Making Bitcoin easier to use — that’s how it’s going to happen!
December 9, 2020When Will Bitcoin Reach Critical Mass?
December 9, 2020Albert Einstein, when creating first the special and then the general theory of relativity, did use lots of thought experiments. A thought experiment is a metaphor, an explanation to reach understanding by analogy — like, for example, what happens if we sit and ride on a light beam.This article uses also thought experiments designed to provide analogy and bring clarity in a time of euphoria of a bull crypto-market.It may have been almost 2 years ago when I did answer a question on Quora — ‘What is the most dangerous crypto-currency.’ At that time, as well as now, my answer is the same — it is the group of so-called ‘stable’ coins.While there are a wide variety of ‘stable’ coins, I can divide them into 2 groups:- derived from fiat currency: like for ex. USDT / Tether and USDC / Circle — receiving fiat USD and giving a crypto-coin which promises its worth is 1 USD- derived from a major crypto coin: like DAI — receiving Ethereum and giving a crypto-coin which promises its worth is 1 USD, based on the ETH-USD exchange rate at the time of purchase.Please note that I use the verb ‘promise’. The majority of crypto-traders and crypto-investors are certain that the peg (the 1:1 exchange rate) is guaranteed.But, is it?!After receiving the fiat currency and giving the crypto trader/investor (fiat-based) stable coins, the crypto-exchange or the ‘stable’ coin issuer can consider the fiat that was received to be earnings — to be spent and consumed.A decent exchange/issuer, on the other hand, treats the fiat received not as an earning but as savings — to be returned back when demanded.The first example is of a fraudulent exchange or coin issuer. But let’s consider the stable coins obtained from an issuer that I consider to be decent…
