Trust is the biggest issue with cryptocurrency. I can trust my bank + the government to keep my money safe. As has been repeatedly demonstrated, I can’t trust an exchange and keeping your own wallet is extremely risky.
I can't trust the price of BTC to drop to $0 when speculators panic.
I can't trust that my BTC will be accepted if it was once tied to a money laundering (mixer) address.
I can't trust that I will not be rug pulled on any new coin unless I read the fine grained software contract, first.
I can't trust a software contract from being hacked unless I can hire a software contract expert to peruse it, and hope he's ethical, and won't exploit any holes in the contract for his own gain.
Tether is one of the weakest stablecoins in terms of regulatory compliance and general community trust.
In other words, most arguments I hear against stablecoins apply narrowly and specifically to Tether, yet people tend to use those valid arguments against Tether to straw-man the entire asset class. Popularity and volume have nothing to do with that.
"Reputational Risk" is a term bandied about in the banking industry when it comes to holding people's money.
While USDC does indeed look better, the management failure of holding corporate bonds in lieu of treasuries and dollars would have triggered an audit in a bank, and would have been big news.
> I can trust my bank + the government to keep my money safe.
That's not true everywhere. I live in Argentina and people prefer to have dollars in cash in their houses rather than leaving them in a bank. A few years ago, in 2001, the government took the dollars from the banks and gave them pesos for a lower value. Most banks went broke and people lost their savings and the ones that didn't, gave pesos to people making them lose 75% of their savings. I know similar things happened in other countries too.
Crypto kind of solves that issue. I know some people who prefer to save in DAIs than keep dollars in the bank.
Which country do you live in? My Government abused my trust big time. Over the last 10 years, it doubled the amount of money. And thereby halved my stake in the countries buying power.
And regarding trusting a bank: In my country there was a bank with a $15B market cap that did not really posess the money they claimed they posses.
> I can trust my bank + the government to keep my money safe.
Trust them to keep your money – yes, you can absolutely rely on that.
Trust them to have “your” money back – that’s a taller order. But it it will be safe, sure.
At least with cryptocurrency you don’t have to keep it at an exchange, while the governments are pushing for abolishing cash and keeping all the money in banks.
I don't know where this idea that governments want to abolish cash comes from. The crypto-world loves to bandy this about, but in reality a HUGE portion of the people still transact constantly in cash. Granted in the US only about 10-15% of people are "cash-only," but 85-90% use cash daily. Cash isn't going anywhere anytime soon, no matter how great Starlink gets, no matter how much Illuminati-conspiracy the Internet dreams up, electronic only money is a pipe dream in the foreseeable future. Maybe in another 50-100 years? Who knows.
The dollar lost 99% of its value in the last 100 years. Eventually folks will wake up and not want to earn or accept money that melts away so quickly. It should take a lot less than 50y at the rate of print.
We could make them one and the same thing with a stroke of legislative pen. Just because current laws do not manage X new thing correctly, we should not conclude X new thing is terrible.
And that's the most important thing crypto enthusiast always deny or fail to comprehend, it's like famous https://xkcd.com/538/ most enthusiasts do not accept that the blockchain will became unmanageable by most just due to it's ever-growing size. At that point exchange will be mandatory by nature and at that point users will have no more viable means to verify anything.
The very same old scam banks have made in the '300 invented bank notes to be exchanged instead of gold...
And probably that is the real reason behind crypto: some Bug&Powerful in the IT decide that's about time to kick out banks substituting them with something that's the same but in other hands and safer for the real master, BTW It's not just me saying that but also the Geneva Report 2019 "Banking Disrupted?" [1]. Unfortunately I fear most will not understand in time and actual IT "pseudo-free but still some freedom is possible" will be long gone...
> most enthusiasts do not accept that the blockchain will became unmanageable by most just due to it's ever-growing size
Some blockchain protocols like Bitcoin make the silly argument that in order for a chain to be worthwhile, a full history of all transactions needs to be maximally available on the network.
Other chains either drop, or plan to drop data that's been on the network for over a year or so (EIP-4444, for Ethereum). This relies on the weak assumption that the consensus algorithm will not finalize invalid data and then continue to build on it for over a year.
When you take history expiry alongside state expiry, the technology is absolutely out there to bound blockchain size.
So, hackers remove your money or exploit an error in your smart contract, the history is there, okay. Then the data and transaction history is dropped. Yup, the "<magic buzzwords>" tells you that history is correct. So?
Yes, losing access to the underlying data is a big downside.
I think the ideal blockchain should offer constant time historical verification in addition to rather than as replacement of verifying the tx history. That also makes it robust against possible bugs in the design and implementation of the rather complex IVC technology.
Even if IVC is the only way to verify the full history, then it could still be limited to older history, e.g. up to a week or month ago. That would give you some time to investigate recent hiccups.
I'm talking about the data availability requirement that the protocol imposes on nodes if they want to remain connected to the swarm. I'm not sure what you're talking about - data doesn't magically get deleted from the internet with "no trace".
> Data doesn't magically get deleted from the internet with "no trace".
This is what you said, emphasis mine: "Bitcoin make the silly argument that ... a full history of all transactions needs to be maximally available on the network. Other chains either drop, or plan to drop data that's been on the network for over a year or so".
I'm reading exactly what you wrote. I don't know, may be the meaning of words in crypto world is "wrong".
There's a wide spectrum between a piece of data being maintained by every participant of a particular blockchain and maximally available, and that data being completely unavailable to anyone.
It's that spectrum between 0-of-N and consensus-enforced N-of-N that you don't seem to grasp.
I'll say it again, once a piece of data is no longer maintained by all N-of-N participants in a blockchain as a matter of its consensus protocol, that doesn't mean that the data gets automatically deleted from the internet and from everyone's hard drives. On the contrary, there are many reasons why particular actors would want to retain that data, one of which is the very thing we are discussing - to keep a transaction history in case old transactions need to be audited for potential criminal prosecution of $625-million exploits.
> Other chains either drop, or plan to drop data that's been on the network for over a year or so
Yes, the chains, i.e. the actors that are keeping the minimal amount of data to continue to participate in the protocol, drop that data. That doesn't mean the data disappears from the internet. Instead, data availability is likely to remain incentivized within dedicated sub-protocols. That's not to mention the numerous private entities that will have their own external incentives to retain that data. Quote from Vitalik:
> Older blocks, transactions and receipts/logs would still be accessible through dedicated sub-protocols (eg. the Portal Network) or externally developed protocols (eg. TheGraph), in addition to a much smaller but still sufficient number of volunteer nodes and block explorers. Note that many dapps are already moving their historical data queries to TheGraph and similar protocols for efficiency.
Right, I never said you can trust exchanges. You do not have to use an exchange. That's the whole point of the decentralised nature of cryptocurrencies.
The idea that ordinary people will (reliably, securely, safely) manage their own cryptocurrency holdings without using an exchange (or similar service) is ludicrous. This is blind techno-utopianism at its worst, and does nothing for humanity or society.
I can't trust the price of BTC to drop to $0 when speculators panic.
I can't trust that my BTC will be accepted if it was once tied to a money laundering (mixer) address.
I can't trust that I will not be rug pulled on any new coin unless I read the fine grained software contract, first.
I can't trust a software contract from being hacked unless I can hire a software contract expert to peruse it, and hope he's ethical, and won't exploit any holes in the contract for his own gain.
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