My understanding is that your seed phrase is what you need to input into a hash function to render your digital signature used to show that you requested a transaction (maybe I have understood this incorrectly).
But you are given your words when you create a wallet. Where did they come from? And where are they stored other than with me?
Thank you for the help.
Sam Bankman-Fried is the founder and CEO of FTX, a digital asset exchange.
In this episode of the Unchained Podcast, he is being interviewed by Laura Shin, a journalist, and Unchained host. They touch on many topics, including stablecoins, the necessity of regulation, and even Sam’s political views.
Read our notes below to learn more.
Sam gives 4 categories of stablecoins:
This summary was originally posted on The Daily Bolt, which is a 100% free no-nonsense daily crypto newsletter by Revelo Intel.
At the core of it, cryptocurrencies and stablecoins are being operated with public ledgers which is holding the record of who owns how much of the token. One thing to note is that the value of these tokens comes from their users.
The main difference between them is the issuance authority. A cryptocurrency like BCH has no one issuing authority except miners who will get rewarded for producing a new block in a predictable timeline, I'm not going to get on why we need that, The reader is free to search more about this design. On the contrary stablecoins have one issuing authority which is also responsible for maintaining the value of the token to one dollar.
This one key difference changes the power structure quite a bit. And I believe stablecoin should not be regarded as neutral tokens with no influece in the crypto market. The operators of these tokens have the power to invest in another business as long they are able to maintain the peg of their token to one dollar. And apparently they are doing that.
In this article I will try to make the case that the current major stablecoins are in direct conflict with the cryptocurrencies that are intended to be used as cash.
The following are the common arguments for BCH as cash.
At this time USDT is ahead of BCH for the first three arguments. It has deeper liquidity with near-instant settlements, Fees are low enough for average users and also It's more accessible. The only advantage left for BCH is the limited supply.
And I don't think having a token with a limited supply is a strong enough advantage for competing with stablecoins as money. If things continue like this, BCH may turn into yet another speculative asset to speculate on.
As the current major stablecoins shown us, They are willing to invest some of their assets up to a point that it will not hurt their core business.
Basically stablecoins are very liquid form of investment vehicle with zero benefits to token holders other that the ability for you to redeem your money.
And if you look at it, They are investing selectively, For example Tether would lend USDT to exchanges, Which is mostly used to speculate further in the crypto market. And guess what majority of these investments are not going to further the goal of using cryptocurrencies as a means of payment.
Tether and Circle are openly advocating for their token to be used as a medium of exchange. So basically it is not in their interest to invest in things that will further the goal of using cryptocurrency as money.
And that's why I claim it is against your interest to invest a significant amount of your wealth in cryptocurrencies and stablecoins at the same time.
The rise of stablecoins has significantly reduced the usefulness of cryptocurrencies as money. And the convenience of using stablecoins has diverted investments away from using cryptocurrencies as money. Which is a big problem for those who would like to see cryptocurrencies to be used as money.
I believe there's a solution for this problem. There should be a marketplace for selling stable token liabilities which is designed to further cryptocurrency adoption.
And that is my goal as software developer in the next six months. My next article is going to be about my vision on how we can change the power dynamic by raising awareness and providing solutions for those who want to see this happen.
Link to the original article: read.cash/@Hossein.Zoda/stablecoins-are-directly-competing-with-cryptocurrencies-559895f8
