More Than 90% of Stablecoin Transactions Aren't From Real Users, Visa Study Finds (theedgesingapore.com) 45
More than 90% of stablecoin transaction volumes aren't coming from genuine users, according to a new metric co-developed by Visa, suggesting such crypto tokens may be far away from becoming a commonly used means of payment. Bloomberg: The dashboard from Visa and Allium Labs is designed to strip out transactions initiated by bots and large-scale traders to isolate those made by real people. Out of about $2.2 trillion in total transactions in April, just $149 billion originated from "organic payments activity," according to Visa.
Visa's finding challenges stablecoin proponents' argument that the tokens, pegged to an asset like the dollar, are poised to revolutionize the $150 trillion payments industry. PayPal and Stripe are among the fintech giants making inroads into stablecoins, with Stripe co-founder John Collison in April citing "technical improvements" for being bullish on the tokens. [...] Visa itself, which handled more than $12 trillion worth of transactions last year, is among companies that could stand to lose out should stablecoins become a generally accepted means of payment.
Visa's finding challenges stablecoin proponents' argument that the tokens, pegged to an asset like the dollar, are poised to revolutionize the $150 trillion payments industry. PayPal and Stripe are among the fintech giants making inroads into stablecoins, with Stripe co-founder John Collison in April citing "technical improvements" for being bullish on the tokens. [...] Visa itself, which handled more than $12 trillion worth of transactions last year, is among companies that could stand to lose out should stablecoins become a generally accepted means of payment.
The grand master plan of crypto (Score:4, Interesting)
The plan for all cryptocurrencies isn't what they want to make you think it is. It's more sinister than the egalitarian image the crypto boys portray for it.
After the 2008 financial meltdown, cryptocurrencies were born out of it, declared to be the means by which people could be freed from banks/governments, and promised to avoid any such future meltdowns from happening ever again.
But the crypto boys watched closely the result of that meltdown, and formulated their plan: create a new form of currency, and for it a new financial system detached from traditional ones (those burdened by "governments and regulations") - they called it "DeFi" for "Decentralized Finance", but its dirty little secret is that it's really "Deregulated Finance".
Their plan is to make this new money be adopted by the masses, so they start it off with a low price, then gradually increase it, by virtue of them just pulling numbers out of thin air for its value, until it catches the attention of the masses - then it gets more and more "valuable" from the collective faith of its given value ("network effect"), until traditional institutions and the typical "1%" billionaires start to notice and, greedy as they are, want in on the action too.
So now those that got in at the ground floor have gained all this "value" out of thin air, and once they're ready, they'll pull out all pretty much at once - that it'll create a sell-off panic, and a new meltdown is born! And because of their "De[regulated]Fi" system, the bros have already shifted all the risks away from themselves onto others, so they'll make out like bandits, leaving everyone else to "hodl" the bag.
But the bros were really observant about that last meltdown - and noticed all the "bailouts" the big banks got - so as they were shifting the risks to others, they increased their investments into what would get the next bailouts - so in the end they'll make out like bandits twice: the first time from suckering everyone else into their pump-and-dump scam, and again once they benefit from the bailouts that'll get handed out.
And there you have it folks, the real master plan of crypto.
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"Cryptocurrencies will bring about a worse financial meltdown than the one they were born from." -Prof. Feynman
Re:The grand master plan of crypto (Score:4, Insightful)
"by virtue of them just pulling numbers out of thin air for its value, until it catches the attention of the masses"
This statement not only illustrates your hostility towards the idea of crypto, but also draws to light your fundamental misunderstanding of how supply/demand economics work.
"So now those that got in at the ground floor have gained all this "value" out of thin air, and once they're ready, they'll pull out all pretty much at once - that it'll create a sell-off panic, and a new meltdown is born!"
You seem to be conflating a rug pull with intentionally sabotaging a market.
The truth is, the proportion of trades between "real people" and large institutions isn't that much different from common cash or credit transactions.
"they'll make out like bandits twice: the first time from suckering everyone else into their pump-and-dump scam, and again once they benefit from the bailouts that'll get handed out."
What you're proposing here is effectively that another FTX scenario would lead to bailouts for the creators of the exchanges. That clearly isn't going to happen.
I appreciate your conspiratorial thought process - there really are malefic forces trying to screw everyone out of their money - but they're not likely to try to shut the barn door after scaring the horses out. They (whoever They are) want to have a global cryptocurrency to be able to audit (and control) all of our transactions easily. That won't happen unless they can pivot people off unregulated crypto (and the dollar) to a "fedcoin", and that's not going to be met with much success if nobody trusts the underlying mechanisms.
Is there a point to using stablecoins? (Score:5, Insightful)
Is there a point to using stablecoins? To me, they seem like Showbiz Pizza tokens, where one trades a currency that is known and good (for better or worse) for someone else's in order to play in the arcade.
As a store of value, if they are tied to the dollar, why not just use a dollar, and be sure the rug doesn't get pulled. As a method of trade, they might be useful, but getting one's money out of the currency may be difficult to impossible.
At least if I use PayPal, those records are relatively private, while a blockchain shows the purchase for everyone to see, forevermore.
tl;dr... Just use PayPal. If one needs to make an anonymous transaction, then just jump to a cryptocurrency like Monero which is designed from the ground up to be private.
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Same as the rest of the crypto I suspect. Alternative payment infrastructure. Stablecoins should ensure higher level of trust in the currency, supposedly.
I remain unconvinced it helps it in any meaningful way considering the sheer amount of scams with supposedly "stable" coins ending up anything but.
Re:Is there a point to using stablecoins? (Score:4, Interesting)
tl;dr... Just use PayPal. If one needs to make an anonymous transaction, then just jump to a cryptocurrency like Monero which is designed from the ground up to be private.
Yup, digital currencies with public ledgers are an intelligence smorgasbord.
Re: Is there a point to using stablecoins? (Score:2)
Because of the nature of irreversibility.
Different payment networks each work differently, but generally traditional payments with national currencies are slow and reversible.
This contrasts with crypto payments with are fast and irreversible.
The fast slow thing is an annoyance, but the reversible/irreversible thing is a way for fraudsters to steal your crypto by reversing a transaction. It makes it very hard to safely transact between traditional banks and crypto networks. Typically, this is done with long
Re: Is there a point to using stablecoins? (Score:2)
Another way to put it:
With stable coins I meet up with you and I hand you some coins and you hand me some Bitcoin.
With traditional banking I meet up with you and I hand my dollars to a bike courier who hands me a slip of paper and rides off. I hand you the slip of paper and ask you to hand me the Bitcoin.
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At least if I use PayPal, those records are relatively private
You have obviously never read their privacy policy, have you?
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He said "relatively". Perhaps he just really thinks the blockchain is public. Paypal MAY publicize your data, the blockchain will.
(FWIW, I've no experience with either, but that's what I think his argument is.)
It's how you get real money into and out of (Score:2)
The reason 90% of the currency is "whales" is because they're manipulating the market. One of the major exchanges had the price of Bitcoin drop from $60k to $10k in a "flash crash" because of a single whale
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I believe they're just another form of gift card. You spend useful
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A stable coin is a dollar, but on the blockchain.
Lets take USDC. Its issued by Circle. You send them one traditional USD, they send you one USDC to your wallet. You can use that USDC in crypto infrastructure, loan it out and earn interest.
As a non us citizen, you may buy some using say ether, in order to hedge the inflation of your local shit fiat. Or you may sell your crypto holdings into it if it looks like the market is headed off a cliff.
USDC is not decentralised, it requires trusting Circle. Circle can
VISA-funded study finds VISA competitors suck! (Score:1)
2 metrics for stablecoin to be feasible (Score:5, Insightful)
1) Transaction time under 3 seconds
2) Cost less than 2% of purchase price
And that's just to compete with tap to pay credit cards or apple/google pay.
And if a credit card, you get fraud detection, ability to simply reverse / dispute transactions, and some other misc features.
So just to be considered - you gotta be better than 1,2. But fraud support is also a HUGE value add.
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I can already pay with my debit or credit card for free, why the hell would I accept a 2% surcharge to pay with that junk?
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It's the retailers who need to be convinced, not you. You're paying for that 2% surcharge whether you recognize it or not: it was structurally built into cost of doing business decades ago, and today you're starting to see people consistently adding that cc use surcharge back onto the bill despite their cc processor agreements.
You can almost always get 2-5% off the sticker price with local business by negotiating to pay with cash.
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the sheer *frequency* of robberies required to make 2% sound good suggests not entering that neighborhood, whether for business or any other purpose (save bounty hunting, I suppose . . .).
(of course, that's with static analysis; knowing that the neighborhood is cashless would drop the frequency, etc.)
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Credit cards also have the quite notable feature of being, you know, credit.
Crypto was a product of its time (Score:3)
"Limited edition gold coins" (Score:1)
Nothing wrong with them, except they are overpriced.
If I want "collectable gold" coins, I'm probably looking a not-super-rare-but-not-belly-button-common historical coins, where at least I know what the "market price" has been over an extended period of time and I know the long-term price trend is significantly above "melt down" value.
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You say that, but if you could go back to 2005-2010 and tell yourself to invest in something with the money on hand, it would 100% be to throw everything into mining bitcoin. There's nothing else that's had similar returns/appreciation with so little risk.
Re: Crypto was a product of its time (Score:2)
That is like saying it would have been risk free for me to bet all my money on the Kansas City Chiefs to win the Super Bowl last a couple months ago because they won. All sorts of bets are risk free is you travel back in time with a sports almanac.
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Well now. (Score:1)
If they want us to try their coin, they should hand out some free samples.
Shocked! (Score:5, Funny)
I am shocked, shocked to find that money laundering is going on in this establishment!
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Beat me to Casablanca ref! You hurt my web ego.
Anyhow, this reminds me of the Twitter/X dispute over bot rate when Musk was purchasing it. Facebook and Reddit probably are also bot-infested. In any future sale, they hopefully remember to put in a disclaimer that "the percentage of legitimate human accounts is unknown. Caveat Emptor". (It's emptor of humans :-)
My God, it's full of bots! [reddit.com]
Crypto is all garbage (Score:5, Insightful)
An interesting but inefficient solution that is worse that the problem it claims to be trying to solve. Just as you can't beat thermodynamics, crypto will never compete with credit cards.
Now. If you want to launder money or gamble on digital beanie babies, or defraud the gamblers, those are your genuine use cases.
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Shine on, you crazy cultist!
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You left out paying off blackmail.
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An interesting but inefficient solution that is worse that the problem it claims to be trying to solve. Just as you can't beat thermodynamics, crypto will never compete with credit cards.
This is equally true of almost every other use case people have dreamed up for globally distributed ledgers. Unless there is no one who can be trusted to operate a centralized transaction database, the database will always be cheaper, faster and better. And it's even fine to have a set of centralized databases that get mutually reconciled on a regular basis -- which is how the financial systems work.
The only truly good application of distributed ledgers I've seen is for transparency-related projects where
OK (Score:4, Insightful)
Take an average "real" stock exchange, trading stocks, shares, features, etc. and you'll quickly find out that "More That 90% of Transactions Aren't From Real Users".
This has been the nature of exchanges exchanges for many decades now since high frequency trading became a thing.
I've no idea what they wanted to prove or disprove but it's a nothing burger.
And? (Score:3)
20%? About the same as the stock market then.
The percentage of robotic traders is an interesting statistic, but I think it says more about the bots than it does about the currency.
Oh, and of course we believe it (Score:2)
Coming from Visa, which is hardly disinterested.
Of course they said that, they want to protect their own turf.
Then what are those transactions for? (Score:2)
Sure, they're not random person buying gas or a Pepsi. Then what are they?
Should they be excluded in general from all measurements of transactions (meaning they're part of the coin's definition proper, to maintain that stable value)?