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Comment by wanderfowl | Hacker News Reader

Am I the only person who struggles with the idea of anything that's set at 1-to-1 with a single fiat currency being called 'stable'?

Certainly, USD is more stable than BTC or ETH, so a "stablecoin" pegged to it will share that increased stability. But that's more a question of prevailing economic conditions than anything, and there's nothing stopping a fiat-based coin from sharing in the inflation, deflation, or collapse of the pegged currency. Even if we assume the implementation of the currency perfect, you're just changing the set of things your currency is vulnerable to.

I wonder if anybody's working on a Stablecoin which tries to mitigate this using something like precious metals, or a pool of fiat currencies (with the understanding that something hitting USD hard might not hit CNY or EUR or GBP as hard, mediating the effect).

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Yes to both. There are at least two gold-backed cryptocurrencies designed for a strict interpretation of Islamic Finance (HelloGold in Malaysia, OneGram in Dubai).

There is also a basket of 15 currencies plus gold, called Globcoin, though the balance of currencies, what currencies you could buy and sell Globcoins with, and relative share of each coin was difficult to interpret when I was looking into it.

iirc, MakerDAO was originally going to peg itself to the IMF's SDR, which is a basket of multiple currencies regularly rebalanced to achieve "universal" stability[1].

They then decided to peg to the USD to please traders, who measure in USD. But I understand it's indeed a long term goal to peg to a more stable asset. The underlying mechanism should stay the same.

[1]: https://www.imf.org/external/np/exr/faq/sdrallocfaqs.htm

This is why crypto is so attractive to libertarians.

It requires getting something for absolutely no effort and conflates economic growth with semantic labeling of abstract pseudo academia aimed at the very people whom they are trying to steal money from.

Somebody needs to put together a "Wall of Shame". History will teach us as this period as a "Dark Period" where financial scammers flourished with the help of Russia to launder the very money they took from their people.

I can't understand anything here. Why would "getting something for absolutely no effort" be attractive to a libertarian? Isn't that more of a left-wing ideal of redistributive societies, where you receive resources regardless of your economic output?

Libertarian; I think that word doesn't mean what you think it means...

There are many problems with cryptocurrencies in general, and "stablecoins" in particular, but this illuminates none of them.

One problem is that the word "stable" in stablecoin conflates two separate concepts; the value-stability of the underlying reference commodity basket, and the stability of the units of the currency vs. the defined commodity basket. These are separate concerns with separate feedback/control loops, and any "stablecoin" that doesn't reflect that is doomed to failure. Users who expect value-stability of the commodity basket in terms of other value references will be especially disappointed; no "stablecoin" I am aware of claims to deliver that.

I'm also pretty sure that "libertarians" don't expect others to magically give them such things.

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