On stablecoins - page 4. | Bitcointalksearch.org

o_e_l_e_o

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Quote from: deisik on December 29, 2018, 09:55:49 PM

That said, technically and from a legal point of view (well, at least as I see it) Bitfinex and Tether are not the same even if the same dudes are behind them.

I mean, yes, legally they are different companies, but they are different companies ran by the same people out of the same offices and are intrinsically linked. Any new Tether that is printed enters the market via Bitfinex, and any Tether that is removed is also done via Bitfinex. If it turns out Tether having been lying this whole time (which I think they are, why else would they consistently refuse an audit?) and are insolvent, then it's almost a given that Bitfinex is also insolvent. Your statement about a bank run is spot on, which would likely result in them ceasing withdrawals and many people losing their coins.

Given how uncertain the whole situation is, and given the plethora of alternative exchanges and stablecoins available, I just don't think it's worth the risk.

deisik

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Quote from: figmentofmyass on December 29, 2018, 08:28:30 PM

Quote from: o_e_l_e_o on December 28, 2018, 02:05:27 PM

Quote from: exstasie on December 27, 2018, 07:17:00 PM

It's the same risk as holding USD on any exchange, or in particular, an unlicensed one. Assets weren't backed on Gox either, or a host of other crypto exchanges from the past. That's why anyone planning to hold USD long term should definitely be wiring that cash out ASAP.

Not quite the same. With USD, although the exchange you are holding it on might not be solvent, you know that USD itself will always have value (provided the US government doesn't collapse or something equally catastrophic). If you are holding USDT, you run the same risk of the exchange not being solvent, but you also have the added risk of USDT itself not actually being backed up 1:1 by the same amount of USD as claimed. I USDT turns out to be worthless, than it doesn't make any difference whether the exchange you are holding your USDT on are solvent or not.

it depends where the USDT is held. you can hold USDT in an omni wallet (no exchange) but you are still trusting that tether is solvent. this is exactly the same as holding a USD balance on bitfinex and trusting that bitfinex is solvent. in both cases, you are trusting the issuer to redeem real USD

I see your point

I for one agree with it. That said, technically and from a legal point of view (well, at least as I see it) Bitfinex and Tether are not the same even if the same dudes are behind them. So it is possible that Tether goes to hell without affecting the exchange operations too much. Without doubt, there'll be a massive "bank-run" on the exchange itself if something bad happens to Tether (or there are just rumors), but it is not set in stone they will go underwater together

figmentofmyass

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Quote from: o_e_l_e_o on December 28, 2018, 02:05:27 PM

Quote from: exstasie on December 27, 2018, 07:17:00 PM

It's the same risk as holding USD on any exchange, or in particular, an unlicensed one. Assets weren't backed on Gox either, or a host of other crypto exchanges from the past. That's why anyone planning to hold USD long term should definitely be wiring that cash out ASAP.

Not quite the same. With USD, although the exchange you are holding it on might not be solvent, you know that USD itself will always have value (provided the US government doesn't collapse or something equally catastrophic). If you are holding USDT, you run the same risk of the exchange not being solvent, but you also have the added risk of USDT itself not actually being backed up 1:1 by the same amount of USD as claimed. I USDT turns out to be worthless, than it doesn't make any difference whether the exchange you are holding your USDT on are solvent or not.

it depends where the USDT is held. you can hold USDT in an omni wallet (no exchange) but you are still trusting that tether is solvent. this is exactly the same as holding a USD balance on bitfinex and trusting that bitfinex is solvent. in both cases, you are trusting the issuer to redeem real USD.

holding a stablecoin on an exchange does imply additional custodial risk. there may be legit risk trade-offs there though. for instance, i think the insolvency risk of holding USDC is minimal---their bank accounts are much safer than crypto wallets (re hacking) and they are super compliant with authorities so risk of seizure is low. i'd liken it to holding USD on coinbase or gemini. if you could then use USDC in liquid altcoin markets (eg on binance), that might be a worthy trade-off.

1Referee

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Quote from: exstasie on December 27, 2018, 07:17:00 PM

It's the same risk as holding USD on any exchange, or in particular, an unlicensed one. Assets weren't backed on Gox either, or a host of other crypto exchanges from the past. That's why anyone planning to hold USD long term should definitely be wiring that cash out ASAP.

The main risk is Tether and/or its bank accounts getting seized by authorities like the US government, just like what happened to BTC-e..

It's not the same risk as holding USD on whatever exchange, it's worse than that, and you just pointed the second reason why it's worse than simply having USD on an exchange. The first risk is the exchange itself going down (could be Binance, Bittrex, etc), and the second risk is that your USDT could potentially become worthless overnight. I wouldn't sleep well in any case.

I have to admit though, despite all the shit that USDT went through, it still works, has by far the most exposure throughout the market, and regained it's dollar peg.

deisik

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Quote from: BitHodler on December 28, 2018, 02:18:50 PM

Quote from: o_e_l_e_o on December 28, 2018, 02:05:27 PM

This is the most concerning thing. If they were backed 1:1 with USD as they claim, what do they have to lose by doing an audit? Literally nothing, and it would shut up all their critics for good. The only reason to refuse an audit is if they have something to hide. I have stayed well away from USDT for a long time, and there is no change I'm going back any time soon.

Obviously, they have something to hide. Don't forget that people who were affected by their 'hack' have been compensated in USDT, and that pretty quickly after the incident, which raises red flags too.

I'm not sure what you are referring to here

If you mean Bitfinex buying back their tokens after the hack, it happened a few months before USDT came about. The hack happened in August 2016, and if I'm not mistaken, they redeemed all their BFX tokens in January 2017 (maybe in February) while USDT appeared only in April 2017. So unless you actually mean something else, there is no direct connection between the "hack" (tokens redemption) and USDT

BitHodler

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Quote from: o_e_l_e_o on December 28, 2018, 02:05:27 PM

This is the most concerning thing. If they were backed 1:1 with USD as they claim, what do they have to lose by doing an audit? Literally nothing, and it would shut up all their critics for good. The only reason to refuse an audit is if they have something to hide. I have stayed well away from USDT for a long time, and there is no change I'm going back any time soon.

Obviously, they have something to hide. Don't forget that people who were affected by their 'hack' have been compensated in USDT, and that pretty quickly after the incident, which raises red flags too.

What I don't understand is how in a very short period of time they withdrew over 500 million USDT, and since then didn't print anything, while before they printed and withdrew hundreds of millions quite regularly.

With current prices it would make sense to see a bump in USDT circulation, but nothing thus far... Probably an indication that whatever they have in actual fiat holdings is close to what they have in circulating USDT?

o_e_l_e_o

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Quote from: exstasie on December 27, 2018, 07:17:00 PM

It's the same risk as holding USD on any exchange, or in particular, an unlicensed one. Assets weren't backed on Gox either, or a host of other crypto exchanges from the past. That's why anyone planning to hold USD long term should definitely be wiring that cash out ASAP.

Not quite the same. With USD, although the exchange you are holding it on might not be solvent, you know that USD itself will always have value (provided the US government doesn't collapse or something equally catastrophic). If you are holding USDT, you run the same risk of the exchange not being solvent, but you also have the added risk of USDT itself not actually being backed up 1:1 by the same amount of USD as claimed. I USDT turns out to be worthless, than it doesn't make any difference whether the exchange you are holding your USDT on are solvent or not.

Quote from: exstasie on December 27, 2018, 07:17:00 PM

Aside from that, there will never be any news confirming USDT isn't backed because there will never be an audit.

This is the most concerning thing. If they were backed 1:1 with USD as they claim, what do they have to lose by doing an audit? Literally nothing, and it would shut up all their critics for good. The only reason to refuse an audit is if they have something to hide. I have stayed well away from USDT for a long time, and there is no chance I'm going back any time soon.

automaticmoney

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2019 is the year of stable coin even a celebrity and financial institution and government and banks every one launching a stable coin so we can see stable coins bring investors to crypto market

setialovers

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If more stablecoin created, i am believe it just flooding more money to cryptomarket and its should be increasing crypto price. Maybe its good for crypto but there is should be audited by reputable auditor because if not audited, people can creating their own stablecoin withour propers responsibility

exstasie

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Quote from: 1Referee on December 19, 2018, 04:25:47 PM

Seriously, if you think there is potentially a chance that the tokens you hold might become worthless at any point if the news comes out that they aren't backed, how can you still cash out to USDT and wait for the price to have found a bottom? Roll Eyes

It's the same risk as holding USD on any exchange, or in particular, an unlicensed one. Assets weren't backed on Gox either, or a host of other crypto exchanges from the past. That's why anyone planning to hold USD long term should definitely be wiring that cash out ASAP.

The main risk is Tether and/or its bank accounts getting seized by authorities like the US government, just like what happened to BTC-e. Aside from that, there will never be any news confirming USDT isn't backed because there will never be an audit. There will only be FUD that causes USDT prices to temporarily spike below $1. It should stay pegged near $1 or otherwise fall near $0 (if shit hits the fan). Anything in between is just a temporary divergence.

I agree about USDC; seems much safer. But I'm sure its markets are way less liquid too. I'm sure that factors into peoples' decisions to hold USDT instead.

timerland

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Quote

If you don't know what stablecoins are, read this Wiki article

With that read, there is an ongoing dispute over the advantages of these coins before Bitcoin and other cryptocurrencies. Many suggest that they are not actually backed up by real currencies or other assets as the companies behind them vigorously claim, that they are centralized beyond any hope, and without proper audits they can be printed out of thin air just like fiat money, which would culminate in their hyperinflation, devaluation and failure

For simplicity's sake, let's assume that these accusations are unfounded. So do these coins have any advantages compared to Bitcoin under given assumptions? In these conditions stablecoins essentially become fiat that they are representing, i.e. the US dollar, Euro, or whatever. So the whole thing is not so much about some stablecoin versus Bitcoin but rather a good old question of a fiat currency versus a cryptocurrency

And I guess you already know the answer to that question

Stablecoins are essentially debt instruments that don't give any interest in return.

I wouldn't say that they are useless, they are quite useful as a tool of circumventing restriction to foreign exchange in certain countries with capital control, or to buy/sell cryptocurrencies with without having to go through all the verification needed to deal with actual fiat.

But as a store of value, they are garbage. Even though people may perceive fiat as a good store of value, in the long run, it will depreciate due to the fact that the currency supply is continuously increasing without limitations. And they are risky because you simply do not know if they are printing coins out of thin air, or if they are actually backing it up with reserves.

Shiversnow

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At this current situation of market many people and investors prefer to buy stable coins to avoid to lose huge amount of money and at the same you can earn money and more income. There is chance that stable coins will become trend than in other coins simply because of this bearish market.

1Referee

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Quote from: o_e_l_e_o on December 19, 2018, 10:29:02 AM

I understand your point, but if it eventually comes out that Tether is not backed up by fiat as they claim, the price will dump hard. If you happen to be holding any Tether at the time, you will lose out big time.

It's mind boggling how people don't care about the potential dangers around USDT, and that while most of them do acknowledge that it could just as easily be an unbacked stable coin. Seriously, if you think there is potentially a chance that the tokens you hold might become worthless at any point if the news comes out that they aren't backed, how can you still cash out to USDT and wait for the price to have found a bottom? Roll Eyes

I rather see the fiat value of my coins tank but have them safely stored offline than holding a shitty token that could become worthless overnight. If people are so desperate to 'protect' their fiat value during corrections and bear markets, at least use a stable coin with a reliable entity such as Coinbase/Circle backing it, and not a crook as Bitfinex.

Epimetheus

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Quote from: nl247 on December 19, 2018, 12:26:29 PM

There is obviously no doubt about it that stable coins are incomparable to bitcoin as they are not even cryptocurrency in the first place. So in a way, it is more like just trying to compare fiat and bitcoin as you have said or centralization and decentralization respectively. Left for me, I feel there is really no point having them in the first place, and somehow would be more detrimental in the long run but it is what it is.
The only advantage I see with them now is just the ability to hedge crypto funds, and is it not even a lot better and more relieving to do that with real fiat? Till now, I still try to want to wrap my head around their usefulness since exchanges could just list fiats instead with regulation.

If someone is preferring stable coins then he or she should continue using fiat currency only because there is not point using such a coin.It cannot be considered as a cryptocurrency also.I don't think that there is need of such coins in the market or they should be considered as fiat currency only.Stable coins can be under the control of the governments and therefore they cannot give any profits to its users.Cryptocurrencies are far more better and give good profit amounts.

nl247

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There is obviously no doubt about it that stable coins are incomparable to bitcoin as they are not even cryptocurrency in the first place. So in a way, it is more like just trying to compare fiat and bitcoin as you have said or centralization and decentralization respectively. Left for me, I feel there is really no point having them in the first place, and somehow would be more detrimental in the long run but it is what it is.
The only advantage I see with them now is just the ability to hedge crypto funds, and is it not even a lot better and more relieving to do that with real fiat? Till now, I still try to want to wrap my head around their usefulness since exchanges could just list fiats instead with regulation.

deisik

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Quote from: Greed Dev on December 19, 2018, 10:43:06 AM

I have no idea what your problem is

I humbly admit that neither have I

Care to explain why you feel like I'm having a problem at all? Anyway, as far as feelings are concerned, I can't grasp from where you got the idea that "stablecoin was born to make our market perfect". The term "perfect market" has a very particular meaning in the context of trading and investing (in case you didn't know), and it looks like it has nothing to do with stablecoins as such. Regardless, I don't quite see how they can make investors calm (as opposite to nervous). Care to show me through while we are at it?

Greed Dev

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I have no idea what your problem is. I have a personal opinion about stablecoin. I think stablecoin was born to make our market perfect. It will have many different stablecoins and our market will attract many investors because stablecoin will never make them nervous when the market drops.

o_e_l_e_o

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Quote from: BitHodler on December 19, 2018, 09:45:27 AM

Instead of embracing the revolution and go decentralized we are sucked into more of the same shit.

This happens in crypto too. Look at the top 10 coins at the moment. XRP and EOS are both completely centralized. Both Bitcoin Cash forks are pretty much cults of personality surrounding Ver and Wright. Tether is entirely run by one organization who refuse to even allow an independent audit to verify their claims that they are backed up 1:1 with fiat as they claim.

Quote from: Snaic on December 19, 2018, 12:36:34 AM

Therefore, I especially do not even care if they are supported by fiat or not.

I understand your point, but if it eventually comes out that Tether is not backed up by fiat as they claim, the price will dump hard. If you happen to be holding any Tether at the time, you will lose out big time.

BitHodler

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Quote from: haroldtee on December 19, 2018, 05:39:09 AM

I see them more as a problem than a solution, and the worst part of it is that, their relevance as against using fiat is something that is still questionable.

This problem (as you call it) is a glimpse of what people can expect the fiat system to turn into. It's just a matter of time before we aren't using fiat as we do it right now, but strictly use stablecoins or more precisely said, tokenized fiat.

What concerns me is that most people are likely to follow any path forward of the government as long as they keep the usability and convenience of fiat, but with a couple of more perks.

This isn't innovation, but purely a continuation of a system that has been in place for many decades. Instead of embracing the revolution and go decentralized we are sucked into more of the same shit.

Theb

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Quote from: TheReverend on December 16, 2018, 06:59:13 PM

i think top coin from 1 to 50 can be say stable coin, because price movement are slowly and also follow bitcoin price.
not like other coin,while btc is dumping they pump, but you can make great profit it you have a great timing to buy.

From what I am reading I am guessing that you really don't know what you are talking about stablecoins really don't follow the movement of Bitcoin or any other cryptocurrencies in the market as if they are they won't be called "stablecoins" to begin with. You won't really see any kind of price jumps greater than 5% as they only move around -/+ .01-.03 increments in a day or won't even move at all. Stablecoins are in fact not for your money if you are thinking that it will grow, people only buy it if they don't want to participate in the price action going on in the market.

Topic: On stablecoins - page 4. (Read 21468 times)