Tether: The Story So Far • Hacker News Board

Re: Tether: The Story So Far

#61

Post by rsync » Mon, Oct 28, 2019, 6:07 PM UTC

"Bitfinex claims to have believed, per their court filings, that CCC subsidized their services through net interest.

...

"This would make sense for a financial institution, but it doesn’t make sense for a money launderer, because risk-free assets generate very little interest (1% of a billion dollars doesn’t pay for the minimum viable financial institution) ..."

I find that interesting ... 1% of $1B is $10M ... and I appreciate that there is a tremendous complication and expense involved in creating a bank but I have to think it must be possible to bootstrap something like Everbank[1] with $10M or less ...

Can anyone confirm or deny ?

[1] Everbank (not owned by TIAA) is an online-only, no-branches honest-to-god US bank.

Re: Tether: The Story So Far

#62

Post by cowpig » Mon, Oct 28, 2019, 6:09 PM UTC

aazaa wrote: post #57

> The dominant use case for cryptocurrency is speculation. Speculators want to put value into the system, somehow have it become greater, and then take more value out of the system than they put in. This chestnut gets trotted out pretty regularly. What it ignores is the economic activity, largely untraceable, relating to payments outside of the US regulated financial system. Remember the ongoing problem in the US wit…

> This chestnut gets trotted out pretty regularly. What it ignores is the economic activity, largely untraceable, relating to payments outside of the US regulated financial system.

You follow this up with some political points that I generally agree with, but I don't believe have anything to do whatsoever with any significant portion of cryprocurrency's use.

Beyond speculation, cryptocurrency is used for:

- Money laundering (to evade taxes, regulations, sanctions etc)

- Various forms of financial fraud

- Payments for illegal transactions (usually drugs or ransom)

And to a much, much smaller extent:

- for the legal things cash is used for

The unbanked haven't been banked, and a new, programmable money hasn't yet emerged with much value.

I love the ideas behind crypto, but have been sadly disillusioned by the reality so far

Re: Tether: The Story So Far

#63

Post by mallin » Mon, Oct 28, 2019, 6:10 PM UTC

xrd wrote: post #44

Can you make this into a movie please? I will fund the kickstarter campaign.

You mean the ICO?

Re: Tether: The Story So Far

#64

Post by oarsinsync » Mon, Oct 28, 2019, 6:11 PM UTC

al2o3cr wrote: post #60

aazaa wrote: post #57

> The dominant use case for cryptocurrency is speculation. Speculators want to put value into the system, somehow have it become greater, and then take more value out of the system than they put in. This chestnut gets trotted out pretty regularly. What it ignores is the economic activity, largely untraceable, relating to payments outside of the US regulated financial system. Remember the ongoing problem in the US wit…

Not sure if "hey, it's not JUST for speculation it's good for criming too!" is much of an argument, but you do you.

Protecting yourself from civil forfeiture abuses doesn’t make you a criminal. It does have the potential of protecting your assets from lawful theft, assuming you can hold onto your keys.

Re: Tether: The Story So Far

#65

Post by ur-whale » Mon, Oct 28, 2019, 6:11 PM UTC

The one thing this very biased article does for me is highlight that there is a very strong market need/demand for an instrument like tether and that the incumbent financial system, much like the music industry discovering the internet, is trying to prevent that to happen by any mean necessary.

And they do have way deeper pocket as well as many, many more arms up political puppets to reach that goal.

Re: Tether: The Story So Far

#66

Post by lawn » Mon, Oct 28, 2019, 6:16 PM UTC

Analemma_ wrote: post #42

nostrademons wrote: post #25

Earlier quoted context omitted.

Yeah, people have been saying that the Tether stuff is super shady and just waiting for the bubble to pop for the better part of 3 years. It's very much been an open secret.

This is pretty revisionist. My own experience lurking in crypto communities (and reading the replies to @Bitfinixed), was to insist that everything was fine and furiously deny that Tether was a scam, and accuse me of being a dirty fiat shill for pointing out that Tether was a scam, right up until Tether starting admitting under oath in court that they were never backed by reserves, at which point the conversation swi…

You mean you've been swarmed by comments from a loud minority. Tether supporters employ large troll armies, to make it appear to be a popular opinion while it might not be.

Re: Tether: The Story So Far

#67

Post by BubRoss » Mon, Oct 28, 2019, 6:17 PM UTC

jacobush wrote: post #37

BubRoss wrote: post #30

Earlier quoted context omitted.

It does fill a need, and no one expects returns from it, but it most likely is fractionally reserved by btc. This means that if the price of btc drops too low and too many people cash out then it's over, because each tether cashed out will mean more and more btc are required.

That's optimistic. I think it's mostly reserved with nothing.

I think it is fractionally reserved with bitfenix's btc deposits. A while back you could see their master address, which hundreds of millions of USD worth of btc.

Re: Tether: The Story So Far

#68

Post by arkitaip » Mon, Oct 28, 2019, 6:18 PM UTC

ur-whale wrote: post #65

The one thing this very biased article does for me is highlight that there is a very strong market need/demand for an instrument like tether and that the incumbent financial system, much like the music industry discovering the internet, is trying to prevent that to happen by any mean necessary. And they do have way deeper pocket as well as many, many more arms up political puppets to reach that goal.

In what way is the article biased? Why do you think that patio11 is part of the "incumbent financial system"? Do you refute any of the evidence?

Re: Tether: The Story So Far

#69

Post by semiotagonal » Mon, Oct 28, 2019, 6:25 PM UTC

ur-whale wrote: post #59

semiotagonal wrote: post #51

Earlier quoted context omitted.

I don't see how there is ever going to be wide adoption of a currency that is currently held in its entirety by something like 0.2% of the population, and claims to be impossible to expropriate. When people see that kind of concentration of wealth, expropriation is a plus . Expropriation is how it gets redistributed. Nobody is going to want to make a bunch of early-adopting HODLers rich without knowing how to take mo…

I have never heard the lament of the no-coiner[1][2] put together so eloquently. You should have someone write music to these lyrics, you'd make a killing. [1] https://www.urbandictionary.com/define.php?term=nocoiner [2] https://www.coindesk.com/the-problem-with-nocoiners

My point still stands. If there's one thing people want to avoid empowering more than banks and governments, it's bitcoin wingnuts.

Re: Tether: The Story So Far

#70

Post by lawn » Mon, Oct 28, 2019, 6:26 PM UTC

> I have looked, quite a bit. I have not found a good use case yet

I'm always surprised that intelligent and knowledgeable people claim this. You haven't even found a single use case?

You don't think buying a VPN anonymously is a good use case? Or see the need for uncensorable donations? (Remember how the U.S. shut down Wikileak's PayPal donations when they exposed their war crimes?) Or that cryptocurrencies allow businesses to accept payments digitally, without the risk of their payment processor or bank completely ruining them? (PayPal horror stories swarm the internet.) Or how people in collapsing economies, like Venezuela with ridiculous inflation, can use them to cross the borders with their wealth somewhat intact?

And it's always dismissed with the same lazy arguments like "volatility" or "nobody uses it". Those are real issues for sure, but they don't invalidate the use cases.