
Can stablecoins live up to their name? - jkuria
https://www.economist.com/finance-and-economics/2018/10/20/a-new-form-of-cryptocurrency-promises-to-defy-financial-gravity
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rlucas
In a word, no.

To have a usable, stable exchange rate into something (other than a related
cryptocurrency), there must be another party who stands willing to buy and
sell the thing at that pegged rate.

Read up on the history of currency pegs. Generally speaking, even with the
best efforts of nation-states with millions of citizens, actual gold mines,
and literal armies, maintaining a peg is a fool's errand.

~~~
londons_explore
> there must be another party who stands willing to buy and sell the thing at
> that pegged rate.

Most stable coins claim there is. For example, Tether claims that they hold
equal US dollars for Tethers issued. If true, they would be in a position to
be able to buy or sell at the pegged rate and never run out of either dollars
or Tethers (since they can be manufactured).

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anonytrary
The title is clickbait.

TLDR: Gotchya! This is a Stablecoin 101 article. Stablecoins on an exchange
are pegged to a certain value via algorithms and you park your money there
temporarily so you don't have to cash out in fiat in order to avoid
volatility. Some stablecoins are known to have lost their peg, so be careful.

~~~
ioniosdaionio
They don't all work the same way. Some, like Tether, claim to be fully backed
by USD. But it's similarly unstable and is spectacularly shady.

~~~
h1d
The smoke is already going up when, right now Tether has been at a value of
$0.95 for more than a week and Bitfinex who is likely to be behind the Tether
corp has its Bitcoin price above 5% above market average.

Reminds me of MtGox when it its price was going off the rest of the market
until collapsed.

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adamnemecek
Crypto currencies have created something called triple entry accounting.
Double entry accounting, invented in Florence in 1300’s has enabled debt which
is the reason the city flourished. I wonder what does triple accounting
enable?

~~~
MR4D
Can you elaborate on how double entry accounting enabled debt?

Debt existed way before Pacioli invented (borrowed?) double entry accounting.

For instance, in the Bible, Proverbs 22:7 - “The rich rule over the poor, and
the borrower is slave to the lender.”

~~~
pdkl95
Debt existed several thousand years before _money_ was invented[1]. Regarding
the bible's many references to debt: note that it doesn't talk about
_inventing_ debt. The concept of debt - and the problems it creates - were
already commonplace enough that for priests to add social commentary about
debt into religious texts. Predating the book of Proverbs by ~700 years,
Leviticus 25:8-13 discuses the concept of a "Jubilee" every 50 years where
slaves/prisoners were freed and _debts were forgiven_.

Double entry bookkeeping was a great idea that expanded many aspects of
business and finance because it was a type of _error detection_ for complex
accounts that could be done - in the era before calculating machines - by hand
using _only addition_.

[1] See David Graeber's writings/talk for a good overview of the ancient
history of debt and the invention of early forms of money from the need to
standardize debts/payments/etc.

