I deposited most of it in a binance savings account. Left some in my mobile wallet. Unfortunately I had to cash it out in order to spend it. Wish I didn't have to but nothing else accepted it.
These things will not ever be real if we don't start using them as currencies. I came this close to proposing Monero transactions to a business partner after some banking problems but the market isn't looking good right now, too volatile.
It's not useless though. It works just fine as a currency. It's just that nobody is using it. Like how Signal is more trustworthy than WhatsApp but nobody I know uses it so it doesn't matter.
Sadly currencies rely on network effects even more than instant messengers to be really useful. The fact that most people look at cryptocurrencies just like they were stocks and comparing against a buying/selling price in USD should be pretty clear. I know that people also invest in currencies and gain money on exchange fluctuations but it's more a "side effect" than the main purpose. With cryptocurrencies is the other way round instead.
All kinds of things rely on network effects, yet they managed to get started anyway. Reliance on network effects is not a reason to instantly dismiss something. Or else there would be no Hacker News.
The idea of a "currency"[0] attracting investment is kinda crazy in its own right. Normally currencies don't attract investment; you can bet on the difference between them, but you usually "invest" (buy) large amounts of it specifically to do business with the country or economic entity that issued it. You buy Euros to do business in the EU, not to "invest" in the currency itself.
0 - Which crypto currencies actually function as currencies is a matter of debate.
Betting on the difference between is done by buying and selling them. I'm no defender of cryptocurrencies but speculation and trading have been a major feature modern forex markets since their inception.
Modern treasury operations for large cash holders absolutely “invest” in currencies. They do so in the form of what cash they hold outside of their immediate needs and in what cash “equivalents” they keep on their books.
Investing is when you buy something that creates enduring, repeated value over an indefinite period of time, which you can capture without selling the asset itself. Real estate, for example, creates value (a place to live) over a long time, which you can capture either by living there yourself or renting it to someone else - without selling the house.
Stock is ownership in a business which creates value over time (shoes, tweets, cars, etc) which is captured in a variety of ways, like selling through retail or ads or whatever - without selling the stock.
This is why currencies, gold and the like are not investments. They do not, in and of themselves, create value. They may be good to buy/hold anyway though!
The only difference in investing in currency than other asset classes is that the value of currencies is entirely relative to other currencies in ways other asset classes aren’t.
In practice that doesn’t make a difference because all the mechanics are the same as any other form of investment decision.
First of all I should be convinced that cryptocurrencies are currencies and secondly I don’t see how this asset can be used by treasury to hold any cash for operational purposes. Besides I am not sure that is investing per se.
I personally wouldn’t hold crypto as part of an forex portfolio mix for a corporate treasury largely because they are currently not really currency equivalents but there might be treasury groups that do & the mechanics of holding them isn’t much different than any other fx holding.
As far as whether treasury asset allocations are investing or not is largely in the eye of the beholder but companies very frequently prefer to hold “cash equivalents” beyond their immediate operational requirements. If a treasury buys us tbills that is both a traditional investment & a fx position (in that it’s a usd we are viewing preferentially over other currencies in our portfolio).
When you put money in the bank, it's backed by 1% real assets (go fractional reserve money!)
So let's say I don't want to put my money into something that is only 1% backed (See the Greek dept crisis). I could store cash under my mattress, but that also has some major risks.
With a stablecoin like UST, you 100% own it. Governments can't confiscate it. It's 100% backed by the asset behind it (not talking about Tether here ;)). I do agree that it comes with its own set of risks, but some people might prefer that risk over the ones above.
Or maybe I'm a foreigner and want to keep some of my personal value in dollars, but don't want to do that in cash or at some local bank.
It's basically another option at your disposal. And as the market cap of those stable coins prove, lots of people prefer that.
So this stable coin is "100% backed by the asset behind it", like a dollar, which is "backed by 1% real assets (go fractional reserve money!)". What did I miss?
Because the stable coin provider lives in web3, and so is distributed over the whole world.
So in case of UST, as long as the Terra network is up, your coins are there.
What would it take for a government to take down the Terra network? I guess more than what it takes to take down the BitTorrent network. And last time I checked, I can still download any movie on there.
So a government being able to confiscate a wallet on a blockchain, seems very unlikely if you protect it well.
But why would you do that? When you can do exactly that with a traditional currency but much safer, much cheaper, much faster and much more conveniently.
There's more to it than multiplying the current price by the number of coins in existence: you need to consider the questions of liquidity and what an attempt to sell a non-trivial amount would do to those exchange rates as people start questioning whether they want to put more hard currency in. Cryptocurrencies are the weakest form of fiat currency and that means that there's a very real chance you simply cannot find enough buyers at the price you want to pay.
This can technically happen with other currencies, of course, but they're so much larger and more stable that it's orders of magnitude less likely. You need a world-shaking catastrophe not to find someone willing to take USD because so many contracts are written in USD, and there's plenty of need to pay taxes or interact with government contracts and employees.
