Seems like a really inefficient way to do points… my CC company gives me 3 points and I eventually redeem them for USD.
Is that not the L1 L2 network stuff, but just far less efficient than a DB write?
(For those of us who remember what runs on a bank with your savings in it feel like) What if any protection is there, that you will be able to withdraw your money when a massive dunk in Bitcoin crashes a bunch of major holders and you want your savings back?
I'm not sure if I'm missing the point here, but stablecoins could be exchanged for something of value at a fixed price. The USD used to be this - you could exchange it for gold. But it was more convenient to give paper money than exchange gold.
A Big Mac may cost $5 now, $10 in the future. But I would like a Big Mac Coin that lets me exchange it for one Big Mac in any time in the future. It has value as long as McDonald's exist and is willing to accept the coins, which is better than you can say of most crypto.
It may be a different sized burger, it may have somewhat different ingredients. Even our "classic coke" is nothing like the original coke. But this is what I'd expect from branded stablecoins.
This is how I understand the uprising of stablecoins, let me know if I am wrong:
One of the best businesses is to offer this service:
Give me your money, I'll give it back to you later.
Because then you can lend out that money to someone who offers this service:
Give me your money, I'll give it back to you later. Plus some interest.
You now have a business which, at almost no cost, generates money. The interest offered by the latter service.
Doing so is regulated. You need to jump through a lot of hoops and you are very limited in whom you can lend out your customers' money to.
But you can design the same type of business with stablecoins. By offering:
Hello! I have two offerings: 1: I sell someNiceCoin for a dollar. 2: I buy someNiceCoin for a dollar.
For your customer it is the same. They give you money and get it back later.
But now you are not a "money holder". You are a trader. A trader of some coin you invented. You don't need to jump through so many hoops and you can lend out the money you earn from selling someNiceCoin to services with higher yields.
I think the difference is that there is still a maintenance of stored value, but that stored value is now able to earn more yield than what you would by depositing it at a bank.
In both the cases described in the article - using Unit or Bridge - you pass on the work of stored value to someone else. But Unit doesn't earn as much by being the stored value as Bridge would because Bridge is invested into T bills / MMFs. Hence, Mercury coin is better than running a bank using Unit.
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[ 3.9 ms ] story [ 22.0 ms ] threadA Big Mac may cost $5 now, $10 in the future. But I would like a Big Mac Coin that lets me exchange it for one Big Mac in any time in the future. It has value as long as McDonald's exist and is willing to accept the coins, which is better than you can say of most crypto.
It may be a different sized burger, it may have somewhat different ingredients. Even our "classic coke" is nothing like the original coke. But this is what I'd expect from branded stablecoins.
One of the best businesses is to offer this service:
Because then you can lend out that money to someone who offers this service: You now have a business which, at almost no cost, generates money. The interest offered by the latter service.Doing so is regulated. You need to jump through a lot of hoops and you are very limited in whom you can lend out your customers' money to.
But you can design the same type of business with stablecoins. By offering:
For your customer it is the same. They give you money and get it back later.But now you are not a "money holder". You are a trader. A trader of some coin you invented. You don't need to jump through so many hoops and you can lend out the money you earn from selling someNiceCoin to services with higher yields.
In both the cases described in the article - using Unit or Bridge - you pass on the work of stored value to someone else. But Unit doesn't earn as much by being the stored value as Bridge would because Bridge is invested into T bills / MMFs. Hence, Mercury coin is better than running a bank using Unit.
Is that fair to say?