Shake this thought: stablecoin issuers are emerging as major buyers of short-term U.S. debt. They hold more than the insurance and diversified giant Berkshire.
Firstly, the Y2k of bitcoin and elephant not in the room: Tether. Critics like parroting mainstream talking points and march on about Tether’s inevitable implosion because they don’t understand Tether is like a plover bird to the U.S, the bird that crocodiles open their mouths for, so it can peck their killer mandibles clean. It’s a symbiotic evolution. Tether isn’t going anywhere, not unless chartered banks encroach on their business and slowly absorb it. Not only is Tether a large buyer of T-bills, but they also tour the world dollarizing the living shit out of it. They’re greasing the rails everywhere, from being the official currency of the US-backed Myanmar unity government, proliferating in Africa (curiously in places where China is trying to gain footholds for natural resources with their debt and Yuan, including BRIC nation South Africa), to capitalizing too many bitcoin companies to name.
Tether's daily trading volume averages $52B, which on most days is about as much as every cryptocurrency in the world—including bitcoin—COMBINED.
Tether settled $18.2T last year. That’s almost as much as Mastercard ($14T) and Visa ($7.7T) COMBINED.
That’s just Tether. PayPal is working on a stablecoin. JPMorgan has its onyx platform in beta. Several smaller banks are hiring for stablecoin development. We already know USDC, Dai, etc. And Moody’s (the financial ratings agency) is working on a global stablecoin rating framework.
(ISSN 2767-4509) The Federal Reserve IFDP last year on stablecoins:
“A breakthrough innovation in the future of payments.”
The U.S. dumped gold in 1971 knowing they had something better to link to the USD: petrol.
Enter: petrodollars.
This allowed the Fedboise to expand its monetary supply slowly, but safely, for 50 years, with no apparent loss in demand. That’s coming to a close. Everyone sees it. From green energy initiatives, the end of Middle East occupations, the assertion of independence, the rise of China, debt, and so on.
Enter: Bitcoin.
Yes bitcoin, and here’s the important thing that Tether did in this regard:
Tether, by expanding so rapidly during the first part of Bitcoin’s life, when 92% of bitcoin’s total supply was issued, allowed the U.S. market to make sure the value being inscribed into the protocol would be related to the dollar system. The BTC/USD pair dominates trading volume to the point the game is over. This pair, wether it’s USD or USD equivalents (stablecoins) has won. This means the U.S. has cornered a large piece of the energy market. How? Because in order to mine, you need both silicon (ASICs) and energy. I’m not talking about the mining economy of scale—which is access to capital and cheap electricity—I’m talking about the capex (capital expenditure). So if you expand your energy and acquire silicon to mine, you get bitcoin, which is tied directly to the USD. Thusly, any expansion of hashpower energy, is an expansion of the USD. This is the Softwar Jason Plowery should've talked about, instead of 400 pages misnomering PoW's usefulness.
This perhaps will make more sense when stablecoins begin proliferating on the Lightning Network via L1’s atomic unit (satoshi) in a brilliant sat seignorage scheme, especially when anyone in the world can access the Lightning Network with just a phone. Thunderboise 🤪. Perhaps something wicked this way comes, but in my opinion this will fix the money fix the world over the longterm.
I reject the notion that the USD will suddenly die, and reject the notion that bitcoin will transition the world’s value without Trojan Horsing the USD in an intimate way. Also, while bitcoin security budget saviors seem interested in thrusting inscriptions, forks, chains, and their expedience inside the womb of a 15-year-old protocol, I’m thinking the future of [most] mining hashpower should converge on something more legally tenable. A post for another time.
Rebuttals please. Sats for hi-rez replies as always. You know the rules.
Why (some) people are "in love" with stablecoins? Stablecoins are pegged to a fiat currency, right? Fiat currency is inflationary, that means is NOT "stable" at all, is just robbing you. So where is the "stability" of a stablecoin? Don't drink their (fiat lovers) coolaid, they just want to fool you into using these so called stablecoins.
USE BITCOIN ONLY
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You are very right in that the USD or the USDT is a terrible store of value in the long term. But remember that the masses don't want true freedom; they want stability and comfort while they believe they are free. Some people among the masses will wake up, but most of them actually want to drink the kool-aid and enjoy the feel-good vibe.
If you haven't already, watch The Jones Plantation by Larken Rose and observe Mr. Smith's role in the story. It's only 12 minute long.
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Should I give a shit about "masses"? FUCK'EM'ALL
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:-D
I take it that you have barely read my comment and haven't watched the video. It hasn't even been 12 minutes since I posted the previous comment.
If you become angry at Mr. Smith you are giving him more power.
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I know very well Larken. The HFSP wasn't for you, but for the dumb masses.
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I know. I didn't take it personally. This is why I laughed.
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The featured movie "Jones Plantation" is about to be released. Will be awesome!
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Nobody is in love with them. They're derivatives of debt. But when they get regulated, registered, and fully compliant, they become as good as anything a chartered US bank will give you in an ATM or over the counter. From here they get accepted at retailers everywhere. That's quite powerful for the US Gov't if they're on the Lightning Network, and thusly piped anywhere in the world they want them.
Fiat is dishonest,
but to deny consequences or importance of the BTC/USD pair is at the very top on my list of dishonest things I see bitcoiner's do.
To act like the BTC/USD a non-consequential thing?
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FIAT DELENDA EST. In any shape or form.
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Then explain how you're breaking the pair, and how you're breaking the mining economy of scale? You don't get it yet. The transition to a bitcoin standard is decades away, and it's your hated fiat that will get us there, and in some telling, save us from the scourge of a CBDC as well.
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The transition is not done by... going back to use fiat. But by using ONLY BTC as much as you can.
I am in Bitcoinlandia from 2012... and living only using BTC from 2018. Is it hard? yes, but I really want to do it. And if I want to destroy fiat world, this is the way. not going back to fiat.
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You don't have to. And when stablecoins are on the LN, it's going to be infinitely easier for you to only live on BTC without ever touching fiat. Because if my store, site, or business uses the LN, it accepts bitcoin too, which I as the owner of the business, if I choose, can instantly and for marginal cost swap into fiat.
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OMG... stablecoin on LN another oximoronic term... People will never learn the fucking lesson.
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This is the missing Trojan Horse part we've been waiting for: wheels. Don't fork us daddy Darth.
In-protocol support of stables in LN plus an in-protocol method of trading them tied to a distributed network tracking this exchange activity to reveal its scope would be pretty amazing trojan horsing of fiat. If LN becomes the rails of instant small payment processing like as done by Visa and MC the logic for all OTC exchangers to use LN as their back end becomes obvious to everyone and Bitcoin will then be at the centre of it because its supply rate is fixed and thus becomes a logical base for it to flip from BTC/USD to USD/BTC.
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Kaboom! Kaboom! Kaboom! Pretty controversial and unacceptable for many bitcoiners though...
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Satoshi's invention was not the only part of the "sly round-about way", though it is fundamental. The foundation of the very existence of stablecoins is that they mimic Bitcoin's online-only existence while creating a direct bridge to fiat. The central banks are all scrambling to make their own direct and online-only forms of their currencies but they so have missed the boat for FMA. They will probably be forced to adopt these stablecoins because.... they are already operational and secure. That's the "sly round-about" part of how Bitcoin is - let's just say it straight - parasiting the global fiat money system, gradually eating more and more of it.
Shitcoins are still shitcoins but internet fiat coins are merely a more liquid form of fiat that doesn't involve a oligopoly of payment settlements, in that it enables a broader scale of operations to plug into the online money system while maintaining the ramps on and off from fiat, with very very little that the banks can do to cut this pathway off.
If you can transact these fiats on a payment settlement system like LN then anyone can get into the business area of the big instant payment processing systems (and that includes remittances), by simply putting your liquidity into LN channels that then also "poisons" the waters of fiat money processing since this makes the option of Bitcoin cheap to adapt to, greasing the skids for further adoption of LN, and thus, regardless of the capability for fiat, Bitcoin's market value.
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not sure how to feel. wow
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What you say is true for centralized tokens, but for decentralized stablecoins it's a different story. Tether is just an IOU, and everybody who holds it is at the whim of being rugpulled at any time. The centralized nature of it makes it so that malicious actors are going to try to manipulate it. Decentralized stablecoins are a whole different beast: backed by hard cryptocurrency and inmanipulable by design they truly have the power to trojanize USD by putting the monetary expansion closer to the people. Examples of stablecoins that meet this properties are the first version of DAI(SAI), Liquity and its RSK fork: Sovryn Zero. Anyone can put bitcoin into a smart contract and print USD tokens, it's like free money. OTOH Tether can also go brrr at any time and print free money, and they do: https://www.kalzumeus.com/2022/11/11/tether-required-recapitalization-again/
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There's no such thing as a decentralized stablecoin. If it has a stable price, it's because it relies on an underlying value. In this case it's a derivative of debt (because fiat is debt). I'd never touch a stablecoin that wasn't regulated and backed 1:1 in reserves custodied by a chartered bank, same as I wouldn't touch a company stock that wasn't listed on an exchange and regulated by the SEC. No legitimate business will ever accept a counterfeit dollar, and they shouldn't. And the US government will never allow them to significantly proliferate. And they shouldn't. Bitcoin is the decentralized money. Stablecoins play tag with sovereign debt, and if anyone wants to play that game, they should follow the rules, and not try inflating the currency that they complain inflates too much.
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There's no such thing as a decentralized stablecoin.
I have given concrete examples of decentralized stablecoins backed by bitcoin: smart contracts that issue tokens redeemable for 1 dollar worth of btc.
I'd never touch a stablecoin that wasn't regulated and backed 1:1 in reserves custodied by a chartered bank
Backed by what? Why do you trust banks and regulations more than a smart contract?
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I hear nothing but shade about tether… Maybe an American stable coin should be based in America? Too close to CCP for me personally
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I'd argue they're closer to the CIA. I've heard some stories about Paolo Ardoino. All the same, I think eventually they'll get flipped/absorbed by chartered banks.
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why not use Bitcoin
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You are using bitcoin, that's the thing. And you're driving immense value into it.
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Note: when I mentioned the petrodollar, that technically started just after WW2, but the word petrodollar didn't come about until the early 1970s, and the dollar recycling mechanism hadn't gotten started in earnest until then as well
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My rebuttal/question: How does my life improve by believing that bitcoin cannot/will not become a unit of account?
We have to aim for the stars. Maybe we will only reach the moon in our lifetimes. But we have to aim for the stars, for the highest truth, not for a watered down version of the truth to make it palatable to normies.
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