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Comment by PretzelPirate | Hacker News Reader

We will always have to pay for goods in a fiat currency, so it makes sense for people to value everything relative to fiat. Even trading on a ratio still falls back to “which will be worth more fiat”.

This doesn’t mean that people don’t value crypto, it means they live in the real world.

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This will proceed -- until the daily (hourly?) re-valuation of fiat currencies makes it impossible to retain a mental model of their "worth".

Then, everything will be valued in terms of some more stable and widely available value reference.

Will this be a cryptocurrency? Probably not, unless some viable non-Fiat "stablecoin" become popular, or ETH and BTC reach a more stable plateau of valuation. More likely, a widely available relatively stable coinage like Silver would be used.

> non-Fiat "stablecoin"

has anyone published a whitepaper / theory describing how this might be possible?

A stablecoin has to be denominated in something -- that's what it's stable in.

Is that even useful? It would have to be a commodity with extremely stable (everywhere in the world) non-zero price in "real" terms. Potatocoin? Sandcoin?

You could peg to CPI-adjusted dollars or the Big Mac index or whatever. That's the easy part. The hard part is getting the peg to hold during difficult times.

As far as I can tell, "stablecoins" are redeemable for the underlying asset, that's how they keep the peg. Theoretically someone could make a coin that is redeemable for a large basket of goods and services, and such a coin should be very stable, price-wise, against those goods and services. However, this would be a very risky business for the issuer of the coin.

> someone could make a coin that is redeemable for a large basket of goods and services

This would be necessarily centralized if any of those goods are physical, or services physically rendered. If it excludes all physical nexuses, e.g. an in-game currency, one could do away with that centralisation, but it's no longer stable in any meaningful sense.

A huge basket of stable currencies, government bonds, commodities, real estate. It seems like it should be possible to create something so diverse that even black swan events have minimal impact.

How much better can that be than an inflation-adjusted bond? It may be more satisfying in a theoretical way, but does the difference matter, and how much would people pay?

While there are several contenders of various complexity, DAI is still the state of the art AFAIK.

https://makerdao.com/whitepaper/White%20Paper%20-The%20Maker...

DAI is currently pegged to the USD but the long-term goal is (was?) to have an asset following a more general notion of stability according to some international index.

I wasn't able to find a source or specifics for that last part but I did find this overview from 2019 that I think looks quite good.

https://www.ecb.europa.eu/pub/pdf/scpops/ecb.op230~d57946be3...

>This will proceed -- until the daily (hourly?) re-valuation of fiat currencies makes it impossible to retain a mental model of their "worth".

Until? What event do you refer to? Are you predicting the invention of rapid (fiat) currency trading?

I think the article makes the case that nobody cares about exact number of btc they have - only their dollar value.

Unlike say house. Which might retain the same value to me even if its market dollar value doubled overnight.

> Unlike say house. Which might retain the same value to me even if its market dollar value doubled overnight.

I think this needs to be thought carefully. A house, because it's saleable, represents an opportunity cost. If the market value doubles overnight, a rational actor should re-evaluate whether it is still the best course to continue to live in it, rather than sell it.

> If the market value doubles overnight, a rational actor should re-evaluate whether it is still the best course to continue to live in it, rather than sell it.

If the rational actor's home has doubled in value, does the actor live in an exceptional home, or have all homes similarly doubled in value?

Does a rational actor factor in where they intend to live in their calculation? How does that weight against the dollar value of the house they own?

A few rational actors are to move to some lower priced area and will do so. They are mostly retired people. Though sometimes a low cost area will target small business to move to them.

> We will always have to pay for goods in a fiat currency

Only so far, this will hopefully change in the future. People are tired of the government being able to print money at will and devalue their hard work.

hard cash is as cryptic as it gets for some sense of crypt.

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