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cosmojg • today at 2:13 AM • 2 replies • view on HN

Centralized stablecoins like USDT and USDC aren't layer-one cryptocurrencies like Bitcoin or Ethereum. They're more like applications running on top of other blockchains, usually as smart contracts, and their issuers hold admin keys which can freeze, mint, burn, and otherwise redistribute funds at will. As far as timing goes, stablecoin issuers can't actually cancel or reverse a transaction that's already in a block that's been mined, but they can freeze the receiving address afterward and burn the funds there, then reissue them elsewhere, which has much the same effect.


Replies

lambdaone • today at 10:25 AM

At which point they might as well use a database to keep track of the money, like banks do, and drop the cryptocurrency aspect, which was only ever a fig-leaf to keep regulators away.

Frieren • today at 5:45 AM

That sounds interesting. How is that different from a bank? What are the advantages and disadvantages compared with a traditional bank?

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