💸 [Analysis] Fiatcoins want to be aggregators, aggregators centralize power – Tony Sheng

If a fiatcoin is successful, it aggregates user demand (aggregation theory) for the applications of public blockchains as users must visit the issuer to go from fiat to crypto. The dominance of any given fiatcoin leads to a feedback loop further increasing the dominance of that fiatcoin which gives the issuer a growing database of identity-verified individuals. Though fiatcoins drastically increase the user-base for crypto, it also comes with the great cost of censorship. Furthermore, due to the incentive and power structures, it is unlikely that fiatcoin issuers will eventually swap out a fiatcoin for a censorship-resistant crypto.