Occasionally in YC founder circles a new founder will raise a bunch of money and then ask something like "What's the best way to invest all the money our company just raised?"
The responses are always along the lines of "Your startup is already risky. Don't innovate in areas of your business where the status quo is known to work. Innovate your product + technology, don't be innovative with your company's finances, HR, etc"
That advice always stuck with me. It just makes a lot of sense to do things in the most boring way possible, except where it matters (your competitive advantage <-- that's where you innovate, that's where you set yourself apart)
Running a startup is distracting enough. Doing things non-standard just adds to the list of distractions that you don't need as a founder.
Both are equally stupid, and you have to exchange them to buy most of the things you might need.
It'd be friction against spending, a little bit of investing, in the case of gold, but friction against spending with crypto only makes sense if you don't lose a lot on moving it into a real bank account.
The Fed is interested in converting the debt to another medium, for obvious reasons. Stablecoin looks to be the leader, since a number of the new administration have talked about it in the last decade (re: Scott Besset stablecoin speech).
I can understand why some companies want their runway in a currency that may go up during a transition (a more favorable exchange rate). There's little lossage in the exchange of USDT/USDC in the short term. Seems like a hedge strategy.
Nope. Not until these companies allow an independent external audit. I don't take "trust me" from a crypto bro as proof of backing funds.
Oh, and the current administration is clearly corrupt, so this administration wanting to convert the US to bozo bucks isn't one for the plus column.
This is a good distillation of the inherent issue going forward with crypto. The people in tech I trust _least_ (cryptobros) are selling in a service that I require the _highest_ level of trust (finance). It's a very bad sales pitch.
And if you didn't know that's what you're supporting with the hype train, well now you do. Those folks all love and greatly benefit from difficult to audit financial instruments.
Neither of these were "publicly anti-Trump" as much as Garry Tan has been.
Actually, where'd you even get that from? I cannot with my life imagine that Dalton would publicly post about politics. I've googled around a bit and found nothing either.
Either way, my point is it's an extreme stretch to believe their departure, Trump, and crypto stablecoins are somehow related.
https://news.ycombinator.com/item?id=31686140
https://forum.effectivealtruism.org/posts/5mghcxCabxuaK4WTs/...
(FWIW, it did end well, as going with a relatively large federally insured bank meant that no one lost any money during the crash)
Of course today startups are probably using Mercury/Ramp/whatever.
If I had an FDIC account I would basically want a bank that invests my money in the most wildly hazardous ways with the most reckless financial controls to give the max returns and flexibility, then let everyone else bail me out if it went south.
I'm waiting for the demands for a bailout when the next big stablecoin goes bust. Especially if it's Trump's.[1]
[1] https://finance.yahoo.com/news/trump-usd1-stablecoin-hits-5b...
https://ndl.ethernet.edu.et/bitstream/123456789/41452/1/112....
Ironically enough though, could feudal currencies actually be better on a blockchain? Think shares in a business. Bitcoin is backed by nothing, but if businesses all trade on Ethereum–style L2s, you could lock in whatever you want. Think: I want 2 tonnes of lumber for my new house build so I will trade whatever for 20000 $HomeDepotLMBR and it entitles me to exactly that amount when I go into the store.
You'll never guess, but most banks didn't actually have enough specie to back their notes, and banks constantly failed during the Free Banking era. If a bank failed then the notes value went to zero, and so notes always traded at a discount to their face value, and there were even brokers who were paid by local merchants to give them the latest correct discount rates for all the local banks (updating daily), and if a bank note got far enough away from the bank that the local broker didn't know about it, well, then it wouldn't be accepted by a local merchant. So effectively a similar result here in the capitalist, non-aristocratic US for about 15 years.
This is an enormous amount of overhead in actually running an economy, which was why it was ended and we had the National Banking Acts of 1863 and 1864 to try to create a more uniform currency, and the Bureau of Engraving and Printing created in 1862, etc. Because the actual businesses started to demand simpler accounting, and so more financial regulation of the banks.
That sounds like a libertarian paradise. Sign us all up!
- Transferring money across regions with the best 'normie' tools (eg Transferwise/wise.com) is multiple orders of magnitude more expensive than $0.0000015 (tranferring USDC or another GENIUS-compliant stablecoin on Solana).
- You can easily put stablecoins in a Lulo savings account and get 5% interest instead of 0.1% of whatever your bank provides. Yes Lulo has insurance.
- The Genius act regulates stablecoin provision. US-issued stablecoins are backed by government bonds with proof of reserves. USDC and PyUSD are compliant already, USAT exists because USDT isn't compliant.
- There's no offramp fees for PyUSD, and you, random American, have a Solana address in the 'crypto' tab of your Paypal app. 1234.56 in PyUSD means you get 1234.56 in Chase or Wells Fargo or whatever. In future your bank will hold these assets directly without need to off-ramp at all.
If you want to throw your investors money away to outdated percentage point cross border payments systems you're welcome to.
I don't see how that's relevant to YC startups. Startups can't legally pay their employees in crypto through transfers, any more than they can write checks out of their bank account or pay their employees in cash. I've paid an overseas employee in BTC before, but we still had to go through a payroll provider and do everything above-board to satisfy IRS requirements.
I edited my comment above to provide answer. Swap whatever stable to PyUSD (negligible) and then send to your Solana address in Paypal. You can also hold crypto in US banks pretty soon.
- I bet with whatever way I can convert the stable coin to my local currency (EUR), that it will be more expensive than Wise. Certainly Paypal is really expensive (as in SWIFT transfer would be better)