115 sats \ 2 replies \ @Majjin OP 23 Aug 2022 \ parent \ on: What Must Be Done bitcoin
Stable coins on Bitcoin make me sad :( I also worry about how stable such a stablecoin channel would actually be, and what the risks might be. How would you avoid another Terra Luna but on Bitcoin
I don't believe education alone will be enough to dissuade people from using fiat, unfortunately. Its still important, but its not sufficient. I like the Strike approach. Fiat has a bigger network effect than Bitcoin. So why not piggyback off that network effect? Bitcoin is much more efficient and fair than FedWire or any other government fiat transfer layer. So use Bitcoin to transfer fiat value. Have "stable" balances at either end.
Another Terra Luna fiasco happening on Bitcoin is a very valid concern. I'm no expert, but I have some ideas:
  • No "yield".
  • No arbitrage tomfoolery.
  • The stable balances must be overcollateralized and the users should know to what extent.
  • If you use Bitcoin to overcollateralize the balances, use proof of reserves.
  • If you use other financial instruments, have multiple third party audits.
  • Be honest about the risks.
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120 sats \ 1 reply \ @DarthCoin 23 Aug 2022
I don't believe education alone will be enough to dissuade people from using fiat,
Everything starts with good education. How many normies in your life you know that can answer correctly: how are created the money (of today) ?
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100 sats \ 0 replies \ @Majjin OP 23 Aug 2022
100%
Haven't asked them, but I bet none of them can answer correctly.
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