CZ Proposes Backing BUSD By Bitcoin
Due to the actions of the USG, CA and Binance are facing an uphill battle with BUSD.
There are a number of reasons for the USG doing what they are (from its perspective) so CZ has to tangent. However, going to BTC will bring up more problems.
We cover this in the video.
▶️ 3Speak
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Totally agree that backing a stable USD token with BTC is a crazy idea. Hard to believe CZ came up with that idea.
I can't find anywhere that CZ suggested this.
Got any sources?
When you said CZ was talking about backing BUSD with BTC I was thinking it was a pretty good idea and then you proceeded to call me a moron, which I thought was pretty funny. I don't know what's going on with you lately but you being on tilt like this is pretty entertaining. To be fair the banks are collapsing and now everyone is a "banking expert" so I guess that's enough of a trigger by itself.
I'll probably write a post soon about how backing BUSD with BTC might work.
Now is clearly the best time to do it while BTC is still cheap and demand for BUSD is down. Not the best idea but might work... ish
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Didn't work so well for UST... Just saying...
It wasn't used for UST.
If it had been it would have worked.
UST was collateralized by LUNA.
I know you know this.
Having a sidepot of BTC was pointless.
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Well regardless of what was supposedly backing what, it didn’t fucking work either way and a lot of people, including myself lost a shit ton of money. So why would it work again?
The point is that they tried to backstop it with BTC and it didn’t work. Or that scamming mother fucker took it all with him for fleeing money.
So what is going to be the difference of CZ does it? Not a damn thing.
How in your opinion do you think it will work?
Still planning on writing a post about it.
In the meantime you might do well to remember that losing a "shit ton of money" is an extremely triggering experience that often leads to irrationally emotional conclusions. There is no reason why USDC & USDT can't crash to zero due to insolvency. Are you sure UST was a worse idea simply because it was the one to kick the bucket first? Or are there other reasons? If there are other reasons can't those problems be mitigated with correct mechanics?
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I am not arguing that, lol. I fully believe that they can go insolvent, which is why I don’t hold them at all. Anything that is controlled by a central entity is basically shit. We just saw USDC lose its peg because of SVB going insolvent.
I mean the dollar itself is shit so I am not really interested in holding a derivative of it. At this point I would rather just hold the underlying asset that would be BTC in this argument.
It’s hard to back a “stable” asset with a volatile one. This was proven with DAI and ETH and is why Maker had to add USDC as a collateral asset which completely fucked the whole thing because now you have a so-called “decentralized” stablecoin backed by an extremely centralized one. So that’s actually 2 examples if you include UST of how it won’t work.
Even HBD has issues at times with fluctuating off the peg, basically everyday, but it’s mechanics work unlike the others, which sets it apart, for now…
I’ll be looking forward to your post on the subject.
HBD just needs more volume and adoption imo. We also need to narrow the 5% fee on Hive >> HBD conversions to like 2%. I guess it's time to write it...
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Fully agree on the conversion fee! Once I realized that I stopped using it for a while, lol. I was using it all the time not realizing that I was losing 5% every time I did it, lol.
nuuuuuuuuuuuuuuuuu
I call it market tuition… lol.
For some reason, backing BUSD with BTC reminds me of the whole Terra Luna situation with Do Kwon. When prices go down, that collateral could really suffer.
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That's exactly my issue...I have PTSD over that, lol.
Yeah, we have seen that before with UST… Didn’t work out so well…
Summary:
Task discusses the idea proposed by CZ (CEO of Binance) to back BUSD (Binance USD stablecoin) with Bitcoin due to concerns about the US government potentially weaponizing the dollar. Task vehemently opposes this concept, highlighting that backing stablecoins with Bitcoin eliminates stability and makes it challenging to maintain a stable value. He contrasts this approach with the Hive Dollar (HBD), emphasizing HBD's resilience and value creation through a thriving ecosystem, commerce usage, and various financial transactions. Task stresses the importance of understanding the monetary system, history of currencies, and current financial dynamics.
Detailed Article:
Task starts the video by addressing CZ's potential plan to back BUSD with Bitcoin following concerns about the US government weaponizing the dollar. He expresses strong disagreement with this strategy, citing concerns about the stability of a stablecoin backed by a volatile asset like Bitcoin. Task criticizes the notion that backing BUSD with Bitcoin can ensure stability, highlighting the potential risks and complexities involved in such an arrangement.
He emphasizes the importance of understanding the monetary system and banking before proposing or endorsing financial ideas. Task asserts that many individuals lack a deep understanding of these systems yet voice opinions and suggestions without adequate knowledge. He stresses the need for thorough research and study to make informed decisions in the financial realm.
Task then delves into the comparison between backing stablecoins with Bitcoin versus utilizing a model like HBD, where HBD's stability and value are maintained through a robust ecosystem and usage in various financial transactions. He explains how Hive operates as a unit of account and is not directly pegged to the US dollar, unlike many stablecoins. Task underscores the resilience of HBD and its adaptability to market fluctuations, highlighting the effectiveness of certain mechanisms implemented to safeguard its value.
Furthermore, Task touches on the historical aspect of monetary systems, referencing past instances like the gold rush days where gold-backed currencies led to hyperinflation in certain regions. He elucidates how understanding these historical events can provide insights into the potential pitfalls of basing stablecoins on volatile assets like gold or Bitcoin.
In conclusion, Task reiterates the necessity of building a robust financial system that can withstand external pressures and regulatory challenges. By emphasizing the importance of creating value for a currency through a flourishing ecosystem and transactional usage, Task demonstrates a pragmatic approach to navigating the complexities of the modern financial landscape.
Notice: This is an AI-generated summary based on a transcript of the video. The summarization of the videos in this channel was requested/approved by the channel owner.