from Hacker News

Crazy idea: an asset backed stablecoin that you can't redeem for dollars

by Brycee on 4/21/22, 6:24 AM with 1 comments

Not saying wether this is a good idea or a bad idea. But 'burning' cash or deposits into a custodial non-lending account which is attested-to monthly to be holding 100% cash, and which you cannot withdraw from would represent the ultimate voluntary boat burning for those who are serious (and maybe stupid) about creating a money for the internet. Value is not 'locked' until there is no way out. why is this a good or bad idea?

  • by hnlmorg on 4/21/22, 6:38 AM

    A couple of problems I see with this:

    1. You cannot stop people from exchanging this with fiat tender. At least not without some kind of legal terms of usage but that would work against appeal many have for cryptocurrencies.

    2. If you could prevent exchanges from existing, then what would be the point of it? It effective just becomes a collectible with no practical value because you cannot exchange it for goods nor services (how would an online retailer exchange it to pay for server running costs, stock and staff?) You’d never achieve critical mass because nobody can spend it until it reaches critical mass. Basically catch 22.