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Comment by jqpabc123

4 months ago

How it it different from what banks do? (Except for a central regulator.)

Your exception is the answer.

Only the central regulator can "mint" money and doing so has real world consequences. The central regulator has financial incentives to limit this sort of activity.

The bizarro world of crypto has no such regulation and as a result, it is inherently unstable.

The proof of this is right in front of you --- it is the fact that "stable coins" exist. The only way to bring stability to the bizarro world of crypto is by tying it to "fiat" --- which is the very thing crypto is supposedly working to eliminate.

Contradict and hypocrite much?

17 comments

jqpabc123

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owlninja  4 months ago

I saw a quote somewhere:

>Crypto is speedrunning the entire evolution of finance to end up at the same place

  • jqpabc123  4 months ago

    I saw a quote somewhere:

        Those who don't learn from history are doomed to repeat it.

    The only thing new about crypto is paper has been replaced by electrons.

    Individuals/banks minting their own money has been tried before. It didn't go well.

    • philipov  4 months ago

      However, this quote is usually intended to be a warning, not an opportunity to run all the old scams again.

      These people hear it and think "You mean we get to repeat history?!"

      1 reply →

  • desumeku  4 months ago

    I sure hope we don't end up in the same place where the monetary system is only being held up by the fact that there is more debt than money creating an endless competition for the limited quantity of money that exists in order to pay off ever-increasing debts and expenses with a currency that is continually debased throughout the process.

    • DrillShopper  4 months ago

      We're already there. That's called "going to the moon". That's the end state. Get in, ride the rise, and then sell out and tell others to "buy the dip".

    • pclmulqdq  4 months ago

      We crossed that point years ago. It's the stablecoins that hold all the debt and use it to back their "dollars."

desumeku  4 months ago

They are being loaned ETH to cover withdrawals and prevent what would amount to a bank run, not stablecoins. This entire comment chain is stupid and pointless.

killerstorm  4 months ago

False. Money on your bank account is backed by bank's assets, not by the central regulator. Recommended reading: https://en.wikipedia.org/wiki/Fractional-reserve_banking , M1 money supply, etc.

> The only way to bring stability to the bizarro world of crypto is by tying it to "fiat"

False. It's possible to make stable-coins using just price oracle and collateral. "Fiat" is not necessary. E.g. https://www.liquity.org/bold

  • bryant  4 months ago

    > False. Money on your bank account is backed by bank's assets, not by the central regulator. Recommended reading: https://en.wikipedia.org/wiki/Fractional-reserve_banking , M1 money supply, etc.

    You didn't even finish reading the first paragraph.

    > Bank reserves are held as cash in the bank or as balances in the bank's account at the central bank

    The collapse of svb shows how much the central regulator cares about making sure the entire banking system doesn't fall apart, too.

    With the way you remarked "false" at the OP, though, I don't expect you're here for an engaging and educational discussion, so I'll leave it here. lol

  • jqpabc123  4 months ago

    It's possible to make stable-coins using just price oracle and collateral.

    Most attempts at "algorithmic" stable coins have failed. See TerraDollar, Luna and Titan.