Are Stablecoins A Necessary Evil?

[EncryptKnomes]

"Fiat-backed stablecoins are therefore rarely actual cryptocurrencies, which causes them to inherit their main characteristics and shortcomings from the centralised banking system. Ultimately, they function in the same manner as fiat, backed by what amounts to an IOU."

Danial Daychopan wrote a short article linked below that has got me thinking. Are stablecoins bad for the cryptocurrency ecosystem because they are essentially fiat in digital form, or are they beneficial as they provide stability in an extremely volatile market? Curious to hear your thoughts, give it a read and let me know your angle on it.

https://medium.com/@DDhopn/stablecoins-3b93b4f1ddc5

[Haunebu]

I honestly feel that stablecoins like Tether etc are indeed a necessary evil. They do pose problems for the cryptocurrency market(Tether controversy etc), but they will still be in demand as long as the market is extremely volatile.

Once the volatility lowers in the long term, the demand for these coins will most likely fall which is why they are a necessary evil at present.

[muslol67]

"Fiat-backed stablecoins are therefore rarely actual cryptocurrencies, which causes them to inherit their main characteristics and shortcomings from the centralised banking system. Ultimately, they function in the same manner as fiat, backed by what amounts to an IOU."

Danial Daychopan wrote a short article linked below that has got me thinking. Are stablecoins bad for the cryptocurrency ecosystem because they are essentially fiat in digital form, or are they beneficial as they provide stability in an extremely volatile market? Curious to hear your thoughts, give it a read and let me know your angle on it.

https://medium.com/@DDhopn/stablecoins-3b93b4f1ddc5

In the beginning there was only Tether. And it was enough for everyone. As you already know, the bull from 2017 was also very effective. But the obvious mistakes they made came here. Today, the number of stablecoins on the market is increasing day by day and I am not sure how much they are necessary anymore.

[spadormie]

I honestly feel that stablecoins like Tether etc are indeed a necessary evil. They do pose problems for the cryptocurrency market(Tether controversy etc), but they will still be in demand as long as the market is extremely volatile.

Once the volatility lowers in the long term, the demand for these coins will most likely fall which is why they are a necessary evil at present.

Necessary evil because of controversy but necessary for us to be safe on our trades. It is a safe-haven for our trades. Since they are stable, if we are on loss we can simply put our btc on tether in order for us to be safe on the continuous downfall.

[r1s2g3]

If they are giving protection against volatility, They are helping to increase liquidity then I do not think terming them "evil" is correct.
I do not think our dependence on them is going to reduce because market will not like to reduce the liquidity.

[Perunex]

They are good for the market atm. They give some stability on this volatile market af. Atm, of course as the market is still very much immature and at early stage. Once the market develops and one other actual cryptocurrency (probably BTC) develops in a way that it will be big enough to be stable, then we will have no need for stablecoins.

[Zadicar]

"Fiat-backed stablecoins are therefore rarely actual cryptocurrencies, which causes them to inherit their main characteristics and shortcomings from the centralised banking system. Ultimately, they function in the same manner as fiat, backed by what amounts to an IOU."

Danial Daychopan wrote a short article linked below that has got me thinking. Are stablecoins bad for the cryptocurrency ecosystem because they are essentially fiat in digital form, or are they beneficial as they provide stability in an extremely volatile market? Curious to hear your thoughts, give it a read and let me know your angle on it.

https://medium.com/@DDhopn/stablecoins-3b93b4f1ddc5

In the beginning there was only Tether. And it was enough for everyone. As you already know, the bull from 2017 was also very effective. But the obvious mistakes they made came here. Today, the number of stablecoins on the market is increasing day by day and I am not sure how much they are necessary anymore.

Tether is already enough and considerable but when another stablecoins out in the market it already pisses me and questioning why these coins popping out yet
it isnt really necessary for them to be used. One stable coin is enough but more than that has no sense at all.Stable coins might oppose or fully contradict crypto system but we cant
deny on the fact that this coins are useful for fast conversion to secure out or save out yourself from volatility.

[mk4]

It depends. There's this stablecoin, DAI, from the MakerDAO platform, that isn't backed by fiat, but is actually backed by ETH(and will have an option to be backed by BTC in the future). Tether(USDT) though? Well, that's another topic. We really don't know for sure if USDT is actually really backed by fiat in banks; which is very scary in my opinion, as they can definitely easily abuse their power.

[shield132]

To my mind stablecoins are good at some point, for example imagine Monero with stable price. This way you won't have to worry on price movement if anonimity and privacy is important for you rather than profit from holding/trading cryptocurrencies. This means you have analogue of usd but with crypto opportunities, doesn't sound bad to my mind. I don't talk about tether and etc.

[pawanjain]

"Fiat-backed stablecoins are therefore rarely actual cryptocurrencies, which causes them to inherit their main characteristics and shortcomings from the centralised banking system. Ultimately, they function in the same manner as fiat, backed by what amounts to an IOU."

Danial Daychopan wrote a short article linked below that has got me thinking. Are stablecoins bad for the cryptocurrency ecosystem because they are essentially fiat in digital form, or are they beneficial as they provide stability in an extremely volatile market? Curious to hear your thoughts, give it a read and let me know your angle on it.

https://medium.com/@DDhopn/stablecoins-3b93b4f1ddc5

If we see it from this perspective then I guess stable coins are necessary to be present in the crypto market. Just think about it in this way, when the market is too volatile and the prices are going down, you will need a stable coin to save your investment because if the coin is not stable then your portfolio will have significant decrease anyway. So in order to keep the investment safe we do need stable coins like tether which are backed by fiat currencies.

[talkbitcoin]

Stablecoins are necessary but only if they were decentralized. we are in a decentralized world after all and we should avoid any kind of centralization in this world which will include using centralized altcoins, stable coins, exchanges, wallets, payment processors,... so far we have alternative to all of these that are decentralized too but people have to always get bitten and lose a lot of money in the centralized sector before they start looking for a solution. which is why centralized things are still at large!

[dothebeats]

It's a compromise traders have to agree with in order to safeguard their assets if they want to spend a day or two not doing anything or transferring funds in between exchanges/platforms. The controversy only arose since Tether cannot really show its assets amounting to every USDT they have printed, and so some people have questioned whether they are being true to their claims or not. I don't think stablecoins are really a necessity in the whole of cryptomarket, but rather an optional feature/token that people can use if they want a temporary hedge against the market's volatility.

[xWolfx]

I honestly feel that stablecoins like Tether etc are indeed a necessary evil. They do pose problems for the cryptocurrency market(Tether controversy etc), but they will still be in demand as long as the market is extremely volatile.

Once the volatility lowers in the long term, the demand for these coins will most likely fall which is why they are a necessary evil at present.

I disagree. People can release all the coins they want obvious but they are not really necessary at least from a progressive point of view more than an economic/profit/greed one.

Bitcoin will be stable in the future too, but a long time is still ahead of us for that to happen. They are not necessary at all. Now, the people who want to profit from them i wish them luck, i hope it goes well. For my part i won't invest in them in the future.

[Pursuer]

"Fiat-backed stablecoins are therefore rarely actual cryptocurrencies, which causes them to inherit their main characteristics and shortcomings from the centralised banking system. Ultimately, they function in the same manner as fiat, backed by what amounts to an IOU."

I disagree, they don't function similar to fiat at all!
while fiat is being printed by the government and banks and they run the show, that gives fiat a very good level of security. for example if you are using USD you know that tomorrow morning USD is not going to be wiped off the face of the earth.
in comparison centralized stablecoins are controlled by a company that may not even be legal not to mention that when they "print money" it is not allowed in most countries around the world. so you can and probably will wake up one morning to see them disappear. that means they are not secure at all.

Danial Daychopan wrote a short article linked below that has got me thinking. Are stablecoins bad for the cryptocurrency ecosystem because they are essentially fiat in digital form, or are they beneficial as they provide stability in an extremely volatile market? Curious to hear your thoughts, give it a read and let me know your angle on it.

no they are bad because they are centralized. if they were decentralized then it was an entirely different story.
as for their benefits, if you are only using them for trading for example to transfer funds from one exchange to another with a lower fee compared to transferring fiat, or if you are using them in an exchange that  does not have fiat market but you want to temporarily exit that coin and go to a fiat like coin that keeps its value then they are good but other than that usage of them is a very bad idea.

[okala]

I prefer security tokens to stable coins because of the involvement of the centralized financial institutions in the operation of the stablecoin, and at that the stable coin will not offer any thing new from the traditional centralized mode operation which lack anonymous and decentralization/ freedom from third party involvement from either the bank or government.

[manok jepang]

This is where stablecoin plays a role, Stablecoin cryptocurrency that gets more appeal has a much more stable value than normal cryptocurrency. This is because the value is pegged to other assets such as US dollars or gold. Stablecoin on the other hand, utilizes the benefits of cryptocurrency such as transparency, security, eternity, digital wallet, fast transactions, low costs, and privacy without losing the guarantee of trust and stability that comes using fiat (such as US) dollars or Euros.

[maianh09]

Stablecoins attracted a lot of investor interest because of its stability as FIAT and received support from FIAT. But if Stablecoins don't have big exchange floors and attract investors, it will become Shitcoin, and the price will fall sharply.

[Artemis3]

I honestly feel that stablecoins like Tether etc are indeed a necessary evil. They do pose problems for the cryptocurrency market(Tether controversy etc), but they will still be in demand as long as the market is extremely volatile.

Once the volatility lowers in the long term, the demand for these coins will most likely fall which is why they are a necessary evil at present.

They are especially useful if you live in a country where you don't get free access to those fiat currencies which is nearly none in this world, but for those unfortunate souls that have to live under the oppression of a socialist economy, they are indeed quite useful, if only for trading inside an exchange.

Ironically i have found them unsuitable for normal coin use, what with them needing a second crypto just to pay fees. Most of them need to pay tx fees in Etherereum, which is a big letdown for regular use.

I mean, if you are going to bother having to fill your wallet with both Ethereum and, say, usdc, why not just stick to ETH alone? Sure its safer to use someone else's big blockchain, but you must admit its a major inconvenience, unless you went and teach everyone how to use a token with its parent coin; or worse, tell them to use the online wallet of an exchange that "magically" hides these fees (in another coin) from them.

[gentlemand]

No.

They either turn out in two versions - total obfuscation like Tether where we have no idea whether there's any actual money behind them, or you have the legitimised ones that are so uptight they'll cut you off from your ability to redeem them if they think you've been spotted on Chaturbate.

If you want to park money in a stable form go to an exchange with real fiat and park it there. There's plenty of them and the barriers to entry are no higher than alt only places.

[mk4]

No.

They either turn out in two versions - total obfuscation like Tether where we have no idea whether there's any actual money behind them, or you have the legitimised ones that are so uptight they'll cut you off from your ability to redeem them if they think you've been spotted on Chaturbate.

If you want to park money in a stable form go to an exchange with real fiat and park it there. There's plenty of them.

I think one of the reasons why people use stablecoins instead of exchanging to fiat on exchanges is that it's either:

• They don't trust their local currency
• They don't trust the exchange

And I really can't blame them to be honest; due to the lots of exchanges fiascos in the past. Though I'm really not sure if storing your money on stablecoins is any better. Personally though, I'd rather leave my money on DAI(a lesser known stablecoin); even though the price is fluctuating a lot between $.97-1.01. Which is a downside I'm willing to take compared to holding the more centralized stablecoins like USDT. I know a good number of people will disagree with me, but yea.