If a stablecoin is a token backed by dollars deposited at a bank and bank deposits are IOU for paper-dollars
Then
A stablecoin is a promise to pay a promise to pay another promise to pay absolutely nothing.
Counterparty risk^³
Great deal, isn't it?
Then
A stablecoin is a promise to pay a promise to pay another promise to pay absolutely nothing.
Counterparty risk^³
Great deal, isn't it?
/2 What is kind of ironic, since the whole purpose of #Bitcoin was to eliminate third parties. Stablecoins reintroduce them in a novel but more insecure way: instead of one third party, now you have another one.
/3 But not all stablecoins are created equal. Since it's basically a counterparty game, one needs to assess who these entities are.
US-based issuer with US-based bank ≠ God knows where's the issuer and no one knows if there's even a bank at all.
US-based issuer with US-based bank ≠ God knows where's the issuer and no one knows if there's even a bank at all.
/4 To top it all off, you have the additional risk of trusting the chosen blockchain for issuance actually works.
Are the alleged benefits really worth it? {fin}
Are the alleged benefits really worth it? {fin}
