In general people are critical of ideas that are new. HN has an especially critical user-base with technical skills, so attacks can be made on a larger surface area.
1) Blockchain is not "new". It's 10 years old. We went through the hype cycle for it. The thousands of software engineers and mathematicians on HN have had time to assess.
2) HN is for more accepting and enthusiastic about new ideas than the general population.
This is an interesting project. The big question for Maker is, will decentralized governance work across the life cycle of this product? The nightmare scenario for a stablecoin is volatility, and governance in this space have historically resulted in volatility.
>There's one remote reason I can think of that people would flip to stablecoins vs fiat if they had some tax view that that wasn't a constructive sale and it could benefit from some likekind kind of treatment since its a "crypto" and not a "fiat". It's obviously a silly argument and there's no way the IRS would fall for it (nor do they even accept it between regular cryptos) but i can't speak for other jurisdictions.
The IRS have already made explicit that crypto to crypto is taxable and treated as capital gains/loss. Some stay in stablecoin so that they can be more liquid in the ecosystem. Simply, there are more exchange pairs for stablecoins, and some stablecoin allow storage in personal hardware wallet rather than exchanges.
The few reasons to use blockchain at this time is to maintain an optic of trust: that even if you don't fully trust the provider of the token, you can trust the transparency provided by the technology. My judgment is that FB is positioning itself to be ready for when or if the space finds its "mosaic" moment. Otherwise, it is still an investment in a novel tech that is already proven useful for money transference; large sums of money have already been put up by the sector to mitigate and update regulatory risk and compliance.
Proof of stake is a solution to both the mining problem and scalability. Proof of stake, from a hardware perspective means professional machines being wholly dedicated to block production. This filters out smaller market participants who host nodes. This centralizes the network a bit, but not enough to make it not state power resistant. The trade off is enough scalability to fit current demand, and better and more efficient service as a global open computer. The bet of proof of stake vs work is really how much do we think states can influence the meme of blockchain’s uncheatable ledger, and if increases in performance is worth the risk. Either, due to the open properties of blockchain, we’ll likely see both situation play out in the open market.
I've been thinking a bit on this idea - the idea of a cryptocurrency, this network of value going down to zero and if its even possible. I have one example: Bitconnect. https://coinmarketcap.com/currencies/bitconnect/
This currency us a classic scam. They listed a 1% guaranteed daily interest on investment. Every notable and rationale person can take a look at bitconnect's offering and can see it's a scam/ponzi, or at least, something that's too good to be true.
The price peaked $400+ with a market cap of over 2 billion.
After regulatory intervention, the price dropped off a cliff. Of all the tokens to go to zero, one should expect an exposed scam token to be there. But that didn't happen. It dipped all the way down to around $8 and started recovering.
During the current dip in crypto market prices, bitconnect is still sitting at 2.63 with over 24million in market cap.
Why is this scam token not at zero?
There's something interesting at play here. Factors may include the reporting of market data, the markets themselves exchanging this token, and token hodlers who will not sell.
I wonder if there are other factors that's novel to crypto technology. Possibly something associated with the network effect of these crypto tokens, the proliferation and effects of memes, or the natural of decentralization.
It may simply be that something like this take time to go to zero. In any cases, it seems to be quite interesting the market dynamics of these tokens.
In general, risk is proportional to reward. Your given risks and many more repel more professional traders and arbitragers, therefore allowing the above stock market margin of profits.
