Oddbean new post about login | logout Is there an easy way to shave off a sliver of gold to pay for a bill?
How do people pay bill before stablecoin?
Fiat. Stables are exchanged for fiat.
So just use fiat, you don’t need stablecoin to pay bills. Stablecoin in actuality js worse than shitcoin, zero upside with real probability of getting rugged
But your local currency is fucked or your can't get a bank account, so you put your money into a digital "account" via bitcoin or USD pegged stables.
If you can get a Stablecoin, you can get bitcoin instead 🤷🏻♂️
And then Bitcoin has a bear market and you can't pay your bills. Bitcoin and the world is larger than you and your use cases.
I guess, if you go all in but all Stablecoin pegged to fiat will eventually go to zero. That is a certainty
Stablecoins are for like 3-9 month stable liquid holdings, which can’t be done with highly-inflationary currency, can’t be done with bitcoin yet, and yet most of us arguing about this have access to in developed markets without thinking about it. Stablecoins solve that problem for a lot of people. They aren’t for putting your life savings into.
Savings by definition is additional fund that you don’t need that you can put aside for a long time. Stablecoin is worthless in hyperinflating currency and useless in stable currency. What problems are they solving currently that bitcoin can’t?
The ability to hold purchasing power roughly flat for six months. You don’t make a stablecoin out of hyperinflation currency. You make them out of whatever the most salable currency is- usually the dollar.
The "savings" for an average user in Venezuela, for example, I don't think it exceeds one year. He/she wants to have the dollar to be able to make food purchases generally. In the midst of hyperinflation having a little bit of dollars was one of the few options to be able to "be safe" against a currency that could easily devalue 5% every day 😅 It was crazy. I am not a supporter of centralized "Peg coins" like USDt. But the "Crypto" market in Venezuela is largely dominated by the USDt/bolivar pair. And keep in mind that the Crypto market is a very small niche within the Venezuelan economy. The vast majority prefer to use dollar cash. And the lucky few have a dollar account abroad. Interesting that with a hyperinflation that wiped out most savings and destroyed the country's middle class did not run to take refuge in Bitcoin. The best Money may be in sight but very few of us make the effort to understand it.
You have great points and I get it. Unfortunately, people in third world countries feel saver with usd stables. Eventually they'll understand that #Bitcoin is superior.
Bitcoin is best for long term savings, but that is not the problem that stable coins solve. If you get paid every 2 weeks, but need to buy groceries, for example, more often than that stable coins could be a literal life saver. Imagine: you just got paid and know that you will need to buy food again in a week, because you don't have refrigeration. Bitcoin could be up or down 30% in a week. Your local currency will for sure be down 20% in a week because of hyperinflation. Your government regularly steals the money in dollar denominated bank accounts, if they're even allowed to exist. USD stable coins will probably preserve practically all of your value over such a short time frame. In the long run USD will go to 0 and Bitcoin will be the only money, but you don't care about the long run, you just care about being able to eat next week. This is an important and valuable use case in a small but growing number of countries.
If you don’t have refrigeration, you should buy a fridge first not a Stablecoin 😆