[2018-09-10] CNBC The Winklevii launch the Gemini Dollar stablecoin

squatter

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Quote from: Kakmakr on September 13, 2018, 01:10:19 AM

I think it is a bad idea, because Tether received a lot of bad publicity and investors will automatically shy away from this, based on Tether's history. The barrier to entry into Gemini will also prevent large scale exposure to this, so it will not add a lot of liquidity, if there is no large volume trading being done.

Yea, I am also curious to see how this pan out, because this is a novel angle to inject Crypto into Wall Street. Roll Eyes

As I see it, it's one or the other. Either KYC is too stringent and it discourages liquidity from entering Gemini's markets (so nothing really changes)... or it isn't. We'll have to wait and see. I wouldn't write it off just because of Tether's history. Gemini's reputation + NYDFS approval is in another universe vs. Tether.

Quote from: gentlemand on September 10, 2018, 09:58:04 PM

Quote from: squatter on September 10, 2018, 03:34:41 PM

There's obviously going to be a secondary P2P market that avoids interfacing with AML/KYC. Since it's built on ETH, there's nothing anybody can do to stop that from happening, as Gemini will only have control over issuance and redemption. I'm curious to see how regulators deal with that, and I'm honestly a bit surprised to see this approved by NYDFS.

https://twitter.com/provoost/status/1039183325838098432

Relevant thread here.

I suspect a 'legit' stablecoin will open up a whole new world of weirdness and dodginess and I don't really see how they can completely work their way around it.

Indeed, that's what I'm getting at. They can only control token issuance and redemption since have no control over the ETH network. Obviously, there's no way to stop North Korea from accruing these coins. Cheesy

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Quote from: squatter on September 12, 2018, 03:12:13 AM

Quote from: Kakmakr on September 12, 2018, 01:28:46 AM

The goal is simple. Invent something that will be completely controlled and that would adhere to all the rules and regulations of the people in power to approve it. The twins are basically abandoning Bitcoin, because everything linked to Bitcoin is being denied. They invested a large amount of time and money into Bitcoin projects that are not bearing any fruit.

They are in this to make a large profit and everything they are doing for Bitcoin is being turned down by the puppet masters, so I can understand why they are trying something new to appease the gods of the financial system. Roll Eyes

I think they're trying to drive more liquidity to Gemini. Tether obviously has a big market share. If they can take a bite out of that, some of that liquidity should find its way back to Gemini's order books since it'll have the most liquid GUSD markets. I'm not sure how successful it'll be, since Gemini has pretty tough verification requirements vs. Bitfinex. But I'm really curious to see how this all turns out -- how much GUSD gets issued and what the secondary GUSD markets end up looking like.

I think it is a bad idea, because Tether received a lot of bad publicity and investors will automatically shy away from this, based on Tether's history. The barrier to entry into Gemini will also prevent large scale exposure to this, so it will not add a lot of liquidity, if there is no large volume trading being done.

Yea, I am also curious to see how this pan out, because this is a novel angle to inject Crypto into Wall Street. Roll Eyes

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Quote from: Kakmakr on September 12, 2018, 01:28:46 AM

The twins are basically abandoning Bitcoin, because everything linked to Bitcoin is being denied.

I'd say it was the opposite. With this move they're trying to drive accessibility and lower friction. I do wonder if they wonder when they're going to catch a break, but that's what happens if you're trying something new and you're not part of the woodwork.

squatter

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Quote from: Kakmakr on September 12, 2018, 01:28:46 AM

The goal is simple. Invent something that will be completely controlled and that would adhere to all the rules and regulations of the people in power to approve it. The twins are basically abandoning Bitcoin, because everything linked to Bitcoin is being denied. They invested a large amount of time and money into Bitcoin projects that are not bearing any fruit.

They are in this to make a large profit and everything they are doing for Bitcoin is being turned down by the puppet masters, so I can understand why they are trying something new to appease the gods of the financial system. Roll Eyes

I think they're trying to drive more liquidity to Gemini. Tether obviously has a big market share. If they can take a bite out of that, some of that liquidity should find its way back to Gemini's order books since it'll have the most liquid GUSD markets. I'm not sure how successful it'll be, since Gemini has pretty tough verification requirements vs. Bitfinex. But I'm really curious to see how this all turns out -- how much GUSD gets issued and what the secondary GUSD markets end up looking like.

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The goal is simple. Invent something that will be completely controlled and that would adhere to all the rules and regulations of the people in power to approve it. The twins are basically abandoning Bitcoin, because everything linked to Bitcoin is being denied. They invested a large amount of time and money into Bitcoin projects that are not bearing any fruit.

They are in this to make a large profit and everything they are doing for Bitcoin is being turned down by the puppet masters, so I can understand why they are trying something new to appease the gods of the financial system. Roll Eyes

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Quote from: Samarkand on September 10, 2018, 02:39:58 PM

Quote from: gentlemand on September 10, 2018, 09:01:51 AM

Running on ETH

I stopped reading right here Grin

It can also rise Ethereum. Speculators don't seem to care how useful the underlying network is. Just remember how bad was the spam and the fees on the Bitcoin network last December, and the price was growing and growing.

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Quote from: squatter on September 11, 2018, 12:31:18 AM

...
I'd much rather hold GUSD than USDT. The issue isn't about stablecoins; it's about the reliability of their issuers.
...

Additionally, the dollars that back the GUSD will be deposited in
a US bank. This is obviously a more reliable jurisdiction than wherever
Tether has working banking relationships (the last rumours were that they
were having bank accounts in Costa Rica).

Quote from: gentlemand on September 10, 2018, 09:58:04 PM

...
I suspect a 'legit' stablecoin will open up a whole new world of weirdness and dodginess and I don't really see how they can completely work their way around it.

Aren´t these stablecoins the perfect vehicle for capital flight? They are as viable
as any cryptocurrency for getting money out of a country without the volatility inherent
to cryptocurrencies.

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Quote from: 1Referee on September 10, 2018, 05:31:22 PM

Quote from: figmentofmyass on September 10, 2018, 04:25:51 PM

there are a couple potential positives though. so many exchanges hold lots of USDT---if anything ever happens to tether, we'll see huge losses across the ecosystem. i think it would be healthy to see that risk spread around to some other exchanges. the other thing is, i've never been able to register with gemini because of their ID requirements. it'd be funny if i could hold GUSD to ride out downtrends despite them refusing me as a customer.

I'm not sure if that's really a positive. You're basically infecting the market even further with something (stable coins) you don't want to see gain traction in this ecosystem.

Centralized exchanges are necessary at this stage, considering how thin the p2p market is. And people are going to use them regardless of what we want to see. It makes no difference whether those USD liabilities are represented as a balance in your Gemini account or as GUSD. They are exactly the same thing -- a deposit redeemable at Gemini.

The only new development here is that we have a new option besides USDT, issued by a much safer exchange. More options = better, and it can help people avoid KYC. I don't see how this could ever be construed as a bad thing, unless you really like Tether and want USDT to continue dominating.

Quote from: 1Referee on September 10, 2018, 05:31:22 PM

In the end, all stable coins have one thing in common, which is that they aren't actually pegged to the dollar. The only thing that makes these coins worth a dollar is that you can go to the issuer to sell them for $1 a pop. The stable coin itself nothing more than a regular token with a promise of the issuer tied to it. In other words, you'll be able to hold GUSD just like how you can hold USDT.

That's the point. Tether and Bitfinex are really shady. I think they're far more likely to have problems with regulators, law enforcement and banks than Gemini. I'd much rather hold GUSD than USDT. The issue isn't about stablecoins; it's about the reliability of their issuers.

Quote from: 1Referee on September 10, 2018, 05:31:22 PM

1 USDT is currently worth +$4 USD at WEX. Just shows you how worthless these pegs really are.

That's because WEX shut down BTC and USD withdrawals, as well as several others. Anyone who wants to exit WEX needs to pay a huge premium to get their money out. That's why the USDT premium exists there, because you can actually withdraw it. It's worth $1 everywhere else.

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Quote from: squatter on September 10, 2018, 03:34:41 PM

There's obviously going to be a secondary P2P market that avoids interfacing with AML/KYC. Since it's built on ETH, there's nothing anybody can do to stop that from happening, as Gemini will only have control over issuance and redemption. I'm curious to see how regulators deal with that, and I'm honestly a bit surprised to see this approved by NYDFS.

https://twitter.com/provoost/status/1039183325838098432

Relevant thread here.

I suspect a 'legit' stablecoin will open up a whole new world of weirdness and dodginess and I don't really see how they can completely work their way around it.

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Quote from: Samarkand on September 10, 2018, 02:39:58 PM

Quote from: gentlemand on September 10, 2018, 09:01:51 AM

...
Running on ETH
...

I stopped reading right here Grin

I´d take the project more seriously if they would have built it from scratch
or on a better platform. Ethereum has huge scaling issues and various other problems (e.g.
Casper keeps getting postponed, no coherent monetary policy...) and
is therefore a horrible platform for a stablecoin.

If the ETH blockchain gets congested due to an event like another CryptoKitties launch,
the stablecoin transactions would grind to a halt as well.

That is exactly my thought. I'm not amazed by ETH anymore and they just really exist for the sake of the ICOs. Thanks to them and now we have thousands of coins that are pure shitcoin. I feel that we needed to wait a decade to witness a real stablecoin that really works.

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Inflationary currencies aren't "stable".

Tokens based on the shitshow ETH are hardly "stable" either.

When ETH implodes -- and it will -- that experiment will end rather quickly, along with all the other shitcoins based on ERC20.

As for the fiat side, every government in the world is actively devaluing through debt issuance or outright Foreign Exchange policy - so that isn't going to help anyone either.

I think they sat around a conference table, saw that other shit-tokens like "Tether" were getting all the press, and they decided to get a piece of the pie.

Too late, its like launching a shopping website on the eve of the dot-com crash.

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Quote from: 1Referee on September 10, 2018, 05:31:22 PM

Quote from: figmentofmyass on September 10, 2018, 04:25:51 PM

there are a couple potential positives though. so many exchanges hold lots of USDT---if anything ever happens to tether, we'll see huge losses across the ecosystem. i think it would be healthy to see that risk spread around to some other exchanges. the other thing is, i've never been able to register with gemini because of their ID requirements. it'd be funny if i could hold GUSD to ride out downtrends despite them refusing me as a customer.

I'm not sure if that's really a positive. You're basically infecting the market even further with something (stable coins) you don't want to see gain traction in this ecosystem.

In the end, all stable coins have one thing in common, which is that they aren't actually pegged to the dollar. The only thing that makes these coins worth a dollar is that you can go to the issuer to sell them for $1 a pop. The stable coin itself nothing more than a regular token with a promise of the issuer tied to it. In other words, you'll be able to hold GUSD just like how you can hold USDT.

1 USDT is currently worth +$4 USD at WEX. Just shows you how worthless these pegs really are.

Not all Stable coins work like this. Some are trying to innovate by offering a system of weights. This turns out to be very risky and requires even more research and testing.

But if any of these projects succeed, it would mean that the anchoring could be in any other asset or something unique based only on balance.

I sincerely believe that a Stable coincides with some universal anchorage, based on a mathematical model, would be very useful.

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Quote from: figmentofmyass on September 10, 2018, 04:25:51 PM

there are a couple potential positives though. so many exchanges hold lots of USDT---if anything ever happens to tether, we'll see huge losses across the ecosystem. i think it would be healthy to see that risk spread around to some other exchanges. the other thing is, i've never been able to register with gemini because of their ID requirements. it'd be funny if i could hold GUSD to ride out downtrends despite them refusing me as a customer.

I'm not sure if that's really a positive. You're basically infecting the market even further with something (stable coins) you don't want to see gain traction in this ecosystem.

In the end, all stable coins have one thing in common, which is that they aren't actually pegged to the dollar. The only thing that makes these coins worth a dollar is that you can go to the issuer to sell them for $1 a pop. The stable coin itself nothing more than a regular token with a promise of the issuer tied to it. In other words, you'll be able to hold GUSD just like how you can hold USDT.

1 USDT is currently worth +$4 USD at WEX. Just shows you how worthless these pegs really are.

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Quote from: 1Referee on September 10, 2018, 03:44:00 PM

Soon every 'reputable' exchange will ditch its own crap token and replace it with their own 1:1 stable coin. Seriously, this whole crypto space is getting more ridiculous with the day.

It was already shit, but we have gone way beyond what Bitcoin was meant to tackle, and now suddenly we are welcoming all this centralized garbage? No thank you.

i suppose your gripe is with the centralized exchanges, then. Tongue

as i see it, we're stuck with them until DEX's become easy to use with good liquidity, and crypto becomes more prevalent (so exchange to fiat currencies becomes less necessary). so to me, these centralized stablecoins are just an extension of what we already have. no big deal.

there are a couple potential positives though. so many exchanges hold lots of USDT---if anything ever happens to tether, we'll see huge losses across the ecosystem. i think it would be healthy to see that risk spread around to some other exchanges. the other thing is, i've never been able to register with gemini because of their ID requirements. it'd be funny if i could hold GUSD to ride out downtrends despite them refusing me as a customer.

1Referee

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Quote from: vy99 on September 10, 2018, 03:51:12 PM

Quote from: 1Referee on September 10, 2018, 03:44:00 PM

and now suddenly we are welcoming all this centralized garbage? No thank you.

This is my biggest problem with altcoins. The ones that are decentralized I don't mind so much, but the centralized ones like XRP go against everything Bitcoin stands for. As far as I'm concerned you shouldn't be able to call yourself a cryptocurrency if you're centralized.

I haven't seen one single decentralized crypto currency or token other than Bitcoin.

I'm obviously biased towards Bitcoin, but let's be honest; every crypto or token has a face to it that is able to fork at any time of the day with minor agreement.

XRP is a security. Brad Garlinghouse doesn't yet realize that he's helping his own toy to become redundant within a couple of years. He's showing financial institutions how to become more efficient, and once the 'learning' process is over, financial institutions will fork his toy and use their own version to accomplish the exact same results, but without using anyone's external service.

Bitmain made the same mistake by signalling their own success medicine to the outside world. Nice domino show of failure.

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Quote from: 1Referee on September 10, 2018, 03:44:00 PM

and now suddenly we are welcoming all this centralized garbage? No thank you.

This is my biggest problem with altcoins. The ones that are decentralized I don't mind so much, but the centralized ones like XRP go against everything Bitcoin stands for. As far as I'm concerned you shouldn't be able to call yourself a cryptocurrency if you're centralized.

1Referee

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Soon every 'reputable' exchange will ditch its own crap token and replace it with their own 1:1 stable coin. Seriously, this whole crypto space is getting more ridiculous with the day.

It was already shit, but we have gone way beyond what Bitcoin was meant to tackle, and now suddenly we are welcoming all this centralized garbage? No thank you.

I am waiting for the McAfee dollar which is backed by coke leftovers inside his nose.

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Quote from: gentlemand on September 10, 2018, 03:21:10 PM

Quote from: jjacob on September 10, 2018, 03:14:16 PM

A true peg cannot really survive. The US government would classify you as a financial firm and insist that you fully follow Know Your Customer and Anti-Money Laundering laws. That would result in any cryptocurrency promoter shutting down.

They're nydfs approved and they're rolling. And you think somewhere like gemini isn't going to be fully compliant is every possible way? Of course they will.

There's obviously going to be a secondary P2P market that avoids interfacing with AML/KYC. Since it's built on ETH, there's nothing anybody can do to stop that from happening, as Gemini will only have control over issuance and redemption. I'm curious to see how regulators deal with that, and I'm honestly a bit surprised to see this approved by NYDFS.

Quote from: gentlemand on September 10, 2018, 03:21:10 PM

Dunno about their peg mechanisms though. They don't have an inspiring track record.

I'll feel a hell of a lot safer holding Gemini liabilities than Tether liabilities. Gemini is super compliance-oriented, licensed wherever necessary, and has the green light from a major regulator. That's a huge improvement. I would love to hedge with this on the P2P market and avoid KYC with exchanges.

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Quote from: jjacob on September 10, 2018, 03:14:16 PM

A true peg cannot really survive. The US government would classify you as a financial firm and insist that you fully follow Know Your Customer and Anti-Money Laundering laws. That would result in any cryptocurrency promoter shutting down.

They're nydfs approved and they're rolling. And you think somewhere like gemini isn't going to be fully compliant is every possible way? Of course they will.

Dunno about their peg mechanisms though. They don't have an inspiring track record.

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Quote from: gentlemand on September 10, 2018, 09:01:51 AM

https://www.cnbc.com/2018/09/10/winklevoss-firm-rolls-out-new-cryptocoin-pegged-to-us-dollar.html

Running on ETH, approved by the New York Department of Financial Services, is this a game changer or yet another near miss by the identical unfortunates?

Interesting that despite everything USDT is the one that continues to dominate. That TrueUSD thing doesn't seem to be doing much. I noticed Nubits has completely lost its peg.

A true peg cannot really survive. The US government would classify you as a financial firm and insist that you fully follow Know Your Customer and Anti-Money Laundering laws. That would result in any cryptocurrency promoter shutting down.

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Quote from: Samarkand on September 10, 2018, 02:39:58 PM

I stopped reading right here Grin

Yeah. I'm inclined to agree. I can't really take Eth seriously since it can be paralysed by cryptokitties or spammed by Eos or hard forked because someone decrees it and everyone else is too clueless to object.

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Quote from: gentlemand on September 10, 2018, 09:01:51 AM

...
Running on ETH
...

I stopped reading right here Grin

I´d take the project more seriously if they would have built it from scratch
or on a better platform. Ethereum has huge scaling issues and various other problems (e.g.
Casper keeps getting postponed, no coherent monetary policy...) and
is therefore a horrible platform for a stablecoin.

If the ETH blockchain gets congested due to an event like another CryptoKitties launch,
the stablecoin transactions would grind to a halt as well.

Quote from: squatter on September 10, 2018, 02:29:44 PM

...
The fundamental difference here is that neither USDT nor TrueUSD were ever reviewed or approved by a state regulator. And NYDFS is quite hard to please from what I hear.
...

I guess the Winklevii know the right people. They are probably members of the same country club
as a few high-ranking NYDFS officials and suddenly their stablecoin´s approval was a mere formality Grin

squatter

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Quote from: gentlemand on September 10, 2018, 09:01:51 AM

https://www.cnbc.com/2018/09/10/winklevoss-firm-rolls-out-new-cryptocoin-pegged-to-us-dollar.html

Running on ETH, approved by the New York Department of Financial Services, is this a game changer or yet another near miss by the identical unfortunates?

Interesting that despite everything USDT is the one that continues to dominate. That TrueUSD thing doesn't seem to be doing much. I noticed Nubits has completely lost its peg.

I never got the impression that TrueUSD was much different than USDT. Last I heard, it was secured by "smart contracts" that prevent "printing" of TrueUSD without backing -- not sure I buy that, as we're not privy to their trust account records.

And supposedly they're "in talks" with major accounting firms to provide audits. Where have I heard that before? Roll Eyes

The fundamental difference here is that neither USDT nor TrueUSD were ever reviewed or approved by a state regulator. And NYDFS is quite hard to please from what I hear. So, I think this might actually be a game changer, though I'm not sure how the AML/KYC angle will work out. It adds a whole new level of confidence to stablecoins, since the biggest fear with Tether is bank seizures by regulators. I would love to see Tether's market share drop. So much of the economy is exposed to Bitfinex/Tether counterparty risk.

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Quote from: gentlemand on September 10, 2018, 09:01:51 AM

is this a game changer or yet another near miss by the identical unfortunates?

It's neither for right now. I get why they're doing this (to encourage people using cryptocurrency for purchases) but until we know more about the actual functions and details behind it we can't know if this is a win or a loss.

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https://www.cnbc.com/2018/09/10/winklevoss-firm-rolls-out-new-cryptocoin-pegged-to-us-dollar.html

Running on ETH, approved by the New York Department of Financial Services, is this a game changer or yet another near miss by the identical unfortunates?

Interesting that despite everything USDT is the one that continues to dominate. That TrueUSD thing doesn't seem to be doing much. I noticed Nubits has completely lost its peg.

Topic: [2018-09-10] CNBC The Winklevii launch the Gemini Dollar stablecoin (Read 368 times)