0 sats \ 3 replies \ @KenyaCoin 4 Aug 2022 \ on: Earners need stablestuff, hodlers don't bitcoin
As long as there is conversion between stablecoin and bitcoin is ~ instant and ~ cheap (e.g., done on LN and 0.2% or less in fees), I don't really care which payment method is used to pay me -- bitcoin or stablecoin.
There are some countries where the local fiat currency is losing value at a relatively high rate and this in general will cause it to be so that bitcoin can be sold through a P2P trading platform at a premium. The amount of the premium can vary from place-to-place and from one point in time to another but selling bitcoin at a 3% premium is typical by even by taking a sitting offer, and a buyer paying a higher amount (e.g., 5% or 8% even) can oftentimes be found if the offer can sit waiting for a buyer.
So even if bitcoin has high exchange rate risk, if the amount of time holding the bitcoin is measured in hours and not multiple days or longer, receiving payment in bitcoin can be advantageous to receiving payment in stablecoins.
Agreed that I'd rather receive payment in bitcoin vs a stablecoin. The issue here is, what do you do in between pay day and your rent being due?
If you don't have the savings to cover a drop in the bitcoin price, you may not be able to pay your bills. Stablestuff is a reasonable parking spot for a few weeks. Should people store long term savings in stablestuff? I wouldn't.
reply
Until we have a circular economy where either bitcoin or a stablecoin can be spent, for most the funds will need to be converted into local fiat. My point was, if I am going to convert to fiat, I might as well take advantage of the premium available when selling on P2P trading platforms. And thus, to do that I'ld want the payment to me to be in bitcoin, otherwise I would need to first convert the stablecoin I receive into bitcoin before being able to sell the bitcoin.
There can also a premium available when selling stablecoins as well, for the same reason as there is a premium when selling bitcoin, but P2P trading platform have either no stablecoins supported (i.e., bitcoin only), or little liquidity and a mismatch between the stablecoin I received and the ones available on the platform I prefer to use.
I'm aware that this "cash out through P2P exchange" is not the typical use case, but I was just trying to make the point that hopefully it is the payment recipient who gets to choose: bitcoin or stablecoin.
reply
Thanks for providing the info about how you use p2p exchanges.
"hopefully it is the payment recipient who gets to choose: bitcoin or stablecoin."
We'll continue to pay in bitcoin at stak, but having a choice to be paid in a stablecoin would be a popular option in some countries.
reply