Is empty wealth being created through stable coins?

guoyu78

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Quote from: fasdorcas on November 21, 2018, 06:19:14 AM

Quote from: Vektrum on November 18, 2018, 10:54:25 AM

Quote from: hatshepsut93 on November 18, 2018, 01:23:53 AM

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.

By itself, the idea of creating stable coins is very good and I believe that they perform useful functions when working with cryptocurrency. We can’t say whether they are validated with ordinary currency, digital copies of which are and cannot be verified. Well, not everyone is suspected of fraud. While I am very pleased with the appearance of stable coins.

The basic function is when it comes to hedging your assets in fiat during crazy downtrends like what we are seeing now in the space, but majorly, what is most important is how these stable coins get to do this. For now, we are beginning to see a lot of them popping up gradually, so in a way I just want to imagine if this is just another level of scam following what has been going on with Tether over the years? Printing money out of the blue, and then listing on an exchange and before you know, they exit the space eventually. I cannot say for the ones that claim they have a full fiat backing and they will be transparent enough to allow auditing. However, it all is, I simply just see stable coins, at least the legit ones for now as necessary evils.

I do have a problem with stable coins. They are just empty sacks of nothing and they created this huge hype for bitcoin by just putting money into the market. I don't care if they are backed 1:1 in fiat currency (which I do not believe at all) but even with that in mind they used it for themselves and bought as much bitcoin as they can afford by putting the tether out in the market and that created a bubble for bitcoin that took the price from lower ends to 20 thousand dollars and as soon as their buy orders dried up and stopped the price went down like crazy causing a lot of people to back away from crypto investment. If they didn't do that we wouldn't had the 2017 price soar which is a shame but we also wouldn't had this year long crisis in our hands neither.

Netnox

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You can't call it fake money or empty wealth. Because most of these stable coins are backed up by real assets. In the case of Tether (USDT), it is backed up by US Dollars held up in bank accounts (although the audits are still ongoing).

Burogh

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Before creating or minting a new stable coin, developers should have dollar to back up the coin. It will avoiding from creating stable coin from thin air and i think its good for market if more stable coin created because more money come to market

wxa7115

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Quote from: timerland on November 15, 2018, 05:08:54 PM

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.

This is a big problem with those coins, instead of trusting the government and their fiat now you are trusting a third party company that is holding enough currency in reserve for each unit of their cryptocurrency they print, so now you are in an even worse position than those that are only holding fiat because now you need to trust not only the government but also the people behind that coin, I know that those that created those coins are trying to give investors an easy way to transfer their cryptocurrencies to an asset similar to fiat.

But they are creating just another liability and a false sense of security among people, so for those that want to get out of the market for some reason make sure you get fiat and not one of those coins.

jacafbiz

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I have no issue with Stablecoins if the team can proof indeed they are backed with real USD or Fiat it is backed. We truly need them, because people don't need to be jumping in and out of the market from Crypto to Fiat every time there is a market movement. I believe Tether situation this year is even one of the things responsible to the bear market. If it is done right good luck to everyone

Ozero

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I still have a positive attitude to stable coins, because they really facilitate the work with cryptocurrency. You can doubt everything, you can say that the whole cryptocurrency is absolutely empty and unsupported digital money. And it will also not be very far from the truth. Therefore, while there is an opportunity, you need to use a cryptocurrency, while not forgetting about the moderate risks that it has.

Menawi12

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I think stable coin like USDT created back up by US Dollar in the bank. They can not print or mint stable coin without guarantee on banks deposit because its againts with the rules.

BoitCoinZen

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Quote from: Pikachu12 on November 17, 2018, 10:26:40 AM

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.

There are so many contrasting and contradictory views about the artificial growth and the troubled economy. Others argue that it is nothing but a scam and others call it a blessing for it has the capability to replicate the wealth.

fasdorcas

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Quote from: Vektrum on November 18, 2018, 10:54:25 AM

Quote from: hatshepsut93 on November 18, 2018, 01:23:53 AM

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.

By itself, the idea of creating stable coins is very good and I believe that they perform useful functions when working with cryptocurrency. We can’t say whether they are validated with ordinary currency, digital copies of which are and cannot be verified. Well, not everyone is suspected of fraud. While I am very pleased with the appearance of stable coins.

The basic function is when it comes to hedging your assets in fiat during crazy downtrends like what we are seeing now in the space, but majorly, what is most important is how these stable coins get to do this. For now, we are beginning to see a lot of them popping up gradually, so in a way I just want to imagine if this is just another level of scam following what has been going on with Tether over the years? Printing money out of the blue, and then listing on an exchange and before you know, they exit the space eventually. I cannot say for the ones that claim they have a full fiat backing and they will be transparent enough to allow auditing. However, it all is, I simply just see stable coins, at least the legit ones for now as necessary evils.

kryptqnick

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Quote from: davis196 on November 18, 2018, 02:27:36 AM

Stable coins kinda remind me of fiat currencies back in the time,when they were backed by gold. Grin

I guess that the time of speculative pump&dump altcoins is over,and the "stable" coins are the new big scamming scheme to get money out of the ignorant crypto noobs.

There is a similarity, but it's even worth than that with stable coins. Backing up fiat by gold was actually not such a bad idea, because gold was an undoubtably valuable asset which allowed to avoid devaluation of money. I guess it was also fair that countries weren't allowed to just print whatever amount of money they wished, because with fiat you can never be sure when it gets busted, so to speak, and your money becomes worthless.
Backing us a coin by something that is also potentially worthless is just weird. I get it that people like how useful it is to sort of freeze investments by putting them into stable coins for the bullish market or to use them in trading pairs, but I think it's a risky idea.

BrewMaster

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There is trouble abrewing

they have been creating "fake money" out of thin air for years and it is not just stable coins. it is basically any new altcoin and tokens that have been created in the past 10 years without adding anything to the ecosystem.

do you think any of the ICO tokens were really needed to be created? how about the 5000-7000 different altcoins that have been created in the past years?
there is no reason for more than 90% of them to even exist but they were created and created wealth out of thin air.

yusupjatigumilar

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not adakoin has a stable price, because one thing that makes many people interested in investing in crypto currency is because of its aggressive price movements so that people can get big profits in a short time, and even then if they can take advantage of the opportunities well maximum

1Referee

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Quote from: ralle14 on November 19, 2018, 01:26:52 PM

Stable coins to me are like gift cards there's no max supply, they're only useful in a single place and their real value isn't 1:1 because once there's too much circulating supply traders can start dumping their stable coins for less.

Stablecoins are useful on most exchanges, just not convertable to fiat on most exchanges. The latter part of your post does however apply to USDT, and perfectly so. Tether in a short period of time took like 700-800 million USDT out of circulation in an attempt to stabilize its price. No way these tokens were backed.

Looking back now, Tether taking that many tokens out of circulation should have been an initial warning for the price to go down. Even if these tokens weren't actually backed, it still means that a significant amount of money left the market. If you take into consideration that there was more supply than demand even with the tokens in circulation, it's easy to figure out what happens when these tokens aren't in the market anymore. Talking after the price has gone down is always easy, I know.

ralle14

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Quote from: kzozenberg on November 15, 2018, 04:25:38 PM

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 !

Nah they won't do it. As long as they're making money through these stable coins they will always produce more.

Quote from: MrMoores on November 15, 2018, 02:48:26 PM

What do you guys think of this?

Stable coins to me are like gift cards there's no max supply, they're only useful in a single place and their real value isn't 1:1 because once there's too much circulating supply traders can start dumping their stable coins for less.

figmentofmyass

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Quote from: hatshepsut93 on November 18, 2018, 01:23:53 AM

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.

they're essentially the 2.0 version of bank-issued notes. it's a lot like the wild west in the 1800s, before banks were federally chartered. shady banks used to issue poorly backed notes back then just like they do now.

Quote from: MrMoores on November 15, 2018, 02:48:26 PM

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)

all we can do is guess when it comes to whether tether et al are just printing money. we're never gonna get an audit---tether has said so (which doesn't exactly bode well for their solvency).

bitfinex, being the only place that redeems USDT, also drastically raised their withdrawal fees to 3% if you withdraw > twice or > $1M per month. sounds like they're trying to discourage withdrawal requests...... Lips sealed

wuvdoll

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Finally people are figuring out that all those tether and similar stuff are all bull shit.

It has no value and it makes no sense at all, if you really wish to have a dollar go get the real one not some token that represents it. There is no point of getting tether or usdc or whatever, they are all worthless and make no sense at all. I would like to also point out that all these exchanges that list these types of coins have something they profit from it.

The biggest privilege is that they can list tether or similar stuff that belongs to someone else and provide people with dollar option without caring about KYC or anything else and not even have bank accounts. Providing the dollar option without any bank interference is the best they get out of this. Not to mention the millions of dollars they profit from fee's.

Vektrum

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Quote from: hatshepsut93 on November 18, 2018, 01:23:53 AM

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.

By itself, the idea of creating stable coins is very good and I believe that they perform useful functions when working with cryptocurrency. We can’t say whether they are validated with ordinary currency, digital copies of which are and cannot be verified. Well, not everyone is suspected of fraud. While I am very pleased with the appearance of stable coins.

magneto

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Quote from: MrMoores on November 15, 2018, 02:48:26 PM

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

What these stablecoins really are aren't cryptos at all, in my opinion.

All they are are IOUs issued by a certain company or organisation saying that we promise to pay you x amount of fiat on demand, which firstly is just completely unprofitable for users since they don't get any interest in storing their funds in fiat that they would usually get in banks.

But the more important aspect to this means that it gives the central entity which is issuing these stablecoins/tokens a chance to abuse their power and issue more IOUs than there is dollars backing it. Sure, it could work in the short term when everyone has faith in the asset, but in the long run there are bound to be issues with this sort of reserve system, and there is no way for investors to see if the IOUs they hold is fully backed. It is possible that some if not most entities that issue these assets are doing this, but there is no way of verifying.

PsylockReborn

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Even with the new system of technology which is a decentralized one, we are still being haunted by the corrupt system of centralization and its slowly taking over and influencing big companies in crypto space.
It's how they'll gonna make people believe that for every stable coin its been backed up by fiat. The real deal is to how to sell to people that idea and how many would bite that scheme.
Lucky are those who have much knowledge about the technology for they won't fall for those schemes legitimate or not.

davis196

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Stable coins kinda remind me of fiat currencies back in the time,when they were backed by gold. Grin

I guess that the time of speculative pump&dump altcoins is over,and the "stable" coins are the new big scamming scheme to get money out of the ignorant crypto noobs.

hatshepsut93

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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.

BitHodler

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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.

cryptodv

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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.

damberg

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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?

Pikachu12

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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.

MrMoores

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Seems like a major cog in a 'tangible asset drainage system'

timerland

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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.

kzozenberg

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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 !

MrMoores

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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

Topic: Is empty wealth being created through stable coins? (Read 394 times)