Coppola Comment

 Stablecoins aren't stable. So-called algorithmic stablecoins crash and burn when people behave in ways the algorithm didn't expect. And reserved stablecoins fall off their pegs - in either direction. A stablecoin that does not stay on its peg is unstable. Not one of the stablecoins currently in circulation lives up to its name.  Don't believe me? Well, here's the evidence. Exhibit 1, USDT since the end of April: Exhibit 2, USDC over the same time period: (charts from Coinmarketcap) Both coins de-pegged on 12th May. Neither has returned to par. Stable, they are not.  And no, USDC is not "more stable" than USDT. A stablecoin that can't hold its peg when everyone is piling into it is no more stable than one that can't hold its peg when everyone is selling it. Indeed, since stablecoins can be created without limit, there is arguably much less excuse for a stablecoin de-pegging on the upside. Stablecoin issuers can run out of reserves, but they can't r

The geeks to whom my post on probability was addressed responded exactly as I expected. "You don't understand the tech", they said. And they went on about network routing protocols and Dijkstra's algorithm . Someone even sent me a spec for an onion routing protocol for the Lightning network. I read it and sighed. They had completely missed the point. To be sure, I had made an incorrect assumption about Lightning. I assumed that Lightning devs respected property rights. It turns out that they don't even know what property rights are, let alone respect them. They see Lightning's pathfinding problem as entirely a technical matter. If it were, then solving it would simply involve developing algorithms to oversee the network and find the most efficient payment paths. I did mention this possibility in my post, in relation to recursive payment paths (emphasis not in original) : Payment routes could become very long and very complex without anyone knowing. Th

After the Welsh Assembly elections - in which UKIP did rather well - I had a Twitter exchange with an angry Welshman. He said: @dsquareddigest @Frances_Coppola Most UKIP votes came from, erm, English migrants to Wales. Unbelievable. The famous 'white flight'. — Gweirydd (@gweirydd) May 6, 2016 I challenged this, of course. But in the ensuing heated discussion, I misquoted him: @gweirydd @dsquareddigest Why? You didn't support your assertion that UKIP voters were all English immigrants. — Frances Coppola (@Frances_Coppola) May 6, 2016 As far as I am concerned, I misquoted him because I had not remembered his tweet accurately. Memory is fallible. But as far as he is concerned, I misquoted him because I am a liar. We do not disagree on the facts, but on their interpretation. Who is right?  What is the truth? In Greece, the Debt Truth Committee has drawn together facts about the origins of Greece's debt. And from this, it has deduced what it believ

In my post " The Nature of Money " I noted that money's use as a store of value is secondary to its function as a medium of exchange, and commented that long-term savings should not be held as "money" but rather as hard assets or investments in productive activities. I made it clear that my personal belief is that the latter is far preferable, because it benefits not only the holder but the rest of society too. This attracted the attention of a number of people who appear to have an almost religious belief in the virtue of gold as a store of value. The result was a bruising three days of intense debate on twitter, which was only ended when I blocked several of these people and warned off the rest. I was frankly shocked by the fervour of their belief: the more convinced they were that eventually I would "see the light" the less I wanted to have anything to do with them. I felt much as an agnostic must feel when subjected to the attempts of religious c

This post is a follow-up to my post last year about risk and safety. In that post, I assumed that people who want or need safety trust their government to provide it. But what happens if that trust is broken? Trust in government is the foundation of our system of nation states. People rely on government to defend the borders and provide a safe place for them to live, work and bring up children. More than that, people rely on government to create the prosperity they desire - either directly, through government spending programmes, or indirectly, through supporting and encouraging private enterprise.  And people - especially in the developed world - expect government to provide for them when they are unable to provide for themselves. Trust in government is also the foundation of our financial system. Currency issued by a trustworthy government is regarded as risk-free. So is debt issued by a trustworthy government. Neither has any value if trust in the government is destroyed. So