[Aurornis]

YC, like most incubators, has always encouraged their companies to use products and services from other companies in their portfolio.

The simplest explanation is that this is a mostly symbolic move: They want to show that the stable coin and crypto companies they invest in are actually trusted by YC. It starts to look hypocritical if an investor is funding crypto companies and praising them as important breakthroughs, but not actually using them where it’s important.

[latexr]

> YC, like most incubators, has always encouraged their companies to use products and services from other companies in their portfolio.

Advising unproven risky businesses to depend on other unproven risky businesses? Doesn’t that just increase the likelihood that something goes wrong?

[Aurornis]

> Advising unproven risky businesses to depend on other unproven risky businesses?

Read carefully: They’re not actually advising that startups prefer it. They’re allowing it as an option.

It doesn’t mean that it will actually be used. They just don’t want to appear like they’re avoiding the companies they’re funding. It’s a bad look.

[latexr]

I think you are confused. I don’t care about the announcement, I’m specifically addressing a point from my parent comment, which I quoted. Again, this time with emphasis:

> YC, like most incubators, has always encouraged (…)

“Encouraging” means advising, advocating for, not “allowing as an option”. I don’t know if YC really does that, but that’s the conversation. It’s about the claim made in a comment, not the submission.

[Aurornis]

Re-read what I wrote: The "encouraged" was about past use of other products, to provide context. I wasn't claiming they encouraged the use of stablecoins. I was adding historical context to the move.

[latexr]

> The "encouraged" was about past use of other products, to provide context.

Yes, I understood that perfectly.

> I wasn't claiming they encouraged the use of stablecoins.

Neither have I claimed you did.

> I was adding historical context to the move.

Yes, I know. All my answers are congruent with that.

[jazzyjackson]

Does anyone remember being voluntold to use Skiff for email and calendar, instead of a product that actually handles timezones in event invites?

I'm convinced the point of YC must be something other than launching successful businesses

[bombcar]

I mean it’s obvious that successful businesses are only a side effect of what the point is - a successful exit. And if one big success can be strongarmed to help other ventures exit successfully, they’ll do it.

Why wouldn’t they?

[thaneross]

This is why we can't have nice things.

[Nevermark]

Would you consider it risky for a startup to use its own product?

I would consider that a risk decreaser, because the loop creates a stronger fit signal.

Even more powerful, since across a cohort the encouragement is N-way, or really N^2-way, it actually lowers risk on average the more startups act as each others’ early customers.

And co-adopters benefit from getting unusually responsive suppliers with a strong indirect stake in mutual success.

Encourage isnt a requirement. Adopt only if it makes sense.

[remus]

From the POV of YC, they don't mind too much if it is a bit risky for any given individual company if it increases the legitimacy and stability of their portfolio as a whole.

[direwolf20]

The already 99.9% likelihood?

[onion2k]

YC, like most incubators, has always encouraged their companies to use products and services from other companies in their portfolio.

Are you saying founders don't mount an FTP account using curlftpfs and access it using SVN?

[7e]

But what advantages do stablecoins have?

[toomim]

Faster and cheaper transactions that don't get locked up by the whims of a bureaucracy. They continue to operate on non-business days.

[Aurornis]

That’s also a downside: When your funds can be transferred away by anyone who happens to acquire the key without triggering any fraud prevention or additional verification checks, losing your entire bank account at 4AM Sunday morning becomes much easier.

[tucnak]

This is why people who happen to own significant amount of crypto typically get hardware wallets

[aurareturn]

Yes, let's go back to hiding cash and gold under our beds. Maybe buy a machine gun so you can defend it from home intruders.

[RobotToaster]

> Yes, let's go back to hiding [...] gold under our beds

The people that did exactly that never had to worry about (hyper)inflation...

[mschild]

That would make it a single point of failure, no? Not a good idea if your company is riding on it.

[tucnak]

multisig exists

[learingsci]

Doesn’t that mean a home invader can break in, torture you a bit and walk off with your millions?

[duttish]

I think there was a rash of this kind of this kind of wrench cryptocurrency robberies in the Netherlands a few years ago.

Break in, bash owner about with a wrench, get coins. <Insert xkcd>

[Ekaros]

Is there some magic in redeeming them? And by redeeming I mean going to issuer and getting the face value in seconds?

[direwolf20]

You can redeem stablecoins in blocks of a million if you are a registered bank. This is the only way to redeem them. Otherwise you can only trade them.

[irishcoffee]

At the end of the day, for better or worse, the US dollar is backed by the US military. Virtual coins are backed by the greater fool.

What a strange toss-up.

[Onavo]

But the stable coins are also backed by the US military. All major USD stablecoins have sanctions mechanisms baked into their smart contract.

See for yourself the blacklist features

https://github.com/circlefin/stablecoin-evm/tree/master/scri...

[anukin]

Usdc is backed by US dollar denominated treasuries for most major issuers.

[bandrami]

It's broadly agreed that hasn't been the case for a while now, but that at the moment it's better for everybody if we pretend it still is

[Hamuko]

Is there actually any proof of this or is it Tether-tier magic money?

[zx8080]

> US dollar is backed by the US military.

No, it's not. It's not possible to come to the US soldiers with a bunch of US dollars and some demands and get what's demanded in return for the dollars.

Only trust of the other market participants backs the US dollar.

[direwolf20]

It's the other way around. If you don't trade in dollars, the military comes and demands that you do.

[RealityVoid]

Is the peso backed by the Mexican government? Because I'm afraid of all these militaries coming and knocking down my door to use their money.

[luke5441]

Seigniorage accrues to private entities instead of the state, enriching the owners of those private entities rather than everyone in the state that issues the currency.

[nivertech]

> Why do stablecoins exist at all?

For states:

They quietly inflate the money supply by forking fiat, achieving monetary base expansion without the political cost of explicit money creation

For issuers:

They convert user deposits into a private mint: risk-free interest on collateralized reserves, with none of the upside shared with holders

For users:

For everyone but the unbanked & criminals, stablecoins are strictly inferior money surrogate: no yield, no guarantees, and no recourse

[baxtr]

I don’t think that matters.

It’s a sign of commitment to something they’ve invested in as OPs says.

[an0malous]

It's been like 3 years since Silicon Valley Bank got a bailout because a bunch of startups put their money in a bank that wasn't guarded against economist instability.

[csmpltn]

Like a pyramid scheme?