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Tether: The Story So Far

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Re: Tether: The Story So Far

#151

Post by rafaelm »

skywhopper wrote: post #83
lawn wrote: post #70

> 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 bu…

Cryptocurrencies aren't anonymous. They also don't eliminate payment processor risk: fraudulent exchanges, hackers, and your own mistakes can all lose or lock you out of your money. And generally there's far less legal recourse when that happens with crypto. I'm skeptical how many people in Venezuela saved their fortunes via Bitcoin et al, but if you have some data on that, I'd be curious to hear about it. In particu…

This is of course anecdata, but I've personally used BTC to send remittances in Venezuela.

I'm not sure how many people here use BTC as a means of preserving the value of their money since most people would rather hold USD, but for sending remittances, it cannot be beat.

As another interesting anecdote, my sister is in Argentina and a bunch of friends started asking her how to buy BTC before the election yesterday. Seems that those that managed to move their Argentine pesos to BTC did so just in time: https://www.aljazeera.com/ajimpact/argentina-central-bank-cu...

Re: Tether: The Story So Far

#152

Post by thedudeabides5 »

tptacek wrote: post #120

The story, summarized, as I understand it from this article: 1. It's difficult to bank cryptocurrency because traditional finance has KYC/AML procedures and cryptocurrency exchanges (generally) don't. 2. For awhile, the largest exchange was Bitfinex. 3. Bitfinex suffered a breakin and lost $70MM worth of Bitcoin, and became insolvent. 4. Bitfinex took 36% of all clients deposits/balances to make up for the loss, and…

Thank you, this synthesis was way more helpful than most of the other comments here.

Re: Tether: The Story So Far

#153

Post by mdemare »

hinkley wrote: post #109
oarsinsync wrote: post #64

Earlier quoted context omitted.

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.

I was reading something recently, but I can't recall where, talking about one of the advantages of growing potatoes in feudal UK was that it was harder for the lord to steal them. You never knew if the lord was a little short on money this month that he wouldn't show up with a wagon and cart off a bunch of your hay or vegetables (the fraction you were allowed to keep, not what you owed the lord) to sell. Since you co…

Worth reading: https://slatestarcodex.com/2019/10/14/book-review-against-th...

Re: Tether: The Story So Far

#154

Post by bko »

Geee wrote: post #138

Isn't it curious that he writes a lengthy post about frauds made possible with the current banking system (trust-based reserve) and then doesn't find any use for cryptocurrency? This is exactly the reason why Bitcoin was invented; its supply is mathematical and can't be over-inflated. Satoshi even included the criticism in the Bitcoin's Genesis block: "The Times 03/Jan/2009 Chancellor on brink of second bailout for b…

> Obviously Tether (or any private stablecoin like Libra) is even worse than a regulated fiat currency, and should be strictly illegal.

Having a system of tokens that serve as an IOU to a stable basket of goods should be illegal? That's essentially how banks work, you give them money, they give you an IOU. I imagine a stable coin could be designed with enough proofs and audits to give you certainty. I think a well administered stable coin could have a transformative role in many areas that have capital controls, similar restrictions or high inflation.

Re: Tether: The Story So Far

#155

Post by vrodic »

Geee wrote: post #138

Isn't it curious that he writes a lengthy post about frauds made possible with the current banking system (trust-based reserve) and then doesn't find any use for cryptocurrency? This is exactly the reason why Bitcoin was invented; its supply is mathematical and can't be over-inflated. Satoshi even included the criticism in the Bitcoin's Genesis block: "The Times 03/Jan/2009 Chancellor on brink of second bailout for b…

It's good that the banks can be bailed out. It's good there's some inflation. It saves capitalism from itself (the rich acummulating all or practically all the coins).

Re: Tether: The Story So Far

#156

Post by ur-whale »

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…

> remember how the Department of Justice has deputized every financial institution in the US (and many outside of the US)

Most people simply have no idea how wide, deep and far the sinister arm of the US KYC/AML process reaches in the world economy, the level of control and power it grants the USG, and how much inflamed badwill the US is collecting internationally because of that.

Russia and China and trying as hard as they can to get out of the USD system for a reason. I can't wait for them to succeed in lifting the yoke of the US currency reserve, and when they do, the world will be a much better place.

Re: Tether: The Story So Far

#157

Post by revel »

arzt wrote: post #14

"Players in the crypto ecosystem will be shocked, shocked to know it got this bad, this quickly, but this has been an open secret for over a year." ---- I'm not entirely in agreement the crypto world will be shocked tether is insolvent. As long the the fiat gateways exist to exit the system with gains intact, most could care less about tether. It's musical chairs.

It's like 2007/2008 again. Everyone savvy knew there was fraud in the mortgage market at the retail level but they didn't know how pervasive it was. To some extent the Chinese commercial real estate market is the same way: nobody trusts the numbers but no one is sure how bad it is. The author is right that there is this pressure to win the money back and that this is where things can get really out of control. Of course, there is a remote chance they can pull a rabbit out of a hat and make enough money legitimately to pay back all the people they owe, but I doubt it.

Re: Tether: The Story So Far

#158

Post by revel »

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…

Crypto communities are a lot more credulous than financial communities. Every institution I ever talked to had approximately zero trust in tether. Some of them chose to do business with bitfinex anyway. I'm guessing they regret that decision enormously

Re: Tether: The Story So Far

#159

Post by kova12 »

I'm in agreement that tether looks very much like scam. There is no way to audit holdings, and it definitely should not be trusted. You essentially trading crypto for promise to deliver fiat without any guarantees of fiat handling institutions

I don't necessarily agree that the same estimate applies to the rest of cryptosystem. The promise that it holds is the one where money is separated from governments. Crypto, such as bitcoin aspires to be anonymous, untraceable and fungible. Now: bitcoin is unfortunately neither at this stage, but that's the spirit it used to have in the beginning. The whole "money laundering" is a made-up crap. It's the establishment trying to control people through monetary means, and since establishment controls financial industry, they made it easy for themselves to confiscate people's money via absurd laws and absurd regulations. This is what crypto is trying to fix. It is money, that government can not take away. Now, again: I'm not having an illusion that if they would really want, they wouldn't. But it's hard. And it's even harder to do it on the massive scale, like they do with all their bullshit QE. It's sad that crypto is associated with bad actors though.

Re: Tether: The Story So Far

#160

Post by pietjepuk88 »

lawn wrote: post #89
skywhopper wrote: post #83

Earlier quoted context omitted.

Cryptocurrencies aren't anonymous. They also don't eliminate payment processor risk: fraudulent exchanges, hackers, and your own mistakes can all lose or lock you out of your money. And generally there's far less legal recourse when that happens with crypto. I'm skeptical how many people in Venezuela saved their fortunes via Bitcoin et al, but if you have some data on that, I'd be curious to hear about it. In particu…

> Cryptocurrencies aren't anonymous. Monero is. > They also don't eliminate payment processor risk Of course they don't magically solve all problems, but that doesn't make them useless. > I'm skeptical how many people in Venezuela saved their fortunes via Bitcoin et al I've read some article from people who did it, but I don't think it's common. The problem with leaving the country is, how do you take your assets wit…

Monero is unfortunately not really anonymous either in many common scenario's, like repeatedly sending payments to or from the same address. [0] It's definitely better than Bitcoin though, but far from anonymous.

Overall I think that cryptocurrencies (and the internet overall) could use some better privacy strategies. Tor-like routing, no possibility of finger printing, etc.

[0] https://slideslive.com/38911785/satoshi-has-no-clothes-failu...

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