Unstable coins
Cryptocurrencies are a manifestation of The Greater Fool Theory of investing. A justification for cryptocurrencies is that they are unmoored from any government-regulated currency. Their primary utility, it turns out, is funding criminal activities.
Stablecoins are a form of cryptocurrency linked to a government currency (the dollar, the rouble, etc). Of course, tethering the value of stablecoin to a bona fide currency does violence to the idea of cryptocurrency independence. The only independence is the exchange rate.
Who, exactly, is controlling how much stablecoin is minted?
“Paxos, the blockchain partner of PayPal, mistakenly minted $300 trillion worth of the online payment giant’s stablecoin on Wednesday in what the company called a “technical error.”
“Market watchers had spotted the enormous injection of the PayPal PYUSD stablecoin on Etherscan — a block explorer and analytics platform for the Ethereum blockchain.
“Paxos had mistakenly minted the stablecoins as part of an internal transfer, before it “immediately identified the error and burned the excess PYUSD,” the company said in a social media statement.
“This was an internal technical error. There is no security breach. Customer funds are safe. We have addressed the root cause,” it added. PayPal didn’t respond to an inquiry from CNBC outside of regular business hours.
“Transactions on Etherscan showed that the mistake had been fixed after about 20 minutes.”
There aren’t enough dollars in global circulation to back $300 trillion PYUSD, which would theoretically require more than double the world’s estimated total GDP.
Why trust these clowns with your money?
Paxos stablecoin boo-boo
Stablecoins are a form of cryptocurrency linked to a government currency (the dollar, the rouble, etc). Of course, tethering the value of stablecoin to a bona fide currency does violence to the idea of cryptocurrency independence. The only independence is the exchange rate.
Who, exactly, is controlling how much stablecoin is minted?
“Paxos, the blockchain partner of PayPal, mistakenly minted $300 trillion worth of the online payment giant’s stablecoin on Wednesday in what the company called a “technical error.”
“Market watchers had spotted the enormous injection of the PayPal PYUSD stablecoin on Etherscan — a block explorer and analytics platform for the Ethereum blockchain.
“Paxos had mistakenly minted the stablecoins as part of an internal transfer, before it “immediately identified the error and burned the excess PYUSD,” the company said in a social media statement.
“This was an internal technical error. There is no security breach. Customer funds are safe. We have addressed the root cause,” it added. PayPal didn’t respond to an inquiry from CNBC outside of regular business hours.
“Transactions on Etherscan showed that the mistake had been fixed after about 20 minutes.”
There aren’t enough dollars in global circulation to back $300 trillion PYUSD, which would theoretically require more than double the world’s estimated total GDP.
Why trust these clowns with your money?
Paxos stablecoin boo-boo
Ars Technica reported another use for the various blockchains. They’re great for hiding malware in the form of a “smart contract”. The malware can’t be deleted without destroying the blockchain.
@Kaleberg,
Educate me. I understand that all cryptocurrency is managed by blockchain, but I didn’t think all blockchain was linked to crypto. I had understood that blockchain was just a computer algorithm. It could be applied to crypto but could also be used independently.
It can be used independently, but the reason crypto is (theoretically) bad for illicit activity is that the blockchain is a permanent, trackable record. If I buy $100,000 “worth” of Etherium or BTC, I can prove that I own it because there is a “chain” of buys and sells that leads to my purchase. The entire chain must be intact to prove current ownership.
You cannot retroactively change three links ago. Or even one link ago. So if any link in the chain introduces malware, that must remain part of the chain from that point onward.
The rest is left as an exercise to the reader, as it were.