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Author Topic: New Goldman Sachs stable coin. Tether doomed?  (Read 330 times)
bitmover
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October 06, 2018, 03:30:21 PM
Last edit: October 22, 2018, 06:09:04 PM by bitmover
Merited by suchmoon (4), dbshck (2), vapourminer (1)
 #1

Goldman Sachs announced they are going to launch an stable coin, USDC (US Dollar Coin)

Stable coins are basically loans (when you buy a stable coin, the company promises to pay back 1 usd for each coin). But Tether/Bitfiniex are not as resourceful and stable as Goldman Sachs. Goldman Sachs have far more credibility than Tether.

I believe this may be the beginning of the end for tether. Also, if this USDC is widely adopted by different exchanges, there will be a diversification and lower risk.

If tether/bitfinex does not back up their tether, and some sort of collapse happens, there will still be USDC and the crash may not be that big (if exchanges hold both of them).

I think this is a great news, and not many people are talking about it.

Quote
Goldman Sachs startup Circle, the Boston-based crypto finance company, has gone live with its stablecoin called the US Dollar Coin, or USDC.

This is the first cryptocurrency released by a major financial institution.

in order to avoid instability and inflation inherent to other unregulated cryptocurrencies, the value of the USDC will be tied to the dollar, according to CNBC.

“It unlocks an incredible amount of power for the dollar,” said Jeremy Allaire, CEO of Circle. “It’s basically a dollar that operates on the (Ethereum) blockchain.”

“Ethereum is the best bet but it’s not necessarily the end game,” he said. “For now it’s specifically on Ethereum.”

The USDC will be regulated as a registered Money Services Business under U.S. money transmission laws, and as a virtual currency, it will be regulated under its New York BitLicense. Furthermore, the company said it will hold deposits on a 1:1 basis in accounts that would be audited on a monthly basis. Each entity that wishes to enroll and issue USDC is held to the same regulatory-compliant standards.

https://perc360.com/goldman-sachs-launches-us-dollar-coin-fedcoin-coinbase-to-become-the-crypto-regulatory-agency/
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October 07, 2018, 06:53:20 PM
Merited by dbshck (2)
 #2

I don't see why people like stable coins, i mean there are many disadvantage including :
1. I don't see how people could earn profit since the price supposed to be stable
2. High-degree of trust towards company/developer is required
3. No guarantee it's no censorship-resistance or could provide anonymity in any way
4. I doubt any of stable coins can be redeemed back to USD or other pegged currencies easily

Looks like this coins might succeed since investor feel their money/investment is safe since it's created by Goldman Sachs and regulated, but i doubt Tether is doomed since any early product/technology which gain popularity shortly after launch won't die easily even if there's better product/technology.
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October 07, 2018, 11:27:45 PM
Merited by dbshck (1), paxmao (1)
 #3

I don't see why people like stable coins, i mean there are many disadvantage including :


It also has many advantages:
- You can postpone taxes.
- You can trader easier and faster, without payment taxes and anonymously.
- there are nice trading pairs. There are more USDT pairs than EUR pairs, for example.


There are many other risks associated, and you have no guarantee that tether will pay 1 usd for each usdt.... but it's very convenient
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October 08, 2018, 07:45:43 AM
Merited by vapourminer (1), bitmover (1)
 #4

Fortunately, somebody came up with a decentralized version of a stablecoin, so nobody has to trust a company, unless they want to. It's all done through a smart contract so completely autonomous, always worth ~1$ and backed by ethereum value, so you don't have to wonder or trust an institution to hold the counter value. It's quite amazing  Smiley

More details in here:

https://medium.com/@james_3093/the-dai-stablecoin-is-a-game-changer-for-ethereum-and-the-entire-cryptocurrency-ecosystem-13fb412d1e75

And as you can see in here people are using it https://coinmarketcap.com/currencies/dai/
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October 08, 2018, 12:50:15 PM
Last edit: October 08, 2018, 01:01:25 PM by paxmao
 #5

...

This is not a stable coin, is a debt collateralised with ETH with a maximum leverage of 60%. It is like buying and selling futures USD/ETH

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October 08, 2018, 03:46:55 PM
 #6

It also has many advantages:
- You can postpone taxes.
- You can trader easier and faster, without payment taxes and anonymously.
- there are nice trading pairs. There are more USDT pairs than EUR pairs, for example.


There are many other risks associated, and you have no guarantee that tether will pay 1 usd for each usdt.... but it's very convenient

Thanks for the information, the advantage seems tempting to those who prefer convenience over security/decentralization. At least, it's better than using banks in many ways.

Fortunately, somebody came up with a decentralized version of a stablecoin, so nobody has to trust a company, unless they want to. It's all done through a smart contract so completely autonomous, always worth ~1$ and backed by ethereum value, so you don't have to wonder or trust an institution to hold the counter value. It's quite amazing  Smiley

More details in here:

https://medium.com/@james_3093/the-dai-stablecoin-is-a-game-changer-for-ethereum-and-the-entire-cryptocurrency-ecosystem-13fb412d1e75

And as you can see in here people are using it https://coinmarketcap.com/currencies/dai/

I'm sure it can't be categorized as stable coins since CDP owners participation is required to keep it stable and i doubt it would work on reality. I only can agree the concept is amazing.
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October 09, 2018, 09:31:39 AM
Last edit: October 09, 2018, 12:08:55 PM by Piggy
Merited by paxmao (1)
 #7

I'm sure it can't be categorized as stable coins since CDP owners participation is required to keep it stable and i doubt it would work on reality. I only can agree the concept is amazing.

It actually seems to have been working pretty well looking at the charts and data available, this is since the starting of May, but it seems they launched the last December:



Also in other exchanges seems to be sitting pretty much everywhere around ~1$: https://coinmarketcap.com/currencies/dai/#markets
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October 10, 2018, 02:11:37 AM
Merited by paxmao (1)
 #8

Goldman Sachs announced they are going to launch an stable coin, USDC (US Dollar Coin)

Stable coins are basically loans (when you buy a stable coin, the company promises to pay back 1 usd for each coin). But Tether/Bitfiniex are not as resourceful and stable as Goldman Sachs. Goldman Sachs have far more credibility than Tether.

I believe this may be the end beginning of the end for tether. Also, if this USDC is widely adopted by different exchanges, there will be a diversification and lower risk.

If tether/bitfinex does not back up their tether, and some sort of collapse happens, there will still be USDC and the crash may not be that big (if exchanges hold both of them).

I think this is a great news, and not many people are talking about it.

Quote
Goldman Sachs startup Circle, the Boston-based crypto finance company, has gone live with its stablecoin called the US Dollar Coin, or USDC.

This is the first cryptocurrency released by a major financial institution.

in order to avoid instability and inflation inherent to other unregulated cryptocurrencies, the value of the USDC will be tied to the dollar, according to CNBC.

“It unlocks an incredible amount of power for the dollar,” said Jeremy Allaire, CEO of Circle. “It’s basically a dollar that operates on the (Ethereum) blockchain.”

“Ethereum is the best bet but it’s not necessarily the end game,” he said. “For now it’s specifically on Ethereum.”

The USDC will be regulated as a registered Money Services Business under U.S. money transmission laws, and as a virtual currency, it will be regulated under its New York BitLicense. Furthermore, the company said it will hold deposits on a 1:1 basis in accounts that would be audited on a monthly basis. Each entity that wishes to enroll and issue USDC is held to the same regulatory-compliant standards.

https://perc360.com/goldman-sachs-launches-us-dollar-coin-fedcoin-coinbase-to-become-the-crypto-regulatory-agency/


wow so much shamlessness, goldman sachs effectivly endagers the continuity of the north american union

regards
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October 10, 2018, 05:00:50 PM
 #9

Upon some additional analysis, I think that the cost (or benefit) of that stability is hidden in the Eth deposit required to emit the DAI. If you sell DAI you have blocked ETH and that rises and lowers in price continuously respect to the dollar.

I have read the Medium article, but I would appreciate if someone could link a good explanation.
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October 10, 2018, 07:28:33 PM
Last edit: October 11, 2018, 07:14:11 AM by Piggy
Merited by paxmao (1)
 #10

Upon some additional analysis, I think that the cost (or benefit) of that stability is hidden in the Eth deposit required to emit the DAI. If you sell DAI you have blocked ETH and that rises and lowers in price continuously respect to the dollar.

I have read the Medium article, but I would appreciate if someone could link a good explanation.

It seems to be rather complex, or at least i don't understand all of it, but reading a bit more i found out this part in the whitepaper where they are talking about external actors and the Maker token ecosystem, which is designed to oversee and keep the price of DAI stable.

To put it very simple, there is a consensus system where is decided the exchange ratio dai / eth to feed the smart contracts in order to keep the price at 1$, by partecipant you get some incentive in MKR(maker) tokens.

https://makerdao.com/whitepaper/#key-external-actors
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October 27, 2018, 11:43:09 PM
Merited by vapourminer (1), paxmao (1)
 #11

I don't see why people like stable coins, i mean there are many disadvantage including :
...
Looks like this coins might succeed since investor feel their money/investment is safe since it's created by Goldman Sachs and regulated, but i doubt Tether is doomed since any early product/technology which gain popularity shortly after launch won't die easily even if there's better product/technology.
There are 3 kind of people (to oversimplify it):
1 who were involved in crypto before Dec 2017 and they have a clue
2 who were involved in crypto in Dec 2017 or after
3 who don't care at all

I just think about type 2:
they don't really have a clue about cryptos but they see that there's a huge potential in it (and a huge risk of course). They don't know how to deal with cryptos (unlike type 1) so they need a trusted 3rd party to help them manage their investment in cryptos
They will happily use this new USDC, because they will trust their bank (because they already trust their bank in connection with credit cards, loans, other investments etc...), so they don't need a trustless environment, a smart contract based system, they just simply want to invest and earn. Anyway, exchanges are using KYC (those who trade fiat, not only cryptos) so exchanges are not anonymous anymore, it won't be a huge difference if they start to trade USDC or not...
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November 03, 2018, 09:40:36 PM
 #12

I don't see why people like stable coins, i mean there are many disadvantage including :
1. I don't see how people could earn profit since the price supposed to be stable
2. High-degree of trust towards company/developer is required
3. No guarantee it's no censorship-resistance or could provide anonymity in any way
4. I doubt any of stable coins can be redeemed back to USD or other pegged currencies easily

Looks like this coins might succeed since investor feel their money/investment is safe since it's created by Goldman Sachs and regulated, but i doubt Tether is doomed since any early product/technology which gain popularity shortly after launch won't die easily even if there's better product/technology.

You cant get profit from stable coins, but people just need to keep their funds. For example after bullrun you sold your ETH, BTC etc. at AHT price and convert them to stable coins and waiting lower price. But Im agree with other your points. How we can trust to all this new stable coins? They just came to market and they must earn this trust during long time.
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November 24, 2018, 10:17:45 PM
 #13

Tether doomed?
If the "common knowledge" re: Tether is true, then it was doomed anyway. Perhaps we can accelerate much faster towards the end of a really bad, yet very exciting "movie" experience?


New Goldman Sachs stable coin.
Wow, Goldman Sachs is saying a lot about how far blockchains have come in the last few years. Their status as elite Sacks of Gold will certainly help get their "radical" plan approved. We live in exciting times.

Quote
The USDC will be regulated as a registered Money Services Business under U.S. money transmission laws, and as a virtual currency, it will be regulated under its New York BitLicense. Furthermore, the company said it will hold deposits on a 1:1 basis in accounts that would be audited on a monthly basis. Each entity that wishes to enroll and issue USDC is held to the same regulatory-compliant standards.

Each entity that wishes to enroll and issue USDC...
Hey! Who wants to launch an ICO to get funding to apply to legally issue USDC...  ...LOL?
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November 27, 2018, 04:48:52 AM
 #14

Cryptopia had a stable coin pegged to the NZ$ until their bank gave notice that they were going to shut their account.

It worked well as a two way system. You could deposit from anywhere in the world and withdraw if you held a NZ bank account (for KYC purposes).

Recently it was in the news that they are relaunching it.
https://coingape.com/stablecoin-new-zealand-plans-relaunch-new-zealand-dollar-token-nzdt/

Ideally a forward thinking Government will launch a digital stable coin. But the technology still carries too many risks for Governments to get involved.

https://www.coindesk.com/tether-claims-30-million-stable-token-stolen-attacker

IF a Government issued coin got hacked or exploited it would cause potentially very serious repercussions to their financial systems.

While companies can limit their liability and their creditors often carry most of the risk and losses. Bankruptcy for a country carries severe consequences for their citizens.







 

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November 27, 2018, 12:38:49 PM
 #15

....Bankruptcy for a country carries severe consequences for their citizens.

Ironically, most countries are bankrupt already, they simply have really good ways to slow down the train wreck.
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