Smart contracts and stablecoins by extention sound technologically interesting, but at the end you always rely on trusting people.
The core of the financial system is about managing trust and therefore a social issue, not a tech issue. It'd be nice if more tech nerds would internalize that tech can't solve social issues on it's own
In the freebanking era that the US had (before the FED was founded) every bank emmitet their own dollar. And, of course, there were banks over-issuing and bank runs left people without their assets. But that was before we had free flow of information and the internet. In todays world you can monitor and trade stablecoins, market cap, exchange rates in a freebanking system in sub-seconds. Any erosion in trust will immediately result in price fluctuations. We need a digital freebanking era, and it is a shame the genius act fell through. Exporting the dollar to people without access to banking would benefit the US (but I get that it currently mostly benefits trumps family).
But: Are you sure that Tether is actually backed by USD? It certainly isn't free information.
But it is in the nature of stablecoins that you cannot check their vault. You have no idea if they actually store the assets they claim to store. And whether they will honor their promise to exchange that asset for their tokens.
I don't think you're using that term right. Not knowing how something works doesn't mean you're cargo culting.
People are not so knowledgeable about the other coins because the whole point of magic internet money is that it can't be controlled by anyone. If your entire account exists in some box somewhere under the control of some entity, how is that any different from a bank (which also mostly doesn't operate on cash but just moves bytes around)?
Your problem is treating it as magic internet money. It is not - you literally have the sourcecode to truly assess how it works. Your account is not with some entity. Magic internet money is your bank account - if your bank decides to set it to 0 tomorrow it is "magic" - you have no idea how that happens, and you have no guarantee that it doesn't happen. Or when your credit card is suddenly blocked because your bank decides is "suspicious activity" - again, that is black magic.
Bitcoin is the opposite of magic internet money. It is deterministic to its core. As for other cryptocurrencies - well they are mostly open source so you can check them.