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Comment by henning | Hacker News Reader

Copy-and-paste meme shitcoins are not a "monetary system". Thanks!

> Copy-and-paste meme shitcoins are not a "monetary system".

Agreed. But we are talking about crypto here which seem to have a lot more than shitcoins. (Hint: search for "bitcoin" or "stablecoins")

https://www.forbes.com/advisor/money-transfer/currency-conve...

The post you are replying to did not state that they were. You can easily look up practical application of cryptocurrency by looking up stablecoin usage over time.

You're gonna convince people there are practical applications of cryptocurrencies outside of grift and crime when they actually see them and find them useful in their own lives, and not before.

Yes. Stablecoins are a proxy for real world usage.

You trying to boost it to make your investment viable? It doesn't really exist for anything other than that like most crypto.

My investment in…. stablecoins?

What does that mean?

"stablecoin" is a misnomer. Perhaps they should be called temporarily stable coins, because they tend to fail under pressure.

https://chainsec.io/failed-stablecoins/

USDC is more collateralised than your bank is (if you bank in the US).

It's not. The FDIC is ultimately collateralized by the entire US economy and will change the rules on a whim to collateralize ineligible depositors as seen in the silicon bank fiasco. On paper there is a limit but in practice it is as high as the rich and powerful like.

It's not even a problem if they run out of imaginary money because the fed can simply ease in more to the FDIC via debt shell games.

> On paper there is a limit but in practice it is as high as the rich and powerful like.

I'm not particularly bullish on crypto, but this is definitely not the flex you think it is.

Who says it is a flex? It is simply reality, he who holds the central bank will tilt it and insuring institutions to favor powerful depositors, it's almost an axiom of governance and another reason why founders hated and warned against central banks.

USDC just holds 90% in government treasuries custodied by blackrock & 10% in cash in a "too big to fail" US bank that's systemically important.

Your local bank has a 0% reserve requirement[1]. Ofc it'll most likely get bailed out by the FDIC (by taxpayers) in case of emergency but US regulated stablecoins are in no way more risky than US banks

1: https://www.federalreserve.gov/monetarypolicy/reservereq.htm....

Problem is that's held by a private entity, and if coin holders are defrauded no one will be bailing them out, unlike bank depositor or Treasury note holder.

As opposed to what currency that does not fail under pressure?

While some currencies from developing nations fail, it just doesn't happen with those from rich countries, because the country has the assets to intervene if there's trouble. With stablecoins, when things get bad it just dies and goes to nothing.

There are incidents where a national currency winds up getting devalued, like when Soros bet against the UK pound. But proportionately that's a small decrease in value, the pound didn't go to zero like failing stablecoins do.

I'd hope that all stable coins have a shorter life than the currency they are connected to; but that website is silly. Tether is by far the largest stable coin, has been around as long as anything on that list and has been shockingly resilient under pressure so far having survived 2x depeg events, positive real interest rates, a couple of market crashes and anything else I missed along the way. It has outlasted names like Credit Suisse, Silicon Valley Bank and Venezuela.

It is only a question of time until it fails like everything else does, but so far so good.

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