Stable coins claim that they are backed 1:1 with their corresponding fiat currency, so when they mint new coins, this should mean that they have locked in the same amount of fiat money. But this is done in a centralized manner, we can't verify that they indeed hold that amount of fiat currency or that they won't break the rules at any given time.
To me stable coins look like fiat squared - fiat has value for as long as the government is willing and capable to support it, and stable coins are exactly the same, but they also depend on fiat.
Topic: Is empty wealth being created through stable coins? - page 2. (Read 403 times)
I remember that there was some serious discussion about Bitfinex and its post hack debt. The main point basically was that they created USDT out of thin air to compensate people for the coins they lost as result of their "hack".
If you think back, it's very suspicious how Bitfinex managed to buy out all of its debt that quickly, especially with how large the amount was. Back then they weren't the money making machine they are right now.
I know it's all speculation and there is no evidence to back it up, but you have to admit that it stinks. If they keep refusing balance audits they will keep stinking, its that simple. I will never use that exchange. Better safe than sorry.
If you think back, it's very suspicious how Bitfinex managed to buy out all of its debt that quickly, especially with how large the amount was. Back then they weren't the money making machine they are right now.
I know it's all speculation and there is no evidence to back it up, but you have to admit that it stinks. If they keep refusing balance audits they will keep stinking, its that simple. I will never use that exchange. Better safe than sorry.
Sounds shady AF, that's why I'm bullish on Haven Protocol ($XHV). It's going to get rid of all these bullshit stable coin scams. Watch out Tether.
Thanks for revealing this. Although I don't know the true purpose of above mentioned transaction, it looks shady at first sight. Does anyone here have a better understanding of the 'minting' in stable coins?
I thought it was a money-printing action but I think the money-maker got money from someone. This is a fraud. If this continues, our market is in serious trouble.
Seems like a major cog in a 'tangible asset drainage system'
In my opinion, stable coins are one of the most dangerous and shady assets that you can put your wealth in.
Firstly, stable coins represent fiat currency which is in itself something that has been historically depreciative.
Secondly, stable coins are not even actual fiat currency. There is no way the majority of the time for the investor to be 100% sure that the company issuing stable coins have completely full reserve all the time. And even if they can, there is no way of guaranteeing that the company will be willing to redeem their stable coins for fiat on demand.
So you're absolutely right. In certain instances of fractional reserve being used in stable coin issuance, which I believe is extremely probable for the majority of centralized stable coins, it is essentially no different than printing money out of thin air. It's only because stable coins are perceived to be backed fully and redeemable at all times does it have any value. But in reality, it's probably nothing like that.
Firstly, stable coins represent fiat currency which is in itself something that has been historically depreciative.
Secondly, stable coins are not even actual fiat currency. There is no way the majority of the time for the investor to be 100% sure that the company issuing stable coins have completely full reserve all the time. And even if they can, there is no way of guaranteeing that the company will be willing to redeem their stable coins for fiat on demand.
So you're absolutely right. In certain instances of fractional reserve being used in stable coin issuance, which I believe is extremely probable for the majority of centralized stable coins, it is essentially no different than printing money out of thin air. It's only because stable coins are perceived to be backed fully and redeemable at all times does it have any value. But in reality, it's probably nothing like that.
I think that the developers need to introduce tougher rules. That's not supposed to happen. I equate such actions as fraud on the part of the platform ERC-20 and coins that are printed without stopping !
has anyone noticed the 'minting' going on at these new stable coin developments?
I know this is kinda off topic but, when you check out these new 'outfits' some of the weblinks arent working and it all seems a bit iffy for a multi million / billion dollar operation (i'd say).
a transaction here: https://etherscan.io/tx/0x1b5150c6f8d9f2977b69c5898f62d11bd387985c089a39b36b02fc1398094711
is reference to a 4mil dollar 'creation' for wallett / address 0x00000000000
Wth is this?? Buying coins isnt smart, creating your own overnight bump coin and swapping it for BTC and ETH etc, creating fake wealth is where it must be at. Can i print Mickey Mouse Dollars and swap them for your BTC? It reminds me of that episode of Bottom where Ediie prints counterfeit notes with a face value of £12.45 (incl. a pic of queen with skirt over her head if i remember right heh)
What do you guys think of this?
Sincerly,
Crypto Amateur
I know this is kinda off topic but, when you check out these new 'outfits' some of the weblinks arent working and it all seems a bit iffy for a multi million / billion dollar operation (i'd say).
a transaction here: https://etherscan.io/tx/0x1b5150c6f8d9f2977b69c5898f62d11bd387985c089a39b36b02fc1398094711
is reference to a 4mil dollar 'creation' for wallett / address 0x00000000000
Wth is this?? Buying coins isnt smart, creating your own overnight bump coin and swapping it for BTC and ETH etc, creating fake wealth is where it must be at. Can i print Mickey Mouse Dollars and swap them for your BTC? It reminds me of that episode of Bottom where Ediie prints counterfeit notes with a face value of £12.45 (incl. a pic of queen with skirt over her head if i remember right heh)
What do you guys think of this?
Sincerly,
Crypto Amateur
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