For something on an about page, this copy draws some extremely frank comparisons.
> If users all have to go through a KYC process, this significantly limits the viability of the token to permit free movement of money across borders.
KYC processes are, essentially, the law. Governments go out of their way to do this to cut down on financial crime. Regardless of whether you believe these laws are useful or just, I find it difficult to believe they'll have any success trying to work around these laws. Governments (in general) do not like it when folks try to create loopholes: I wouldn't bet on a project whose stated goal was to avoid complying with the law.
They do not apply to all financial interactions. Fortunately they have not yet passed KYC laws that apply to many types of peer-to-peer financial activity, as the ones in force were designed for an era where electronic transactions were only intermediated by large trusted third parties, and largely exempt direct p2p transactions.
So this sudden opportunity to legally engage in financial interactions without the encumberance of 40 years of accumulated AML/KYC laws that has arrived with the emergence of decentralized finance offers the opportunity to reverse the trend toward governments, at the behest of international organizations like the FATF, increasingly resorting to the warrantless dragnet surveillance of finance approach to combating crime, i.e. Total Information Awareness applied to private financial interactions.
Similar to how the internet forced governments to back off on censorship laws, cryptocurrency has the potential to force the political class to rethink current financial crime laws and liberalize people's access to money. It has the potential to lead to criminal laws being limited to those that respect traditional due process and privacy rights, and the principles of freedom of association and presumption of innocence that free societies depend on.
Or it has the potential to force the political class to rethink current financial crime laws, and tighten up P2P loopholes cryptoenthusiasts are exploiting to make their product more attractive to ransomware developers, to the detriment of everyone else who just wants to avoid photocopying their passport every time they send money to their friends. I wonder which is more likely.
As for which I think is more likely, I think it's liberalization of finance and the retreat of the surveillance state. The new DeFi system is so much more efficient than the traditional financial system and the restrictions it's straddled with, that economic value will flow to it, and economic interests will trump the institutional inertia of the up-to-now steadily advancing surveillance state.
And it's fortunate too. If not for the sudden splash of financial liberalization brought about by cryptocurrency, the frog in the pot would have slowly been boiled by the creeping centralization of finance that has occurred over the last 40 years.
The last 40 years has seen regulatory institutions increase the restrictions they impose, the staff they employ, and the budgets they oversee, while becoming increasingly intertwined with the corporate giants they are meant to regulate through campaign contributions, political lobbying and the revolving door that exists between them and the private sector.
To do this the currency needs to win in a battle against every government without being blocked or made illegal. It doesn't matter what you think about KYC laws: trying to subvert them means taking on governments, and that is almost never a winning strategy. Especially when your strategy is "build a technical system that outfoxes the government by strong-arming them into my way of thinking".
Did they? Governments regularly censor stuff on the internet all over the world.
That's maybe not the best example for making a pro-liberalization case, as pornography isn't exactly a public good, but it's what comes to mind as a clear case of the legal strategy employed by the state changing due to new technology.
Meanwhile, the real criminals pass through KYC with stolen ID.
Another thing with KYC is they are above all privacy laws, including GDPR. For example, services are not allowed to delete your private account details even if you close your account, for 5 years or more. Also, as an account holder, you are not allowed to know who your KYC details were shared with the government / law enforcement, and why. You are not even allowed to view the warrant (should there be one).
Trying to eliminate it will push a massive amount of humans to reactionary action.
And when humans can't get safety out of trust, they get it using force and control.
The art is to balance these, not to imagine you can eliminate it.
BTW: I'm far from being religious. My idea of faith is more abstract than the religious one.
The only purpose of this currency is to enrich those who invented it.
As is tradition in crypto. It's kind of implicit.
[edit] I mean, think about this rationally. You're creating a new token, that doesn't have revenue, a business model, or any way of generating income. And yet it is "100% asset backed, and funded by top Silicon Valley investors."
Those investors aren't in it for their health. They don't care about decentralization and trustless whatever. They want to make an ROI.
How can you make an honest ROI if you don't have income?
I've had my share of discussions with arcticbull, it's amazing how smart he can be when he wants and how clueless he makes himself to be when it comes to acknowledging the upside of crypto projects.
how? Money market funds have negative returns these days.
This seems like a very curious view of the world to me. Do you believe that people who buy houses and sell them at a profit 20 years later are dishonest?
It's like you take the housing part out of the housing bubble, and are left with the speculative aspect, the bubble.
On the other hand, any project that can be transparent about its reserves (whether though "smart contracts" or plain old armies of bean counters writing actual compliant reports to Uncle Sam) is welcome by my book. Anything that can take the influence and dominance from Tether in the crypto market should be brought to the table and considered for analysis.
> The only purpose of this currency is to enrich those who invented it.
Isn't that exactly what's happening with the existing relationship between governments, their central banks and the financial elites?
I'm not a fan of Reserve either, much less of this Silicon Valley idea of governance, but as long as they they make good on their deals and make their money by providing stability in exchange of absorbing risks, I don't see anything immoral or unethical about the fact that private individuals and organizations can go on to try to create an alternative to central banks.
In other words, I’ll be happy if bitcoin crashes from Tether (I believe it will, probably to well under $20,000) - that is nothing more than a huge buying opportunity.
Yeah, yeah, I get it. No one can really know the true price of BTC. It's all speculation. Nothing to back it up... what else do you have?
Understand this: there is a large number of people that will keep working with BTC (and crypto) regardless of price and current market conditions. There is a large number of people that don't care about the price. People will keep building things on crypto, regardless of price and it will become more and more of an alternative to existing financial/economical systems.
Can someone just bring that out so we can have a crypto currency that is actually useful as a currency?
A demo a couple years ago showed AZTEC being used to conduct privacy-protected DAI transactions for the first time:
https://twitter.com/avsa/status/1068536063470125056
Since then, AZTEC's privacy technology has become more efficient in terms of gas, and more effective at protecting privacy, going from protecting merely the privacy of amounts, to protecting the privacy of amounts transferred and sending/receiving addresses.
AZTEC is also developing a zk-Rollup, which increases Ethereum's maximum throughput from 15 tps to 3,000 tps, so that these private stablecoin transactions can be done at scale (though not 3,000 tps, since privacy comes with a computational and state storage overhead, but still much greater than 15 tps).
https://blog.makerdao.com/busting-makerdao-myths-seven-misco...
Asset “xUSD” - first and only untraceable private stablecoin in monero based blockchain developed by www.havenprotocol.org team. XUSD was started 07/2020 and soon in 02-03/2021 team also start next four assets - xEUR, xCNY, xGOLD and xSILVER. All in private haven protocol.
Sounds like a near stable coin but 6% depreciation is still not stable.
Zcash will be adding support for user defined assets. may be some one will create a stable coin based on Zcash using this.
Even if it were banned it would have little long-term impact. Literally impossible to stop decentralized swaps unless they also cripple BTC. it would be very powerful actually for people to realise how unstoppable it is.
- Dollarization, that is an already relatively common phenomenon (Zimbabwe, Argentina...) with controversial effects. Definitely not a silver bullet for hyperinflation.
- A payment system, that requires to work tightly on UI/UX, on cultural preferences, to adapt to local infrastructure... Exactly the reason M-pesa succeeded where many silicon valley startup failed.
And then, there are the technology choices, the stability mechanism, the regulatory aspects ...
From their Ethics page. Should go over well with regulators.
I understand your point from a practical perspective, but I think it's important to point out how far the situation of needing to worry about how regulators will react to decentralization technology is from the ideals of democracy.
I'm sorry, but the institutions are in place today precisely because it is society that upholds them or tears them down. The gears may turn slowly when it comes to implementing change, but they very much are answerable to the public in democratic societies.
It's nothing fancy its like an SDR for cryptocurrencies[0]
For example DAI is pegged to one USD to make it as useful as possible but "The Reserve token will initially have a target value of $1.00, but is designed to go off of the peg from the US dollar in the long term.".
For context, Leverage Research was this pseudo-science psychology woo/cultish org made by people related to the rationalist movement. See: https://www.lesswrong.com/posts/8j4zirwfhWhT8nwsc/a-critique... for some background.
My personal expectation is that the existing frontrunners, Bitcoin and Ethereum, will stabilize in price as the percentage of retail speculators decreases and the percentage of institutional investors + users increase.
Consider the following scenario: your index (let's call it BTCEMA) tracks BTC at $30k but BTC does a crypto thing and drops $5k in a day, so it's now below the index. A lot of traders would sell your BTCEMA tokens to buy more real BTC expecting a recovery or get into stable coins expecting a further drop. At any rate, the exchange price of BTCEMA would drop due to sell pressure.
Your indicator has "broken peg" which is an ugly situation that threatens every artificial instrument in that space. The whole miracle mixture for algorithmical and asset-backed stable coins is to prevent such a situation to happen for a longer time. It's a bit too much to explain but they try to defend against this in different ways, e.g. reducing supply to hike price.
In your case, you'd need to buy BTCEMA from the market to prop up price for as long as it takes the moving average to digest the sudden price jump. You'd find yourself in the situation of the Bank of England trying to defend the Pound in 1992 and only making Soros rich instead.
Worldwide, historically, this approach seems to have a poor track record.
This is in the site guidelines: https://news.ycombinator.com/newsguidelines.html
The fact that it is unregulated, and weakly subject to AML/KYC is a feature for me, not a problem. My money, my business, not the governments.
Their banking partner, Deltec, in the Bahamas is chaired by the man who created the Inspector Gadget TV series.
[edit] Tethers are chuck-e-cheese tokens that became so integral to the entire cryptocurrency market (90% of ETH inflow and 80% of BTC inflow are Tether, not dollars) that nobody can do anything other than pretend they're legitimate. Because if they're not - and they're not - then the whole thing falls down.
This sounds incredibly fitting for a cryptocurrency.
That actually increases their credibility in my eyes. Someone with genuine, real-world-useful talent is involved in this?
The problem is that there are 25 billion USDT.
