Comment by rich_sasha
6 hours ago
So USDT is a great amazing decentralized censorship-free drop in replacement to USD except:
- much more awkward to use
- more liable to hacks
- deposits are not insured
- fewer legal protections
- doesn’t pay interest (or not easily anyway)
- and as I find out, bannable by a central institution with lower legal oversight than the Fed
I’ll keep a mental note of this.
I have said this many times, and will probably have to say it many more: Stablecoins are nothing but a face-saving measure for the US government.
It is politically impossible to go back on KYC/AML measures in the traditional financial system, even if some of them were perhaps a bit too ill-advised. It's much easier to say "this is shiny new tech, very different from that old tech over there; we support innovation so we won't impose KYC requirements on it", even if there's no logical reason to do that.
As it stands, stablecoins let you make a keypair in the privacy of your own home (or your own agent sandbox, as it were) and immediately start transacting. They're allowed-by-default instead of blocked-by-default, with the US government still able to block you if they have a specific reason. No traditional bank I know of, in any country, works like this. This is a valuable capability to have, technologically, even if there's no technical reason why a Postgres database and a REST API couldn't provide the same service, but faster and more easily.
> It is politically impossible to go back on KYC/AML measures in the traditional financial system
It’s politically irrelevant more than impossible. Most Americans simple aren’t visibly encumbered by KYC/AML enough to make it a priority.
> They're allowed-by-default instead of blocked-by-default
So were banks in the wildcat era.
Suddenly, physical Gold in a safe at home looks fairly decentralized and censorship-proof
Until someone robs you. I've seen teams of burglars target asian households around weddings, because they know that all the family gold will be in the house. Fastest way to lose 100k.
i'll have to recommend "practical doomsday" here - https://lcamtuf.coredump.cx/prep/ (edit: because it spends a lot of time on the topic on how to secure your wealth). or ask lcamtuf himself.
Gold is down YoY. I prefer banks and stocks.
Until you need to move or share it. That's why monero XMR is the only serious fungible and decentralized cryptocurrency
I don't doubt what you're saying. But as someone who is really not buying into cryptocurrencies, this is exactly what someone who holds a big amount of some obscure cryptocurrency would say.
I've heard good things about monero from a friend. This is not an attack on monero, rather a reflection on the general tone of the message.
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Not sure about this, isn't it hard to convert to fiat currency for real-world spending? Since it is often used for illegal activities, Coinbase (and I guess other big exchanges as well) don't trade it.
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It's a store of value, rather than a medium for transaction. If you want to move or share it, you pick it up and move or share it mostly...
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Unless you are moving more than about 1 million dollars in gold, it's actually quite easy to move it.
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Not sure why this is getting downvoted.
One of the only surviving darknet markets only takes Monero as currency.
Make of that information what you will
That technically true for any coin where miners are organized enough, see the ethereum fork where bad contract made wrong people lose money so they forked entire chain to get the money back
Look into the history of USDT. It's creation was dodgy to say the least.
Over time I believe it's founders did start backing it with Treasuries so now it must turn a nice profit for them.
You missed out that it is run by crooks closely associated with SBF and shady banks like Deltec
https://dailycoin.com/sbf-tether-deltec-secretly-colluding/
Also, it's not decentralised, they just unilaterally froze 2 billion in funds.
USDT is created by a super shady company and is not at all decentralized or censorship-free. You could have made the argument for Bitcoin (and still can to a certain level) but most cryptos that propped up after that or stablecoins do not follow the hacker philosophy and more the banker one. Ironic that the whole crypto movement got co-opted by the likes of JPM which it seeked to replace.
Recently I tried to donate to a project using their preferred crypto payment processor flow, which purported to support "Coinbase Wallet" integration. So thinking that was just like, Coinbase, I said "sure why not" thinking it'd save me the effort of copy/pasting long strings back and forth.
Turns out, Coinbase "Wallet" is a completely separate thing from Coinbase, and long story short, ultimately ended up accidentally converting some spare ETH I transfered into some kind of garbage Binance "wrapped" Litecoin. Which had zero indication/warnings in the app other than a like 4 pixel Binance logo superimposed on the 16 pixel Litecoin logo that it wasn't the real thing.
Once I gave up on this Wallet experiment I ended up needing Gemini to walk me through all the Binance "gas" nonsense to finally manage to swap into a real coin I could transfer out (like 80% of what I started with after subtracting gas fees and miscellaneous leftover change I was stuck with). And while transferring I had to avoid like a dozen alternative networks consisting of seemingly random strings and a scary red banner saying "yo don't fuck this up".
My first red flag should have been that Coinbase Wallet's Play Store name literally advertised betting on prediction apps. Second red flag was while looking for "Litecoin" in the list of coins, there were literally about 5000 different spam/meme coins with dozens of near identical clones that were all name squatting on top of each other.
As someone who came of age in the Crypto 1.0 "Bitcoin is for buying drugs" era the entire exercise was utterly baffling and somehow significantly less usable than crypto was a decade ago for actual payments. I guess for a young person looking to illegally gamble their paychecks at some unlicensed offshore prediction market it provides some utility I'm missing but man, the experience just made the post-Web 3.0 crypto scene look .... grim.
Normally they publish the wallet id, then you send money there using any method you want. What Gemini would do in your place?
> bannable by a central institution with lower legal oversight than the Fed
It’s way easier to take a company to court than any government entity.
But the company can just turn around and say, soz we don’t have your deposit. We invested it in Labubu dolls and they crashed in values. Also we lost them. Next time, DYOR.
If a bank collapses, you get your money back from the Fed, no questions asked.
You get up to the amounts insured by the FDIC, plus whatever is recoverable from the residual assets of the bank and anything else the FDIC decides to award.
> great amazing decentralized censorship-free drop in replacement
It's not and never supposed to be and everybody who uses it in any significant amount knows that. Don't mistake a cryptotoken with a cryptocurrency.
I love monero but then you have the problem that very few exchanges support it and if you need to convert big amounts of it in common currency it gets quite hard to do compared to eth/btc
Well, nobody said that the true anarchy would be easy. No government actually wants to approve the original spirit of crypto, everything they allow is either a toy or a scam they can take advantage of.
Then people get into shitty casino tokens that are widely available because the state doesn't care about a little gambling and got surprised that they are in the casino in the first place.
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if its bannable by a centralized place please explain how it is decentral? i thought that was the kind of controls a decentral system was specifically designed against. is that understanding of mine flawed?
Your thinking is not flawed. It's just not decentralized.
Decentralized cryptocurrency is an ideal from early 2008's from the Bitcoin supporters. It's not the reality of cryptocurrency in general.
Cryptocurrencies are full of contraditory ideas between the founding ideology and the actual usage.
It might be decentralized in terms of infrastructure, but the more precise property is that it is permissioned. Permissionless stablecoin exist - see DAI, etc, but USDT is absolutely not one of them. It is the worst parts of cash and the worst parts of crypto put together into one unholy pile of suck.
Tether isn’t decentralized or censorship free in any way
No one ever said USDT was decentralized.
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Tether's entire business model, providing an almost-unregulated USD cryptocurrency, relies on them not arbitrarily banning people. They don't do it frequently or without thought. You're far less likely to get banned from USDT than just about any non-cryptocurrency financial institution.
> Tether's entire business model, providing an almost-unregulated USD cryptocurrency, relies on them not arbitrarily banning people
No, their entire business model relies on bank/CC providers don't ban them. Somehow, they treat all crypto related transactions as iffy but USDT, bought to buy crypto, got under much less scrutiny. The entire problem their solver was that new users couldn't move cash to exchanges fast enough to join bull runs.
You can say the same for many other industries:
> almost-unregulated except when the authority say no.
Yeah, until Trump (or whoever is president at the time) tells them to.
What will they do when the alternative is broken bones?