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Comment on PayPal is Introducing a new crypto currency.

dhork@lemmy.world ⁨10⁩ ⁨months⁩ ago

Stablecoins are kind of unique because their goal is to be… Well… Stable. they are working as designed if their value is exactly pegged to $1.

Which means that if you manage a stablecoin, you accept other people’s dollars, and give them these tokens in exchange. When those people come back to redeem them, whether it’s next month or 50 years from now, they are expecting to get the same number of dollars back.

Tether is the top stablecoin in the Crypto Universe. It is traded on several Crypto exchanges, and can somehow maintain it’s peg to USD no matter how many trades there are. Tether’s Market Cap is currently over $80B dollars, and the Hong Kong company that maintains it promises it’s all backed by cash or cash equivalents. Many people are skeptical, because that’s a Metric Fuckload of cash, and while Tether has released some things it says are proof of reserves, they have never been able to release a full audit. But even an idiot money manager can make a ton of money if they have a kitty of $80B to manage, with no expectation of any return.

So it’s possible that Paypal isn’t satisfied to just hold it’s own customers money, and wants a piece of that Tether float…

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newIdentity@sh.itjust.works ⁨10⁩ ⁨months⁩ ago
But isn’t the point of cryptocurrencies to not be bound to a central authority?

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- traveler01@lemdro.id ⁨10⁩ ⁨months⁩ ago
  The stable coins are basically tokens in blockchains, for example in Ethereum there’s USDT as a token and now this one from PayPal. They work in a decentralized way but there’s a centralized entity guaranteeing that its value is pegged to the dollar.
  
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TenderfootGungi@lemmy.world ⁨10⁩ ⁨months⁩ ago
This is like $$, but with extra steps and burning a lot of fossil fuels.

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- Terevos@lemm.ee ⁨10⁩ ⁨months⁩ ago
  
  burning a lot of fossil fuels.
  
  FUD. PYUSD is an ERC20 token, using the Ethereum network, which means it’s far more efficient than credit card processing programs at the moment.
  
  Now, don’t get me wrong. PYUSD is stupid and I’ll never use it. And the whole point of crypto is so that companies can’t control your money.
  
  But being inefficient and burning fissile fuels is not one of those negatives about it.
  
  **note - there are a few cryptos, especially first generation that are highly inefficient and do burn lots of fissile fuels, like Bitcoin, Bitcoin Cash, Litecoin, Dogecoin, etc.
  
  But Ethereum adopted proof of stake somewhat recently, so is now far more efficient.
  
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Blakerboy777@artemis.camp ⁨10⁩ ⁨months⁩ ago
Wow. Yeah, even if they literally just had it in a bank account, which I think can't even be considered an investment, the interest on that would be very substantial.

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