DETERMINATION OF A SAFE STABLE COIN: What should newbies do?

[asawale]

Stable coins have been the saviour and one of the banes upon which trust in cryptocurrencies mostly the altcoins rely on over a long period of time. A stable coin enables crypto investors to convert their coins into dollars without the bothering of withdrawing in FIAT currency form. This singular act has helped to increase the number of investors into cryptocurrency and also encouraged huge funds to flow into cryptocurrency investments.

Now that these major stable coins are losing their pegs to one dollar value, what should is the hope of the newbies in knowing the right stable to convert his funds to in the time  price falling in cryptocurrency to stop loss?

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[pooya87]

Stable coins have never been good and have never really helped cryptocurrencies like Bitcoin. What they mainly did was to help short term traders get in and out of different altcoins and even between exchanges quickly. Otherwise we always knew that even the biggest stablecoins are too risky to use considering how centralized and mostly shady they are. They can even freeze your coins any time they want: https://bitcointalk.org/index.php?topic=5204055.0

[Cuenta Alternativa]

The best thing for newbies to do is to focus on bitcoin and leave the rest of the alts alone. First study bitcoin to know what it is and make a reasoned decision on whether to buy it.

Specifically on stablecoins, I would add to what the colleague said that they are especially targeted by the authorities, as they are in direct competition with fiat and CBDCs. I believe that in the future there will be no stablecoins apart from CBDCs or they will be of residual use. Seeing what has happened to several stablecoins recently, I don't think it is worth using them to try to avoid volatility. If you buy bitcoin you already know it is volatile, and it is better not to do short term trading, as being a newbie you are likely to lose money.

[Jawhead999]

If you want to hold a stable currency but you're worried stablecoin price will depegged from it's collateral, your option is convert it to your fiat. If you want to hold USD, then it's will be time consuming since you need to use a digital wallet or payment option which receive USD.

I believe that in the future there will be no stablecoins apart from CBDCs or they will be of residual use.

Or the stablecoin will change become CBDC in order to save their project, CBDC should be similar with fiat where there's an institutions will insure your funds, unlike stablecoin.

[Pmalek]

A stable coin enables crypto investors to convert their coins into dollars without the bothering of withdrawing in FIAT currency form.

It gives you the impression you are holding dollars, but you are holding a digital token pegged to the value of dollars. As some examples have shown, that token is only temporarily pegged to the dollar.

If you want to hold a stable currency but you're worried stablecoin price will depegged from it's collateral, your option is convert it to your fiat.

Fiat creates other potential worries. If we are talking about big sums of money, your bank will want to know the source of the funds. Your tax office will want their fair share. Some crypto users might not know how or want to explain how they got into possession of such wealth all of a sudden.

[Jawhead999]

Fiat creates other potential worries. If we are talking about big sums of money, your bank will want to know the source of the funds. Your tax office will want their fair share. Some crypto users might not know how or want to explain how they got into possession of such wealth all of a sudden.

If the user doesn't did any bad thing, I don't see any reason not being honest with the source of the funds and as a citizen we need to pay tax to the country where we live, we have use the facilitation in our country and evading tax in order to maximize your profit isn't a good idea.

I understand in this space privacy is really important, but I'd say maximizing the privacy feature of Bitcoin in order to evading tax is illegal.

[Pmalek]

<Snip>

It's not only about avoiding to pay taxes. It's the complicated process, paperwork, and bureaucracy that makes people not want to do it. You are going to make my life difficult because I use bitcoin? You are going to have your bank buddies investigate me or lock my accounts? You are going to do everything possible so I can't buy my BTC, only to put your hand out if I make some money and say, 15%, hand it over?! In that case, grab the trunk-looking organ under my belt and pull it a bit to get your reward you low-life governmental ass juice. Not your personally btw
 
For example, You are wearing a signature under you name. You are providing a service and getting paid for it. That's taxable. I seriously doubt that even 1/50 people have asked their local tax offices how that particular situation works, when do they need to declare that as income, how and when.

[Rikafip]

Now that these major stable coins are losing their pegs to one dollar value, what should is the hope of the newbies in knowing the right stable to convert his funds to in the time  price falling in cryptocurrency to stop loss?

First of all, there are no safe stablecoins and sooner newbies realize that, the better. Stablecoins can depeg, they are not even properly collateralized in 1:1 ratio and  worst of all, issuers can freeze them even if they are in your own non-custodial wallet so why do you think that newbies should look for safety in those?

Regarding what newbies should do in this situation, an answer is obvious: bitcoin.

[cryptoaddictchie]

Now that these major stable coins are losing their pegs to one dollar value, what should is the hope of the newbies in knowing the right stable to convert his funds to in the time  price falling in cryptocurrency to stop loss?

Not losing their peg at all. Well some of other users were panicking and selling their stables now but for me this is just a temporary situation. We all knew that traders need these stable to use on so much buy and sell hence the market will need these volatility.

If they are gonna be scared of stable devaluation then just convert it all on bitcoin a truly decentralized space.

[Chilwell]

Stable coins have never been good and have never really helped cryptocurrencies like Bitcoin. What they mainly did was to help short term traders get in and out of different altcoins and even between exchanges quickly. Otherwise we always knew that even the biggest stablecoins are too risky to use considering how centralized and mostly shady they are. They can even freeze your coins any time they want: https://bitcointalk.org/index.php?topic=5204055.0

This sounds so scary, so now someone have to becareful of holding any stable coin again, this fallen of a thing had happened to me during the time of luna, I felt sorry for myself and decided to give up not to buy any coin again. Thanks for sharing this for us.

[NeuroticFish]

This sounds so scary, so now someone have to becareful of holding any stable coin again, this fallen of a thing had happened to me during the time of luna, I felt sorry for myself and decided to give up not to buy any coin again. Thanks for sharing this for us.

(Especially) the stable coins that were/are pegged to fiat were not really meant for holding. They were the tool for arbitraging and not much more, because they historically pretty much always had trust (and proper backing) related issues. One big point of crypto should be to trust math, not people (nor businesses); stable coins don't follow that.
So it's not that much about "careful of holding any stable coin again", it's more about being careful about holding stable coins at all.

[Dr.Bitcoin_Strange]

Stable coins have been the saviour and one of the banes upon which trust in cryptocurrencies mostly the altcoins rely on over a long period of time.

Wrong, Stable coin is almost the same as the altcoins you trade, which could still depeg at any time, and perhaps if you put full hope in it, you can get disappointed should the project (crypto company) have any arising problems.

Almost every altcoin has USDt trading pairs, and I see that USD, EUR, and YEN are fiat that can stay stable with full trust better than some stable coins because if there is any threat or serious issue in the market that concerns the price of fiat, there are usually news stories to warn people, but most stable coins can just get a threat and decide to block or disable the withdrawal of the intended stable coins. Instead of conversing with any random stable coin, it is better to convert to Fiats, you can convert to fait without withdrawing.

A stable coin enables crypto investors to convert their coins into dollars without the bothering of withdrawing in FIAT currency form.

You must not convert to a stable coin before fiat; like I said previously, some altcoins have USDt trading pairs, from which, after training your altcoin for USDt, you can withdraw directly.

This singular act has helped to increase the number of investors into cryptocurrency and also encouraged huge funds to flow into cryptocurrency investments.

Instead, it has cost some investors their funds as well. Are you aware of the fall of Tera Luna? That's a good example of the issues that stable coins can face.

Now that these major stable coins are losing their pegs to one dollar value, what should is the hope of the newbies in knowing the right stable to convert his funds to in the time  price falling in cryptocurrency to stop loss?

Depending on the DEX or CEX the person is dealing with, they can trade to fiat like USDt and avoid any other stable coin.

[Lucius]

~snip~
First of all, there are no safe stablecoins and sooner newbies realize that, the better. Stablecoins can depeg, they are not even properly collateralized in 1:1 ratio and  worst of all, issuers can freeze them even if they are in your own non-custodial wallet so why do you think that newbies should look for safety in those?

It seems to me that someone is playing with words in a game where everyone believes everything, until the moment everything goes downhill. The word "stable" is perhaps one of the biggest hoaxes when it comes to cryptocurrencies, and there's no doubt that it was sold very well by people who literally made their own currencies out of nothing. If you look at the statements of powerful politicians in the US and the EU, to all of them stablecoins are a far greater threat than Bitcoin and all those tens of thousands of altcoins.

After that whole circus with Terra/Luna, I really thought that people would wise up and move away from stablecoins, but it seems that the exact opposite is happening.

~snip~
For example, You are wearing a signature under you name. You are providing a service and getting paid for it. That's taxable. I seriously doubt that even 1/50 people have asked their local tax offices how that particular situation works, when do they need to declare that as income, how and when.

I believe that people would be much more inclined to pay tax on that type of income - but according to my law, I would have to file a report every time I receive a payment, which means every week of the year. I don't know if anything has changed since the beginning of the year in this regard, but not only is it a big waste of time, but it can also be a threat to my personal safety, given that people like to talk about things that should be an official secret.

[Xal0lex]

There is no 100% right decision here, although USDT almost always performs better than all of the stablecoins. In any case, no matter how reliable this or that stablecoin is, you should always remember about diversification, keep your savings in different stablecoins. This way, you can avoid significant losses related to de-peg. It is simply unreasonable to rely on just one single stablecoin, because not a single stablecoin in the entire history of their existence has given a 100% guarantee, there have always been some small drawdowns.

[bitbollo]

a stable coin has exactly all the negative aspects of fiat coins and cryptocurrencies (centralized, inflatable, lack of privacy, etc etc). bitcoin was created to avoid all these problems.
serious question, why focus on fiat stable coins when the real stable coin...is bitcoin!?

[Rikafip]

After that whole circus with Terra/Luna, I really thought that people would wise up and move away from stablecoins, but it seems that the exact opposite is happening.

Even if same things happened to Tether (which would have much bigger consequences to the market than fall of UST had), I don't think that situation would change much. If anything, someone would come up with another ingenious way of even less stable "stablecoin".

I believe that people would be much more inclined to pay tax on that type of income - but according to my law, I would have to file a report every time I receive a payment, which means every week of the year. I don't know if anything has changed since the beginning of the year in this regard, but not only is it a big waste of time, but it can also be a threat to my personal safety, given that people like to talk about things that should be an official secret.

I haven't reported my earnings via signature campaign yet so I am not exactly sure how it works, but wouldn't you have to file a separate report each week only if you were cashing out every time you get the signature money?

[Pmalek]

I believe that people would be much more inclined to pay tax on that type of income - but according to my law, I would have to file a report every time I receive a payment, which means every week of the year.

Exactly. They don't make it easier for the payers. Their rigid and ill-conceived rules expect you to pay your tax within a day or two of receiving your signature payment, and then run to your local tax office a few days later, stand in line, and submit the paperwork. I am supposed to skip work every week to to that? Yeah, right.

serious question, why focus on fiat stable coins when the real stable coin...is bitcoin!?

Bitcoin is stable only in your dreams.

[Lucius]

Even if same things happened to Tether (which would have much bigger consequences to the market than fall of UST had), I don't think that situation would change much. If anything, someone would come up with another ingenious way of even less stable "stablecoin".

Some new way is certainly an option, people are inventive when it comes to creating value from nothing. However, if someone decided to seriously consider the guys behind USDT, we are talking about the current value of over $72 billion tokens, for which no one can say with certainty whether they are backed by anything, least of all USD. The fall of that system would be what the Americans call a clusterf*ck, and the definition is certainly not something we want to experience.

I haven't reported my earnings via signature campaign yet so I am not exactly sure how it works, but wouldn't you have to file a separate report each week only if you were cashing out every time you get the signature money?

If something hasn't changed, then it's exactly as @Pmalek confirmed. As far as I know, if you are employed, what you get from signature campaigns should be declared as other income and reported every time you receive a payment. I'm pretty sure it has nothing to do with the income tax you pay if you sell crypto, but with the income you get from some extra work. However, it is best to seek a professional opinion.

[jeraldskie11]

serious question, why focus on fiat stable coins when the real stable coin...is bitcoin!?

Bitcoin is stable only in your dreams.

I agree. Bitcoin is not created to have the price stable. Bitcoin is the first cryptocurrency ever created. So if it is only created to be a stable coin meaning there's no difference in fiat, there's no sense of creating it. Even though Bitcoin make transactions fast and easy without being worried about the high fees from the bank, we can't deny that people start getting interest in Bitcoin because it can make them rich if they invested in it.

[Rikafip]

As far as I know, if you are employed, what you get from signature campaigns should be declared as other income and reported every time you receive a payment. I'm pretty sure it has nothing to do with the income tax you pay if you sell crypto, but with the income you get from some extra work. However, it is best to seek a professional opinion.

Hm good point, for a moment I forgot that signature campaign payment is seen as 2nd income. I think I'm gonna ask it in the taxes thread in our local board since there is our guy there that knows this crypto taxes stuff inside&out. Not planning to report it though, it will be just for academic purposes.