Interesting choice of friends. All bitcoin (and crypto) is a zero sum game. I don't see the value outside of the sunk cost the energy on mining.
Due to the subjectivity of this statement, there is little-to-no area for debate.
It is of my belief that the limits of programmable money should be probed, tested, & examined: Currently, the traditional banking infrastructure does not allow for such automation, and the attempts to do so are unfortunately dependent on banks that have the ability to censor transactions if coerced to do so, whether via national security concerns, politics, mob rule, etc.
This is especially concerning to me as there's a non-zero chance that my government will block my financial transactions simply because of my beliefs & lifestyle (G in anti-LGBTQ+ country). This consequently leads to the next sentence:
> All of the place you listed need better governance more than anything else.
That statement is predicated upon the following axioms:
1) There is a person / a group of people close enough to the governance tools that can both (a) enact the necessary changes & (b) defend said tools from manipulation/corruption
2) That the "change-enactors" can competently use said tools without adverse effects
3) (potential subset of 1(b)) That said enactors will not use said tools on scapegoats/critics/political targets
4) (potential subset of 1(b)) The enactors can be trusted to use said tools
5) There's a system in place to combat misuse of said tools, & that can be deployed in a timely manner
6) (potential subset of 1(b)) The enactors will not use said tools on said misuse combat system
7) The punishment for governance tool misuse is sufficient enough to act as a detractor for such actions
8) That said misuse combat system will not in itself be misused (The "Who Watches the Watchmen?" problem)
Assuming that all of the axioms can be fulfilled, I have no qualms or objections to your statement: Such a system in place will no doubt be more efficient & effective. It should be noted however that the hidden cost (centralization of control/power) will be a vector for abuse, & will attract those that want said power/control. In addition, due to the pigeonhole principle and the significant & non-zero probability of negative actors, in most scenarios the outlined axioms will not be completely fulfilled, with the tools of governance being used as outlined in (3).
So far they've failed to be stable, so I'm not sure what other aspect you would consider valuable.
Such things have failed through all of history. Adding crypto as a buzzword doesn't make them stable.
A global stablecoin is one area where decentralization might make a significant difference in utility.
It has a terrific history - you must be not counting all the stuff that fails for previously known reasons that people try again. Sure, if you only cherry pick post hoc examples of things that eventually worked, then you can claim a poor history. But the correct evaluation is to pick all things being tried right now by any person on the planet, and measure how many were new and worked for the first time.
You know what does have a poor history? People claiming something will work because they once saw some unrelated thing work and assuming that means all things will work, no matter what the previous evidence.
>barring obvious violations of the laws of physics
Why limit yourself to physics? Those are not the only laws that govern how societal structures work. Also is it possible that the reason some dreams in economics fail because they eventually hit physics? The same works for crypto.
Santa isn't real. Unicorns don't live in the chimney. There is no free energy, despite probably 10s to 100s of thousands of people and inventions that said there were. All those people that found counterexamples to Fermat's Last Theorem were wrong. The list of medical things tried well after they were known to be wrong is astounding, and none of those things will likely ever, ever work. I could go on and on. It's far easier to make up stuff that will not work than to make up stuff that possibly could work or definitely works.
So no, most things that currently don't work will never work, which is how we acquired the knowledge we have - we ruled out dumb and stupid things.
There is a tiny, tiny sliver on the edge that is undecided, and that is where almost all new things and inventions come from. The vast landscape of settled knowledge will stay that way.
So, as to stablecoins, and mostly crypto in general - this is what happens when programmers generally wildly ignorant of the reasons for how modern finance work try to make modern finance. Since they're mostly ignorant of why the system has evolved to where it is over millennia of knowledge, they're simply trying to reinvent all that stuff one destroyed speculator at a time.
The current stable coins imploded as nearly anyone with much knowledge about econ would have guessed. I didn't follow them closely, but one night a friend carefully explained all the processes behind (I think it was) Luna. At one point I told him that the pieces he explained form a dynamic equilibrium instead of a static equilibrium, which means a little perturbation and the whole things goes off the rails. He remarked that my insight, after hearing the details for the first time, was exactly what did happen.
It's funny watching crypto slowly try to reinvent every financial item that failed and do exactly the same things that caused previous things to fail. Stable coins are not new, after all.
It baffles me that people keep trying to do things that are simply dumb, either out of hubris, greed, or ignorance.
Good luck on whatever stable coins you expect to happen. If they keep it up long enough they might eventually invent financial derivatives, but I expect that to be when the world has already moved past those and found yet better products.
You describe the very scenario where stablecoins come into being, but you are too perfectly rational to engage in that creative behavior. That’s fine.
You admit others probably will but decide it will be a failure at the point where it works because someone else will have somehow bypassed this whole process.
I don’t hold any stablecoins or care if it works.
USDC does nothing, zero, nada, that literally hundreds of places tried over the past 200 years.
It will fail, for the same reasons.
That they haven't imploded over 4 years with tiny usage is not special.
It is fascinating how they've changed their claims over time, and are no where near transparent on what backs them at the moment. Good luck with yet another repeat of bad ideas.
DAI has not even stayed pegged to the dollar over it's few year lifetime. I don't know how you call that spotless.
It requires suspended disbelief to claim these things.
Extraordinary claims require extraordinary evidence.
Anonymous currencies for purchasing things that are illegal in the jurisdiction of the seller and/or buyer certainly have a value, but more as a service than a currency, so I wouldn't expect to make money sitting on coins. Instead I'd expect the payoff to be for buying them from the illegal sellers to sell to the illegal buyers. Essentially, being a launderer with possibly lower risk and less effort than in the past.
Imo a currency that makes those possible has negative value.
Regarding the "fiscal games" by nation states part - in democratic societies those "games" are policy decisions, voted for by the people. I find trying to circumvent the will of the people as expressed in a democratic vote morally questionable, and think that enabling antidemocratic behavior, too, is negative value. (Not to mention that it doesn't work anyways, as you noted).
When you live in a nation whose bank's decisions don't influence the world economy, you don't get a vote when those nations decide to raise or lower interest rates, or to suppress the value of their currencies, or have trade wars with each other. The idea of insulating yourself from those decisions that you did not vote on is attractive, but it now seems like more traditional assets are likely a better approach.
'Regular' currency has been used for all sorts of nefarious things since the dawn of currency, including assassinations and child trafficking and such. Nothing about USD/EUR/CAD/etc. inherently makes it impossible to purchase or participate in illegal goods/activities.
I'm not in favor of cryptocurrency, but the argument that cryptocurrency is the thing enables bad things to be bought/sold is a really tired argument and seems to forget all of human history prior to the last 10 years.
I believe KYC, banking regulations, and traceability all reduce the utility of conventional money for bad things. You can't easily transfer large amounts of money without leaving a trail that investigators may find in the conventional system. Bitcoin solves this!
How do you think crimes were paid for before BTC?
On a related note, my dealer takes cash and even accepts electronic transfers, but not BTC.
There's nothing special about cryptocurrency there, except that regulators have not regulated KYC/AML enough yet.
There's very little "value" in cryptocurrency, there is some value in the concept of blockchains, with proof-of-stake, replacing titles offices and other regulatory registers. NFTs are essentially that, but don't have any legal or regulatory power behind enforcing the "ownership" that the NFT records.
Darknet markets exist, are not a big secret, and are largely enabled by cryptocurrencies. This stuff has been in mainstream press since 2013.
Ask people if they think a market for criminals to exchange illegal goods and services provides positive value and you'll find that most don't think it does.
Just cause there's money to be made, doesn't mean value is created or otherwise robberies would be quite valuable too.
If a market enables breaking of laws created by democratic processes, any economic value is outweighed by its negative societal and democratic value.
If you win 50 bucks in a casino and spent 100 betting, I suppose you technically "won" 50 bucks, but in colloquial use of language it'd be more correct to say you lost 50 bucks.
The externalities are debatable, but I think we can accept that drug trade in the onionland has less negative externalities than drug trade on the street.
"well sure its a scam now, but in 100 years from now..."
"Nobody cares matt"
but then it turns out there's an army of crypto fools who repeat any stupid point he makes without reflecting on the value of those points.