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Stableshitcoins Like Tether, USD Coin, Gemini Dollar, True USD, and PAX Do Not Deserve Any Hype

There has been plenty of hype in the crypto space about stablecoins. All the news sites are analyzing the different stablecoins like Tether (USDT), USD Coin (USDC), Gemini Dollar (GUSD), True USD (TUSD), and Paxos Standard (PAX), and wondering which one will reign supreme. The truth is these are all shitcoins, a new breed of shitcoins that can be called stableshitcoins. All of these stableshitcoins are hopelessly centralized and not actually stable.

As I write this, none of the major stableshitcoins are at parity with the USD, and therefore not working right despite a collective USD 3 billion invested into them. Whether stableshitcoins are below a dollar or above a dollar it is a fail, they are supposed to just stay at a dollar. The constant volatility of stableshitcoins ruins the entire concept.

So far the worst example of a stableshitcoin is Tether. They were bank hopping, from Wells Fargo, to Puerto Rico’s Noble Bank, and eventually landed at Deltec bank in the Bahamas. Tether has a USD 1.8 billion market cap, and all of this invested money is at risk of the United States government dropping some commandos on top of Deltec bank and seizing all of the money backing Tether. Holding dollars in any bank to back a cryptocurrency is such a weak and centralized model.

Look no further than the Tether crisis of October and November 2018. When they lost their bank account in Puerto Rico the price of Tether plunged to below 90 cents, since nothing was really backing its value at all for a time. All the people holding Tether got absolutely rekt. USD 1 billion of Tether was redeemed out of circulation during this time, and if bank transfers were working at Tether Limited it probably would have completely fallen into oblivion. Once again, this could easily happen again if for any reason Deltec bank is compromised. One well placed cruise missile, or lawyer, could end Tether.

Further, all of the stablecoins demand strict know your customer (KYC) verification to use them, and the companies in charge can freeze and reverse transactions. Centralized cryptocurrencies like stableshitcoins are a plague that must be eliminated.

Apparently the whole point of stableshitcoins is to be a USD analog in places where USD deposits are impossible, and it makes arbitrage alot faster. This has no merit, since people could use any other cryptocurrency trading pair, like Litecoin, to arbitrage Bitcoin.

Most catastrophically, even if stableshitcoins manage to stay at parity, which they do not long term, they are subject to USD inflation. Yes, stableshitcoins are having the money sucked out of them as the United States government prints money. Perhaps the primary purpose for the creation of Bitcoin was to create a currency that cannot have the lifeblood sucked out of it by the government. Whoever created these USD analog stableshitcoins that have the same problem that Bitcoin was designed to fix do not understand the point of cryptocurrency.

 

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