Read_887 - A Half Baked Thesis on Stablecoins

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Jun 23, 2025

What if stablecoins aren't a threat to Bitcoin but a vital stepping stone? The discussion dives into whether they betray Bitcoin’s principles or represent a Trojan horse for a more robust financial infrastructure. The complexities of stablecoins are examined alongside eCash's potential to revolutionize digital money. The historical evolution of governance and the political implications of these technologies highlight their ability to resist corruption. A transformative shift in how we perceive money is on the horizon, igniting the debate around financial systems.

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INSIGHT

Stablecoins As Payment Rail Upgrade

Stablecoins are useful because they provide far superior payment rails despite risks.
Their use warms users to digital bearer assets, potentially leading towards Bitcoin-native infrastructure.

INSIGHT

Stablecoins' Scaling Challenges

Current stablecoin models won't scale because blockchains fundamentally don't scale.
Usage increase leads to economic unviability or over-centralization, limiting growth potential.

INSIGHT

Network Effects Centralize Issuers

Current stablecoin market dynamics create strong network effects favoring single issuers.
This impedes competition and centralizes power, similar to Facebook's social dominance.

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"As will become clear as the argument progresses, I actually think the outcome to which I am building up is where things have to go. I think the technical and economic incentives at play make this an inevitability rather than a “choice”"
~ Allen Farrington

What if the stablecoin boom isn't a threat to Bitcoin, but a stepping stone? In this episode, I dive into Allen Farrington’s "A Half Baked Thesis on Stablecoins" and follow it with a massive guy's take unpacking the implications. Are stablecoins a betrayal of Bitcoin principles, or are they the Trojan horse for Bitcoin-native infrastructure? What happens when fiat settles over Lightning? And how could ecash and Taproot Assets reshape everything we thought we knew about digital money? There's a quiet revolution happening at the payments layer—and the stablecoin debate might just be the signal buried in the noise.

Check out the original article: A Half-Baked Thesis on Stablecoins (Link: https://tinyurl.com/y442kkkc)

References from the episode:

Layered Money by Nik Bhatia (Link: https://tinyurl.com/yndssenp)
Check Your Financial Privilege by Alex Gladstein (Link: https://tinyurl.com/4s3n595a)
Only the Strong Survive by Allen Farrington (Link: https://tinyurl.com/3au8zmtr)
One from Many: VISA and the Rise of Chaordic Organization by Dee Hock (Link: https://tinyurl.com/348ykwh9)
Electronic Value Exchange: Origins of the VISA Electronic Payment System (History of Computing) by David Stearns (Link: https://tinyurl.com/2e69874x)

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⁠Bitcoin Audible on X⁠ (Link: https://twitter.com/BitcoinAudible)
The Guy Swann Network Broadcast Room on Keet (Link: https://tinyurl.com/3na6v839)

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