Trust is the biggest issue with cryptocurrency. I can trust my bank + the government to keep my money safe. As has been repeatedly demonstrated, I can’t trust an exchange and keeping your own wallet is extremely risky.
I can't trust the price of BTC to drop to $0 when speculators panic.
I can't trust that my BTC will be accepted if it was once tied to a money laundering (mixer) address.
I can't trust that I will not be rug pulled on any new coin unless I read the fine grained software contract, first.
I can't trust a software contract from being hacked unless I can hire a software contract expert to peruse it, and hope he's ethical, and won't exploit any holes in the contract for his own gain.
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Why not?
There are plenty of reputable stablecoins out there that prove their reserves either continuously on-chain or through regular financial audits.
Tether is the weakest actor? What reality are you living in? It has 90% of all stable coin trading volume.
I think it's silly to make arguments which are falsified by a simple google query.
Tether is one of the weakest stablecoins in terms of regulatory compliance and general community trust.
In other words, most arguments I hear against stablecoins apply narrowly and specifically to Tether, yet people tend to use those valid arguments against Tether to straw-man the entire asset class. Popularity and volume have nothing to do with that.
Pro crypto arguments these days have come down to basically "You're not allowed to make that argument. It's early days. There are no good critics..." and now "you can't conflate my argument."
You took down the Tether strawman, while pretending that you took down the entire concept of stablecoins.
This conversation is going way off track from your original claim that you don't trust stablecoins. Your perception of the community's perception of Tether is neither here nor there.
If there where better stable coins then presumably most people would use them, the simple fact that they aren’t is extremely damaging to any argument supporting the idea.
That's not true. Tradable instruments generally accrue network effects based on snowballing liquidity and trading pairs as a result of being first to market, not because of the instrument's superiority to another similar instrument. You can see this effect in the traditional markets with SPY and VOO. VOO is an all-around superior product (much lower expense ratio, better company structure), yet SPY has 20 times higher volume due to its liquidity, especially options liquidity. Likewise, USDC is an all-around superior product to USDT, yet USDT volume is much higher due to its liquidity, especially across smaller trading pairs.
I also want to point out that when you choose to measure by volume, you over-represent the people who trade through Tether rather than actually holding it for any length of time because they believe it's a sound holding. When you are actively speculating on moonshots like so much of this hyped up market is right now, USDT is the best stablecoin for you due to its high volume and liquidity, but when you're looking for a trustworthy stablecoin to hold onto long term, there are other stablecoins for that that have less volume.
Finally, it's surprising to me that you're now basing your argument on the premise that most cryptobros are rational, because that seems to run counter to everything you're trying to argue in this thread.
More importantly even with the first mover advantage SPY is only twice the size of VOO rather than 10x the size of all competitors combined.
We're really splitting hairs here. SPY and VOO don't have a "slightly different mix of stocks," they have an effectively identical mix of stocks. They use identical strategies to track an identical index.
The difference you're seeing likely comes down to the exchange traded product's discount/premium to NAV, or is the result of sheer chance due to slightly different timings of rebalancing, dividends, etc between the two issuers.
> More importantly even with the first mover advantage SPY is only twice the size of VOO rather than 10x the size of all competitors combined.
SPY is 20x the size of VOO by volume, which is the metric you're using to compare USDT to USDC. So by volume SPY is actually even more dominant over VOO than USDT is over USDC, not less.
All that said, even if what you were saying about SPY and VOO were true, I still disagree that it's logical to use an instrument's popularity as a proxy for its financial soundness.
No, it’s both a different list and slightly different weighting. VOO 510 companies https://stockanalysis.com/etf/voo/holdings/
SPY 507 companies https://stockanalysis.com/etf/spy/holdings/
As to trading volume, 10:1 is comparing every stable coin. There are far more than just 2 mutual funds loosely tracking the S&P 500.
Even if the fund held 510 companies, those last three companies would each represent 0.00% of the fund's holdings. We're literally arguing over a 0.00% difference between two funds.
I also think that the difference between a comparison to total market volume and a comparison to a second competitor is immaterial to this conversation. It doesn't really affect any conclusions about anything.
In conclusion, we're so far off-topic that it may be best to call this thread quits.
If a stable coin can be shady and still transact 90% of all stable coin market without any apparent consequences, then why should we trust any stable coin?
That logic is like saying 90% of torrent activity is related to piracy, therefore nobody has ever used the bittorrent protocol for any legitimate purpose. There is no logic in a statement like that.
Trusting a specific stable coin can be independent of all other stable coins.
While USDC does indeed look better, the management failure of holding corporate bonds in lieu of treasuries and dollars would have triggered an audit in a bank, and would have been big news.
https://www.bloomberg.com/news/features/2021-10-07/crypto-my...
https://markets.businessinsider.com/news/currencies/coinbase...
That's not true everywhere. I live in Argentina and people prefer to have dollars in cash in their houses rather than leaving them in a bank. A few years ago, in 2001, the government took the dollars from the banks and gave them pesos for a lower value. Most banks went broke and people lost their savings and the ones that didn't, gave pesos to people making them lose 75% of their savings. I know similar things happened in other countries too.
Crypto kind of solves that issue. I know some people who prefer to save in DAIs than keep dollars in the bank.
And regarding trusting a bank: In my country there was a bank with a $15B market cap that did not really posess the money they claimed they posses.
Now: "Tether printer go brrrr and we still shill crypto"
Trust them to keep your money – yes, you can absolutely rely on that.
Trust them to have “your” money back – that’s a taller order. But it it will be safe, sure.
At least with cryptocurrency you don’t have to keep it at an exchange, while the governments are pushing for abolishing cash and keeping all the money in banks.
We could make them one and the same thing with a stroke of legislative pen. Just because current laws do not manage X new thing correctly, we should not conclude X new thing is terrible.
The very same old scam banks have made in the '300 invented bank notes to be exchanged instead of gold...
And probably that is the real reason behind crypto: some Bug&Powerful in the IT decide that's about time to kick out banks substituting them with something that's the same but in other hands and safer for the real master, BTW It's not just me saying that but also the Geneva Report 2019 "Banking Disrupted?" [1]. Unfortunately I fear most will not understand in time and actual IT "pseudo-free but still some freedom is possible" will be long gone...
[1] https://voxeu.org/content/banking-disrupted-financial-interm...
perhaps to be skim-read together with more recent
https://asiatimes.com/2021/05/beijing-prods-millennials-to-d...
https://voxeu.org/article/digitalisation-and-future-banking
and countless others
Some blockchain protocols like Bitcoin make the silly argument that in order for a chain to be worthwhile, a full history of all transactions needs to be maximally available on the network.
Other chains either drop, or plan to drop data that's been on the network for over a year or so (EIP-4444, for Ethereum). This relies on the weak assumption that the consensus algorithm will not finalize invalid data and then continue to build on it for over a year.
When you take history expiry alongside state expiry, the technology is absolutely out there to bound blockchain size.
You don't need to rely on such a weak assumption.
You can use Incrementally Verifiable Computation to verify the entire blockchain history in constant time. See e.g. https://vitalik.ca/general/2021/11/05/halo.html
I think the ideal blockchain should offer constant time historical verification in addition to rather than as replacement of verifying the tx history. That also makes it robust against possible bugs in the design and implementation of the rather complex IVC technology.
Even if IVC is the only way to verify the full history, then it could still be limited to older history, e.g. up to a week or month ago. That would give you some time to investigate recent hiccups.
So when the next $625-million exploit happens [1] the hackers would just need to wait a year before any trace of them disappears? Awesome
I'm talking about the data availability requirement that the protocol imposes on nodes if they want to remain connected to the swarm. I'm not sure what you're talking about - data doesn't magically get deleted from the internet with "no trace".
This is what you said, emphasis mine: "Bitcoin make the silly argument that ... a full history of all transactions needs to be maximally available on the network. Other chains either drop, or plan to drop data that's been on the network for over a year or so".
I'm reading exactly what you wrote. I don't know, may be the meaning of words in crypto world is "wrong".
It's that spectrum between 0-of-N and consensus-enforced N-of-N that you don't seem to grasp.
I'll say it again, once a piece of data is no longer maintained by all N-of-N participants in a blockchain as a matter of its consensus protocol, that doesn't mean that the data gets automatically deleted from the internet and from everyone's hard drives. On the contrary, there are many reasons why particular actors would want to retain that data, one of which is the very thing we are discussing - to keep a transaction history in case old transactions need to be audited for potential criminal prosecution of $625-million exploits.
> Other chains either drop, or plan to drop data that's been on the network for over a year or so
Yes, the chains, i.e. the actors that are keeping the minimal amount of data to continue to participate in the protocol, drop that data. That doesn't mean the data disappears from the internet. Instead, data availability is likely to remain incentivized within dedicated sub-protocols. That's not to mention the numerous private entities that will have their own external incentives to retain that data. Quote from Vitalik:
> Older blocks, transactions and receipts/logs would still be accessible through dedicated sub-protocols (eg. the Portal Network) or externally developed protocols (eg. TheGraph), in addition to a much smaller but still sufficient number of volunteer nodes and block explorers. Note that many dapps are already moving their historical data queries to TheGraph and similar protocols for efficiency.
> https://www.reddit.com/r/ethereum/comments/qzvsfq/impromptu_...
> data availability is likely to remain incentivized within dedicated sub-protocols
> private entities that will have their own external incentives to retain that data
A lot of wishful thinking which is presented as fact. Someone somewhere might still retain all that data because someone somewhere might have some incentives, and hopefully someone might still retain that data.
Whereas the reality is this: history will be purged. There are zero guarantees for availability of any historical data after the purge.
Additionally, the linked reddit thread is hilarious. "State expiry is so important for decentralisation, so we're proposing a solution where actual history and state is stored on a few centralised nodes, maybe". And there are literally no answers to the question "what happens to historical data" except "well maybe there will be altruism and maybe there will be incentives to store data in some protocols, oh and this centralised service infura surely will want to store the data, trust us it will never disappear".
Yeah, right.
If you really care that much for some reason, store it too. Law enforcement will.
Literally in my first comment that you keep responding to with handwavy things like "surely someone somewhere will store it perhaps maybe we don't know but you just have to believe"
I'm blindly guessing. You didn't actually say in your first comment why you care about having a copy of all historical data. Unless you're implying that in over a year you may need that data to personally mete out vigilante justice to the Axie hacker or something.
BTC forked shifting much of the value of BTC onto another blockchain. If it happens again, you have to remain vigilant to recoup your value.