To become a bank you need an account at the central bank. Getting a banking license is difficult. And even after you get it, central bank can freeze your assets any time.
> It's crazy that they messed this up, Tether is basically a money printing machine, all they had to do was be solvent.
> Tether is a fundamentally a risk free money making concept
To me it sounds like you don't really understand the risks of tethers business. It is light-years away from being risk free, because you are on the mercy of the banks where you store the fiat. The banks can freeze your money any time, as they now did (AFAIK).
If you are operating a business with unclear regulation at this level, you can't really rely on banks like normal businesses can. The banks will cause problems with pretty high probability.
Full-blown government collapse is quite far-fetched scenario. Infrastructure in venezuela still works at some level, however poorly. Bitcoin works in places pretty well where goverment is crappy but still not that crappy, that you have electricity, internet, etc.
> They are selling gold to afford these necessities.
They are probably using anything that there is available as a currency replacement. I would bet that mostly physical USD, but also gold, bitcoin, cigarettes etc. I don't think gold is the main replacement when national currency starts hyperinflating, just a tool among others.
Well, if you follow that logic your whole life, you will have lots of bitcoins when you die. Happy life I guess?
The point of money, currency or any financial asset is to produce value to your life. If you think bitcoin will develop in value, it makes sense to spend less-valuable assets before those bitcoins, but at some point you probably want to use your bitcoins as well for living. Money should be a tool to enable nice life, you shouldn't live for money.
Quite often this kind of instruments might be "tradable debt instruments" which can't be converted to actual bitcoins, but can be traded back and forth on the platform to traditional currencies. The issuing company maintains the peg to the bitcoin market value, probably using futures or similar instruments.
Of course they might also enable bitcoin withdrawals/deposits but I somewhat doubt it. There are similar offerings on other traditional platforms and usually they work this way.
Well, banks can give out loans too eagerly to wrong people meaning that the resell value of the loan can be much less than the value of the loan. In fact nowadays it is not that rare for bonds to have negative returns.
Banks can fuck up and go bust. It doesn't happen often but it happens.
Usually by insolvency is meant that the bank doesn't have enough liquid, hard assets to cover up the withdrawals from the bank. Bank can have varying assets such as bonds that it has lent out, but if the bank has lent out a lot of money to some people who can't pay the loans or other banks are unwilling to buy, it can be insolvent even if on paper it has "assets".
Most of the banks assets are not liquid, such as the loans they have lent out. Banks quite often have problems that they give credit out too easily, which leads to the situation where their assets aren't worth much. They often also give loans to the stakeholders of the bank which makes it a bit sketchy.
On the other hand people have been saying the same about tether for many years, and it still has kept the peg at pretty good levels. And it is still the most liquid and biggest "stablecoin". Many seem to need this kind of thing so they keep using it even when there are risks involved.
Yeah they are loans, like apartment loans. The loan might be for something like 20 years and might default.
In my opinion having assets like house loans is pretty far away from being "backed". If enough customers want their money out, bank can go bust. If they have lent the money to wrong people, they also can go bust. Banks go bust now and then.
Small amounts are somewhat easy to exchange, if you want to exchange millions it gets much, much more difficult since you have to explain the source of funds to the exchanges and banks involved. If you have hacked them they will use blockchain analysis etc.
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To expand on it further, even if you are lucky to have joined a unicorn, you still didn't get a good deal in comparison to virtually everyone else involved in the company. The founders are likely billionaires and you made off with a low 7 figure outcome while taking on only marginally less risk. That's not a good deal by any reasonable definition.
I wouldn't see the risk of being an employee and founder as similar. Typically often founders are for time periods without salary etc. Early employee should just consider it as a job with more risk of the company going down under (that risk also exists in more established company). You can request more salary for the job or some additional perks (such as options).
I think for the employee the risks of joining to startup are quite easy to manage compared to a founder.
There seems to be some kind of understanding that start-up means aways working overtime etc. AFAIK that is not often the case, but people can work quite normally in early-stage companies as well. And mostly it is the founders who are working hard and employees are not required to work the same way.
I have used Bitcoin to buy various things and used it as a savings instrument, I see that it has solved problems for me. Of course I could use other tools for that, but if you think Linux is superior that doesn't invalidate someones experience who is using Windows.
Generally there seems to be lots of people who don't use cryptocurrencies and think that they don't solve any problems - OK whatever, don't use them, but there are loads of people using cryptocurrencies for whatever and your opinions are not objective measure on their value.
> It's very simplistic to say that (low, predictable) inflation hurts individuals.
Hurting might be the wrong term. Analogy would be something like having some bonus card which gives you 2% off for every purchase. Some people obsess about having that kind of card, but most people wouldn't care, because it is only 2%. Obviously the 2% difference isn't "hurting" most people, more like very small tax.
Btw there are cashback credit cards which give back something like 0,5% to 1%, I wonder how popular those are...