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Tether: The Story So Far

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Re: Tether: The Story So Far

#201

Post by jki275 »

spurdoman77 wrote: post #130
gamblor956 wrote: post #101

Earlier quoted context omitted.

True, but you can actually withdraw your balance. You cannot withdraw your Tether balance. They literally do not allow that. The best you can do is get an intermediary coin that some places might let you change into cash or another crypto.

As I understand tether allows direct conversions to fiat, you just need big enough amount. Also it is very easy to convert to bitcoin, which is very easy to convert to fiat.

You should read the article -- this is addressed in it.

Re: Tether: The Story So Far

#202

Post by CryptoPunk »

The article takes it is a priori that laws that institute warrantless mass surveillance of financial transactions, aka AML/KYC, are good.

This is an opinion held mostly by those in the elite: people living in wealthy/politically-powerful countries, and or those with lucrative jobs in government or government-protected industries like banking.

The President of Mastercard South East Asia sums it up:

https://youtu.be/bO4jHXjCXw8#t=4m12s

"If it's an anonymous transaction, that sounds like a suspicious transaction. Why does somebody need to be anonymous?"

AML/KYC laws create global second class citizens and massively centralize power in the hands of whichever state has the critical mass of financial power, which right now is the US and which one day could be another state that authors like this wouldn't be so enthusiastic about.

A great write-up on what KYC/AML laws, which are euphemisms for laws criminalizing financial privacy, mean for those outside of the elite circles:

https://np.reddit.com/r/MakerDAO/comments/de0sys/kyc_is_abso...

Another relevant article: the War on Cash

https://thelongandshort.org/society/war-on-cash

>>The proclaimed Death of Cash is thus an episode in the broader drama that is the Death of Privacy, the death of breathing room, and the death of informal, non-measured, unaccounted-for behaviour.

Re: Tether: The Story So Far

#203

Post by simonebrunozzi »

nostrademons wrote: post #161
simonebrunozzi wrote: post #142

Earlier quoted context omitted.

Agreed - also IMHO it's mostly used for speculation, and hopefully shouldn't be the case. Speculation can't last forever, but a few good use cases might.

Interestingly a lot of the speculation - at least today - is actually a bet on disaster. Many wealthy individuals and institutions are buying Bitcoin as a hedge against currency collapse. It's not so much that they think Bitcoin will be worth more in the future: it's that they believe the U.S. dollar and all other financial assets will be worth less . (Or in some cases, it's just part of a hedge: the rest of the hedg…

I'm not sure I agree with you. What we constantly hear is exactly that, hedging against global economic collapse. But I see no strong evidence that in the face of such an event, Bitcoin's price should rise.

What I see, instead, is a bet on this big speculation bubble to continue for another few years, hoping to cash out before it happens.

Re: Tether: The Story So Far

#204

Post by CryptoPunk »

jcranmer wrote: post #91
lawn wrote: post #84

Earlier quoted context omitted.

And all the U.S. had to do is make drugs illegal, and it would disappear. (Or not.) > other than the anonymous money flows Are you saying that anonymous money is immoral and should be made illegal, and in the process dismissing all use cases that benefit from anonymity? And no, cryptocurrencies are perfectly legal in most of the world.

I'm pointing out that anonymous money flows are already effectively illegal, given the KYC/AML laws. At some point, any Funny Money system you create has to interact with the fiat system so that people can actually do stuff like pay their utility bills, and if Funny Money is triggering compliance alarm bells, and at that point, well, read the article. Something else to point out is that just because a system is unsus…

Anonymous money flows aren't illegal. There are those that would like to make them illegal, but all they've managed to institute so far is KYC/AML laws relating to third party payment processors. These laws don't apply to cash or its electronic corollary, cryptocurrency.

Until a law is created that makes unmonitored use of physical and electronic cash illegal, anonymous money flows aren't across-the-board illegal.

One obstacle elitists have in instituting such laws is that enforcement would be costly, involving heavy-handed treatment of large numbers of end-users. Trusted third parties like banks are comparatively easy targets, being much less politically costly to repress.

Re: Tether: The Story So Far

#205

Post by [deleted] »

alwillis wrote: post #167
falcolas wrote: post #77

Earlier quoted context omitted.

All of your use cases involve anonymity. Crypto currencies don’t provide anonymity. Sure it’s not directly tied to your name and address, but it’s quite possible to make that tie. Such cases are on the news fairly frequently.

Crypto currencies don’t provide anonymity. It’s pretty easy to make bitcoin transactions anonymous. 1. Wasabi Wallet runs over Tor and has built-in support for CoinJoins: https://wasabiwallet.io 2. Samourai Wallet has Whirlpool, another mixing technology, among other security features: https://www.samouraiwallet.com/features 3. You can skip the usual exchanges and use Bisq for peer-to-peer trading over Tor, including…

[deleted]

Re: Tether: The Story So Far

#206

Post by mikekchar »

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…

IMHO there is one killer feature for decentralised payment systems: it allows people who can not get a bank account with reasonable terms to make monetary transfers. People who are born into rich first world countries don't realise how difficult it can be. In many places in the world you can not get a bank account unless you have an address. You can not rent a place unless you can transfer money. You are stuck. Even when I first moved to the UK, there were many flats I couldn't get because 1) my bank account in Japan refused to let me transfer money internationally (because I'm wasn't a permanent resident of Japan) 2) I couldn't get a bank account in the UK without a permanent UK address 3) Most letting agencies wouldn't take cash. I eventually had to make a 5 month deposit (think London prices!!!) to get someone to take cash so I could get a bank account.

There are lots of these kinds of catch 22s in the world and they are much, much, much worse in developing countries that have a large disparity between haves and have-nots. There are places where you are basically locked out of commerce of anything larger than pocket money -- because that's the way the large institutions want it. If they allow you to do business as all, it comes with a really hefty price tag.

The potential Bitcoin for me has always been one of 2 things: 1) a potentially convenient way to do online shopping 2) a way to enable commerce for the poor or disadvantaged. For years and years, I was unable to to get a credit card in Japan because they were unavailable to people without permanent residence status. Even now, the only bank that agreed to give me a business account for my consulting company refuses to allow the business to have a credit card. I can not buy any business related supplies on credit. I can not make online purchases for my business in most cases. This is insanity, but there are no banks who care where I live and they have a monopoly.

This is the advantage of something like Bitcoin. It breaks the monopoly of the banks. Of course, that comes with a whole raft of problems, but it really is frustrating when people in privileged positions just refuse to put the effort into seeing that their privilege doesn't extend to everyone in the world.

Edit: I should actually add that patio11 does actually understand the banking difficulties in Japan, and has written a bit about it before ;-)

Re: Tether: The Story So Far

#207

Post by cycrutchfield »

ur-whale wrote: post #43

I read very little in that article that's operationally in any way different from what happens daily in bank to bank back-office plumbing. The only difference here is that it's a lot more visible to the general public because it's A) crypto B) new rather established means of transferring value between financial institutions.

You’re being downvoted because, no, that’s not at all how it works.

Re: Tether: The Story So Far

#208

Post by cycrutchfield »

kaffeemitsahne wrote: post #175

Why does the commentariat here always gets so triggered over anything cryptocurrency-related?

Because anything critical of cryptocurrency threatens them where it hurts most: their wallet. So they are incentivized to jump in and cast specious assertions and muddy the waters where they can.

Re: Tether: The Story So Far

#209

Post by cycrutchfield »

colinhb wrote: post #123
arkitaip wrote: post #68

Earlier quoted context omitted.

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?

I suspect it's because patio11 is employed by a payment processor, Stripe. Stripe's business is taking a percentage of payments / transfers. One of Bitcoin's usecases is making payments / transfers with lower interchange / wire fees than existing financial system. The argument is the same as saying that someone employed by gun manufactures is biased when writing about proposed gun laws. (I don't have a view on whethe…

Yeah, how dare Stripe skim money off of transactions! That’s Bitfinex’s job!

Re: Tether: The Story So Far

#210

Post by john_moscow »

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…

Except limited supply isn't your silver bullet. In fact, before the Great Depression, most of the world's currencies were backed by gold [0], being very similar to Bitcoin. And then it turned out that when an economic downturn happens, limited supply leads to a deflationary spiral [1], that has much worse long-term effects than a controlled inflation. This eventually evolved into the current system where the inflation is controlled via quantitative easing by the central bank, which is more or less accountable to the political party in power, which is more or less accountable to the voters. The system isn't perfect and is prone to abuse by the banks and politicians, but IMO is more resilient than a purely algorithmic solution.

[0] https://en.wikipedia.org/wiki/Great_Depression#The_gold_stan...

[1] https://en.wikipedia.org/wiki/Deflation#Deflationary_spiral

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