<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>TSiege</author><text>I was just thinking the same thing. I was looking into [Gemini Dollar](&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.gemini.com&amp;#x2F;dollar&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.gemini.com&amp;#x2F;dollar&lt;/a&gt;) yesterday. It&amp;#x27;s a stable coin that gives the patina of being FDIC secured. Their website says, &amp;quot;Gemini is a U.S. company regulated by the New York Department of Financial Services. GUSD reserves are eligible for FDIC insurance up to $250,000 per user while custodied with State Street Bank and Trust.¹&amp;quot; Furthermore, Gemini offers 8% interest deposits of their Gemini Dollar. This sounds like a safe bet to an unassuming person. Easy 8% returns with no risk since your initial deposit is FDIC insured, so it&amp;#x27;s just like any other savings account. BUT ITS NOT. The fine print reads, &amp;quot;FDIC insurance applies only to the USD reserve funds. GUSD exist as ERC-20 tokens on the Ethereum blockchain; tokens are under the user’s self-custody, and are not insured through Gemini.&amp;quot;&lt;p&gt;And this is coming from a reputable backer, relative to other stable coins. Then you have Tether which is a ponzi scheme tire fire years in the making and done almost entirely in the open with no consequences. Given that stablecoins like these are used to underpin a lot of the crypto markets, if one of these were to falter I don&amp;#x27;t see how it couldn&amp;#x27;t trigger knock on effects bringing down the others and the entire crypto market with it.</text><parent_chain><item><author>andrewla</author><text>If anything, I think stablecoins are way more dangerous than the author indicates.&lt;p&gt;People talk about things like Bitcoin as a threat to sovereign currencies, and they are, as competitors, of sorts. But stablecoins are another matter entirely. One huge aspect of the value of sovereign currencies is that they are instruments of law -- courts will settle in them as a lowest common denominator, and it is safe to use them in all sorts of settings as a result.&lt;p&gt;When dollar-denominated assets appear, they always run the risk of being considered a dollar-equivalent. For example, bank deposits are dollar-denominated, and are considered dollar-equivalent (even dollar-superior, in the sense that there are transactions that you can&amp;#x27;t legally do with specie, only with bank deposits, like buy stocks). That means that if banks (which are businesses) are not good at doing business, the government is essentially forced to treat them as dollar-equivalents by making them whole. See Savings &amp;amp; Loan Crisis, the GFC, LTCG, etc., etc.&lt;p&gt;Stablecoins piggyback on the legal aspects of dollars, and as long as you treat them as dollar-denominated assets, you&amp;#x27;re fine. The second you treat them as dollar-equivalents, you run the risk of a change in the value of that asset being something that the government is forced into supporting.</text></item></parent_chain></comment><story><title>The Handwavy Technobabble Nothingburger of Crypto</title><url>https://www.stephendiehl.com/blog/nothing-burger.html</url></story>
<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>weego</author><text>&lt;i&gt;People talk about things like Bitcoin as a threat to sovereign currencies, and they are, as competitors, of sorts&lt;/i&gt;&lt;p&gt;No, they&amp;#x27;re competitors for the stores of sovereign wealth that are the backing of sovereign currencies.</text><parent_chain><item><author>andrewla</author><text>If anything, I think stablecoins are way more dangerous than the author indicates.&lt;p&gt;People talk about things like Bitcoin as a threat to sovereign currencies, and they are, as competitors, of sorts. But stablecoins are another matter entirely. One huge aspect of the value of sovereign currencies is that they are instruments of law -- courts will settle in them as a lowest common denominator, and it is safe to use them in all sorts of settings as a result.&lt;p&gt;When dollar-denominated assets appear, they always run the risk of being considered a dollar-equivalent. For example, bank deposits are dollar-denominated, and are considered dollar-equivalent (even dollar-superior, in the sense that there are transactions that you can&amp;#x27;t legally do with specie, only with bank deposits, like buy stocks). That means that if banks (which are businesses) are not good at doing business, the government is essentially forced to treat them as dollar-equivalents by making them whole. See Savings &amp;amp; Loan Crisis, the GFC, LTCG, etc., etc.&lt;p&gt;Stablecoins piggyback on the legal aspects of dollars, and as long as you treat them as dollar-denominated assets, you&amp;#x27;re fine. The second you treat them as dollar-equivalents, you run the risk of a change in the value of that asset being something that the government is forced into supporting.</text></item></parent_chain></comment><story><title>The Handwavy Technobabble Nothingburger of Crypto</title><url>https://www.stephendiehl.com/blog/nothing-burger.html</url></story>