring money for some legal activity in someplace spicy or on the FATF grey list.
If you fall into the middle bands of uses, or in the upper class that can just bend or make the rules, then the financial system is well oiled and it looks like the people questioning it are just cranks.
It's true that a lot of those in the outer bands are criminals but others are things like "buying a truck to build an orphanage for starving Iraqi children just outside of terrorist territory" or "wanted an investment visa in some corrupt island paradise and as it turns out no bank will open up account for purposes of 'international wires to the Comoros' "
Oh yeah, "most people outside the US" are looking to build orphanages in deeply sanctioned war zones. How could I have forgotten.
Come on now, that's absurd. If this is your best use case for stablecoins - groping for concocted scenarios to rationalise their existence
- I stand by what I said earlier: they're a solution in search of a problem.
One of the two is very close to something that actually happened to me. I tried to open up a bank account for paying immigration related costs to a particular shithole country, which is both legal and was part of a fully legal endeavor, but no bank would do it.
The other example is somewhat concocted but rooted in the time I spent in Iraq and noting almost all transactions are performed outside the banking system, in part because banking is inaccessible and people often don't have access to KYC documents.
It's really not absurd. As soon as you start trying to do anything interesting the KYC/AML burdens get greater until eventually you realize the compliance officers are just trying to get you to go away (or just deny you outright), get interesting enough and then suddenly despite fully complying with the law you find the walls are closed around you. Most people never find out because they never have occasion to try, they do a bunch of boring domestic transactions plus maybe some international trade with a few well known entities, then they just shout people are making up absurdities.
Clearly your situation of trying to obtain residency in the Comoros by investment would raise eyebrows at banks whose job it is to monitor tax compliance. I don't think you're describing an everyman kind of scenario.
I also don't entirely understand why you're even rationalising the purpose of the account to the bank. Can't you just open an account for any purpose? It takes me five minutes to open an account online, and I've never once been asked to explain or justify anything (in many decades). I use my accounts robustly, including for international transfers (I've lived on two continents in the last four years). I even once paid for a trip to North Korea out of an ordinary bank account. My bank never batted an eye.
Maybe you're just dealing with a bad bank, or an over-regulated banking system (Europe?). You realise you can walk into any US bank right now and they'll just open an account for you with nothing more than some accurate ID? And the same holds for much of the rest of the world? The problem you're trying to solve is already solved.
>> The other example is somewhat concocted but rooted in the time I spent in Iraq and noting almost all transactions are performed outside the banking system, in part because banking is inaccessible and people often don't have access to KYC documents.
Unsophisticated semi-literate farmers are the last demographic anyone is reasonably expecting to open their crypto brokerage accounts and start trading synthetic USD derivatives.
These are just not realistic scenarios. This is what people say when they rack their brains trying to come up with some reason stablecoins might be useful. I feel like you're just confirming that they're a solution in search of a problem.
> You realise you can walk into any US bank right now and they'll just open an account for you with nothing more than some accurate ID?
There's an ocean in the way, not to mention how risky visiting looks right now. I changed my name recently and the one US bank that I managed to get an account with (so that US clients can pay me without weirdness) won't accept any kind of documentation without going there in person (and I'm not sure I can provide anything they'll accept even if I did go there in person). What now?
Well no matter what you say it's always nuh uh, doesn't count or some variation of why can't you just be an "everyman." It's hard to argue with a dogmatic position that is based on feelings. You can tell such person what's actually happened to me when I tried to open an account with only "accurate ID" (a US passport) and they literally won't do it while you are homeless because they require a proof of address for KYC even if you have none. Almost everything they have asserted is plainly false. They also claim to have used their bank account to pay for trade in North Korea, a comprehensively sanctioned entity, which seems to be a public written confession of committing a serious crime just to own the crypto use crowd for internet points lol.
People in the middle bands of uses are just ignorantly bliss. And moving between "2 continents" in some vague most likely semi-developed white listed countries in most cases doesn't fall outside the middle bands of uses. So you end up with people shaking their fists at the sky crying that crypto exists, with their fingers in their ears and loudly proclaiming anyone using it are just making up absurd contrived scenarios.
>> They also claim to have used their bank account to pay for trade in North Korea, a comprehensively sanctioned entity, which seems to be a public written confession of committing a serious crime just to own the crypto use crowd for internet points lol
Lol. Thanks, Mr Google Esq.
I was indeed in North Korea. It was not particularly hard to get to before COVID (I'm told it's harder now). You have no idea what the laws of my jurisdiction are were at the time I went, or the purpose of my visit and whether sanctions even extend to it, whether I sought any exemptions from my government, etc - but please tell me more about all these alleged serious crimes you've just discovered on Wikipedia.
>> So you end up with people shaking their fists at the sky crying that crypto exists, with their fingers in their ears and loudly proclaiming anyone using it are just making up absurd contrived scenarios.
See, the problem with all your posts is that you're just spinning one tale after another. You need crypto for all the orphanages you're building in war zones. You need crypto for illiterate Iraqi farmers. You need crypto for your Comoros citizenship purchases. Never mind that none of that makes any sense - it's everyone else who's not listening to you! And all your super legitimate, not at all made up, not at all tax fraud related use cases for stable coins!
Why is it more absurd to want to build an orphanage in Iraq or buy a residence visa somewhere off the beaten path than it is to proclaim you've gotten sanctions exemptions for North Korea in the context of you explicitly pointing to the use of US bank accounts? Why is your anecdotes somehow more valid than mine?
Suddenly when it comes to your North Korea escapades (while proclaiming about mr. "everyman", lmao) I just don't have all the facts and nuance, but you just handwave away any of the uses I point to. Get real.
I never said I obtained sanctions exemptions, I merely pointed out you're just straight up making stuff up when you're concocting "serious crimes" with no knowledge of the underlying facts whatsoever. Which seems like a bit of a pattern with your posts, to be frank.
It's relatively trivial to visit North Korea, and there are many reasons one might do so that may not fall afoul of any sanctions (journalism, research, aid, and so on). It's ludicrous to proclaim you're building orphanages in Iraq for which you require crypto stablecoins. These are not even remotely comparable claims.
It's funny how you can know all the facts to be sure stable coins aren't applicable to some others' scenario but if someone dare point out that you paid a comprehensively sanctioned country by god they're not allowed to use the same evidentiary standards you have presented. And for the record, I said it seems as if a confession to a crime, not that it actually was one.
Seems as if you don't like it when your own logic is used on you. Which seems like a bit of a pattern with your posts, to be frank.
Lol. Evidentiary standards? Mate, I don't give a flying fig if you believe me or not. You asked for my experiences, so I gave them to you. I certainly don't believe you, so you're free to not believe me. Seems only fair.
Your claimed use cases for stablecoins are utterly fantastical and I think your posts speak for themselves.
I did not ask for your experiences. You were the one asking ("waiting"). Then just dismissing anyone that told you because it was never a genuine question.
Pick an FATF grey list country that isn't sanctioned by your country. Then try to wire money there. Let me know how it goes and whether you really aren't asked to explain anything.
Running down a list of corner cases means that you've already accepted the central idea. It's a classic internet troll-as-in-fishing gambit for derailing conversations that's been weirdly normalized.
Stablecoins enable cash-like (instantly redeemable and verifiable) payments for large amounts, for almost free.
In EU countries, you can't now buy a car with cash. You have to buy a bearer's check from your bank, which is expensive, requires that both parties have a brick and mortar bank, and doesn't work cross-border. Stablecoins solve this.
It was good while ago, but last time I bought a car I just did bank transfer. SEPA transfers are entirely free. Was kinda amazed that they just handed me keys when I showed them the receipt from my own online bank...
If you get scammed, it requires you to sue, many EU countries have very long waiting times for those, so you'll be carless and money less for a long time. Cash or crypto solves this elegantly.
Intra-bank transfers are instant, so is PayPal/Revolut/Zelle or whatever else, and many inter-bank transfers are also instant or very nearly so in the EU. None of these, except maybe cash, protect you from someone sinply not delivering the physical good (car + car keys) after the transfer completes.
From a legal standpoint, the bank transfer speed is anyway irrelevant - you first sign a sale contract that makes the car yours and the money theirs, before anything actually exchanges hands. If one party fails to deliver the money or the other fails to deliver the good, they are anyway liable. With instant transfers, the buyer is more likely to get scammed; with delayed transfers, both the buyer and the seller are equally as likely to get scammed - that is the only difference.
Many EU countries have limits on cash payments, and the EU will enforce a union-wide limit of 10,000€ in 2027. Of course, this limit won't be reevaluated over time, so the real value will decrease with inflation.
The use case would be for transactions between individuals. A friend working at a large industrial firm told me recently that crypto would solve a problem that they have in Asia: orders are often done during auctions from the producer, and require instant payments; however the payment rails take two weeks to clear a transaction. Crypto would fix this.
The fact that it's not widespread doesn't mean that there isn't a usecase.
They are cryptocurrencies. But they are not fiat. They are IOUs of fiat. Token represents promise of some other party to possibly redeem(if you collect enough tokens) to convert it to more commonly accepted fiat they promise they somehow hold.
Your money is safe with us. We promise. With lot less oversight than most other solutions for holding money...
I mean they use Blockchain, right? Isn't that like the only real requirement for the name crypto?
As long as you burn as much electricity as Andorra does in a week just to make a transaction, you're probably a cryptocurrency. And that's their sole benefit it seems.
>I mean they use Blockchain, right? Isn't that like the only real requirement for the name crypto?
Absolutely not. Cryptocurrently exclusively refers to permissionless, decentralized, cryptographically secured, irreversible, fungible monetary system with a disinflationary or non-inflationary supply, following a voluntary, collectivized governance model.
A vast majority of tokens colloquially referred to as "cryptocurrency" couldn't be further from these principles. There are no stablecoins that are cryptocurrency. Ethereum is not cryptocurrency. Any coin issued by a corporation (e.g. Ripple) is not a cryptocurrency.
Ethereum is a great utility token. Smart contracts absolutely have utility in the digital economy. It's just not a cryptocurrency, is all. It had a massive premine, there's no supply cap, it's subject to OFAC censorship, and has effectively demonstrated that just ~4.8% of the total ETH supply can vote to cause rollout and widespread adoption of a fork that reverses transactions.
We need different words for these fundamentally different things, because conflating them causes real confusion, as this very hack demonstrates. People are surprised that an admin can lock transactions precisely because the word "cryptocurrency" led them to assume properties that don't exist in stablecoins.
Where did the 4.8% number come from? Is it based on the validator stake? How does that compare to the number required to fork Bitcoin as a function of it's supply?
There was a vote after the DAO incident to roll back. 87% of those that voted voted yes (for the rollback), but only 5.5% of the total supply voted at all.
Is there even any currency that meets that definition? Iirc even bitcoin had some kind of reversal back in the day, or am I misremembering? I seem to recall bitcoin splitting in 2 for a while as there was some disagreement on whether the reversal should be made or not.
I don't know how this specific thing works, but I don't really see any fundamental problem with mixing and matching. If you believe in the benefits of crypto, then 50% crypto is still possibly better than 0%.
It's not like I forgo a lock on my front door just because my windows are made of glass.
Not really. At a traditional bank I have to trust n people with varying degrees of access. Et ceteris paribus, any reduction in n is an improvement, even if n is not zero.
Of course n can be smaller and the specific people less trustworthy, but that's quite a different thing.
At a traditional bank you have your national deposit insurance scheme; you get that in return for converting your "assets" to the said nations issued currency but accept the authorities control of the money supply and your funds.
With decentralised money, you get the safety of a globally distributed attestation backed by cryptography without a single authority controlling the supply of money or your funds.
There is no halfway option. You either have a single authority that can exercise control or you do not; number of delegates for exercise of control is almost irrelevant since you can change banks.
I mean you're just making bare assertions, of course there are halfway options. Different components of the account or relationship can have different parameters. Most crypto products are not the equivalent of depositor accounts anyway, they wouldn't be insured necessarily at a traditional bank either.
Most "crypto" products aren't even crypto but custody accounts. But that doesn't change the fact that blockchains that can be controlled by specific entities unanimously are a joke of a crypto.
There are just some things that are unsolved. For example, a smart contract can't act as an oracle for many types of external event. There's no way around that. Doesn't mean it's not valuable to make the rest of your product trustless. Reducing the keyholders matters. Unless you think NSA key escrow is also cool because hey, one person, somewhere, has the key, so why not the whole government?
That access is to provide account support, no? Reverse fraudulent transactions and the like. A "bank" could just not do that save for if you're a large enough client to merit attention but why would I want to bank there if I'm not a large enough client?
You're expected to do your own research about how it works, who the keyholders are, and what permissions they have. You're free to choose only projects where n=0. If you choose n>0, you have to work out your trust and confidence level. You're always free to use the traditional financial system as well.
FDIC deposit insurance does not protect against losses due to theft or fraud, which are addressed by other laws.
That's covered by private bankers bond insurance, much like you could get for a decentralized stored pots of gold or you can buy insurance in the form of put options (like on IBIT) on the loss of value of bitcoin or if your cold wallet is stolen you can initiate legal proceedings against the thief.
That's good to know. I guess that makes sense though as those swindled by Madoff had to recoup their money through Madoff's estate instead of FDIC.
I guess Hollywood has mislead us yet again in pretty much every bank robbery scene with dialog like "Nobody panic. We're not stealing your money, we are stealing the bank's money".
The primary selling points of cryptocurrencies are all hinged on the promise that they are decentralized and can't be controlled by a single entity. Without that, all they are is a new version of PayPal or a credit card network that requires many orders of magnitude more compute resources to maintain.
Makes it easier to do pump and dumps, was never about "privacy" or "decentralization" as web3 types parroted 4-5 years ago. Monero is the exception btw.
