Crypto Crash: How Stable Are Stablecoins?

US News & World Report suggests that holders of crypto assets, including supposedly stable stablecoins, take a good look at the assumptions behind crypto as an investment.

Stablecoins are just one more example of what inevitably happens to decentralization when it’s subject to real-world pressures. It turns out that governance is required, and as the decentralization advocate Lawrence Lundy-Bryan notes,

“There is no such thing as decentralized governance.”

Governance, in turn, requires accountability, and accountability is meaningless if it doesn’t start with the individual.

You can’t achieve accountability with a collection of commercial product widgets. Accountability calls for a source of measurably reliable identities of users that are accepted by all within a domain. That in turn implies a source of authority that examines those identity claims and attests to their reliability, as measured on a scale. And that source of authority cannot be a commercial enterprise which, when it’s successful, can be sold to the highest bidder (who will inevitably be the bidder whose intention is to weaken, and therefore corrupt, its standards.)

I have discovered, and become a part of, a group that compares itself to an “authenticity growers’ cooperative,” modelled after an agricultural cooperative. You may not be aware that brands such as Land O’ Lakes, Cabot, Florida’s Natural, Ocean Spray and many other food brands are actually agricultural cooperatives. You won’t read about them in the Wall Street Journal because you can’t buy their stock – unless you’re a farmer who actually grows the crop that the coop packages and sells. It’s a wonderful business model that completely avoids the awful excesses of stock-price-driven public companies.