Are stablecoins a betrayal of Bitcoin's values - a trojan horse for adoption?
Allen Farmington thinks the latter.
Read_887 offers a deep dive into the incentives shaping monetary infrastructure - and what happens when fiat settles on Bitcoin rails.
🔗 https://fountain.fm/episode/DsJfhL0gIuqJMeg4HSFc
But what do YOU think?
You'll have to listen to the Guy's Take at the end to find out 😘
I never understood the overthinking and analyzing of stablecoins. They are dollars on different rails that people outside the US can access.
That's just a taste of what it would look like having actually free markets. There would be a lot worse (and better) shit in such a world. Better get used to it now. Bitcoin will have competitors.
Kind of a no-brainer. When your slogan is “never sell your Bitcoin”, you have to spend something…
Although they won’t settle on BTC rails. That’s a recipe for disaster.
Intially it will increase worldwide dollarisation.
It will also allow all people to accept Bitcoin & instantly exit for a widely accepted USD derivative.
Ironically allowing for an easy Bitcoin exit, will further accelerate Bitcoin adoption in the long term. It's so counter intuitive to their fiat minds, they won't see what's happening until it's too late.
Aren't they useful to buy Bitcoin with?
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Allen firstly can't thank you enough for writing this. For some silly reason I still work in Tradfi and you really helped me think through the stablecoin endgame for banks and the inherent incompatibility with FRB.
Question to both of you - can you elaborate on how taproot assets theoretically solves issuer network lock in?
Let's use the example of someone sending USDC and the recipient settling in USDT.
I'm guessing it would be a matter of sufficient liquidity of both assets in the channel/s to allow the swap to take place? Would the recipient wallet deal with this via the LN invoice?
I'm not super technical when it comes to lightning. Would love to understand how this works in practice.
The swap occurs directly over lightning. Both respective fiatcoins have to have liquidity (but the sender and receiver are basically the liquidity in this case) and to the lightning network, and even to each user, which currency at the beginning or the end is irrelevant. The payment is being settled in sats and converted on both ends.
It’s less taproot assets specifically, and that you can send these assets over the Lightning network for settlement.
Right now if you have tether and want to pay me, I HAVE to accept tether, or you have to go to an exchange, make an account, and swap it to USDC, and you hen download and install a USDC wallet to send that to me instead if I want to receive it. Which nobody is gonna deal with, they will simply use Tether/USDT for the sake of simplicity. So there’s huge lock in, similar to “CashApp users can only send money to CashApp users.”
However, as taproot assets, the swap to sats in a Lightning invoice is built in. So as long as the sender and receiver agree on the value (which is just the invoice amount), I can “zap you” USDT and I don’t even have to know or care what you receive it as. You could just be taking the sats, USDC, ruble coin, yuan tokens, some bitcoin based shitcoin, who cares? That’s simply your choice and the thing actually transmitting the value, is BTC. It becomes this bridge, and ironically kinda becomes this “any currency to any currency DeFi system” without needing a coordinator, or stupid blockchain, or order book, or ETH VM, or any of that garbage. It just needs a sender and receiver and simple agreement on the value to exchange. It’s the nodes at the edge run by tether or some bank or Coinbase or whatever that need to build liquidity to accept their token and forward sats that creates a foundation for this, and after that bootstrap, the barriers just kinda fall away and there’s less reason to use any specific stablecoin/fiatcoin instead of any other simply due to how much it’s used, but instead you would use specifically what you *trusted.*
