Earlier quoted context omitted.
It’s digital gold you can use to magically transport any drug to your doorstep. That’s an amazing killer app.
Meh, USD is much better for that. Lots more drug dealers accept it.
Not near you, and not safely.
Tether price manipulation
401–410 of 490 posts
Re: Tether price manipulation
#402Re: Tether price manipulation
#403Earlier quoted context omitted.
However three years on, crypto still does not have a "killer app" and is 99.99% used for speculation. The killer app is decentralized, permissionless, open source, and censorship resistant network. Bitcoin's narrative has had to morph from "digital currency" to "digital gold". Gold morphed from worthless rocks in the the ground, to coins traded by traveling merchants, to stores of value that were eventually centraliz…
The hurdle for bitcoin is finding a way for people to turn it into a currency they can use. This is where you end up with a centralized exchange layer built on top of it. I can make a $12,000,000 transaction for $.35 but if I actually want to get the money, I have to pay 2.5% to a legit exchange or take my chances on some janky ass exchange. Why not just transfer the money via ACH and pay the small fee and save mysel…
In a long enough time frame, people transact with cryptoassets directly and don't need to exchange into fiat. We are early in this development, money as we know it is changing.
Re: Tether price manipulation
#404Earlier quoted context omitted.
If there is a USD to USDT match, where are the audits?
Is that relevant? I'm not arguing against the claims that tether is shady, I'm only arguing against the outrageous claims that you can't convert USDT back to USD that some tether opponents claim.
Well ofcause you can. A pyramid scheme keeps paying out profits to the chumps right up to the point when it doesn't.
The argument here isn't that Tether has no cash on hand, it's that if enough people pull out, they hit the the bottom of the non 1:1 reserve and everyone else left holding will zero out. If you have 1 kg of gold and start selling papers giving people claim to that 1kg of gold, nothing will prevent you from seeling 1000 claims, making it seem like you're holding a ton of gold for people when looking at the market cap, but if 2 people come and ask you for their 1kg of gold and you don't have enough of the cash you got seeling claims on hand and an oppotunity to buy gold quickly, then from one day to the next 999 claims are worthless.
This is of cause not a big risk in the industry normally because markets are regulated and those who hold gold or other assets backing claims go through audits.
Naturally Tether can't go through an honest audit because even though they might be holding enough cash to cover a decent amount of the market, it would expose them for lying over time, which would still hurt their business tremendously.
Re: Tether price manipulation
#405Earlier quoted context omitted.
The hurdle for bitcoin is finding a way for people to turn it into a currency they can use. This is where you end up with a centralized exchange layer built on top of it. I can make a $12,000,000 transaction for $.35 but if I actually want to get the money, I have to pay 2.5% to a legit exchange or take my chances on some janky ass exchange. Why not just transfer the money via ACH and pay the small fee and save mysel…
You can start by asking people to take bitcoin for various transactions. For example, my friends and I all use it settle debts between each other.
The barriers to entry, usage, and understanding are just too high for average Joe. That and how the value of their money fluctuates compared to fiat makes it more difficult to use as a daily currency.
Also, when things go wrong there's nobody to turn to in most cases.
Re: Tether price manipulation
#406Earlier quoted context omitted.
I mostly agree with your skepticism on USDT driving BTC price, but I disagree with this: > There is, however, a good proof that they do: Tether has held the 1:1 beg pretty well recently. All this proves is that they have something in reserve, not that it is 1:1 backed. Most modern banking operates on a fractional reserve system, but when I take cash out of my bank account I get a cash dollar 1:1 with what they debit…
That's good for 97% of the time, but not for the 3% where prices either crashes or goes way-up (volatility blackswan). These stressful situations tests the 1:1 peg. (which is why I mentioned the $4000 price crash). They probably have 1. good reserves ratios and 2. very liquid assets as reserve.
Lets pretend Tether has no backing what so ever. They could still defend the peg 1:1 completely. How? Well if someone wants to sell a bunch of tether, they simply print even more tether, use that to buy crypto on exchanges, and sell that crypto to anyone willing to buy it that generates dollars to pay of the person selling their tether. But that also leves them with the tether that was sold back to dollars, which they can then buy more crypto with an either just hold or also sell to generate dollars. The visuals of this from an outside ends up looking effectively like there was just ton more new money coming into the system when in fact the exchanges and new money took a hit, and the money printing people just raised their perceived holding without backing. That is to say, that in this case the event of someone wanting out looks like the market is rising. You can keep this going as long as your un-backed coin can be exchanged for other liquid crypto.
As long as they have a blindly trusted money money printing machine, they can use it to defend the illusion that it's printing real money. This is thes standard playbook for a pyramid scheme. You use new money to keep the illusion of a big holding and you can keep that going as long as the illusion holds.
Re: Tether price manipulation
#407Earlier quoted context omitted.
Yes - none of this proves that Tether has any reserves. It just proves that someone else believes they do...which we already know.
This is moving the goalposts. I don't think anyone thinks tether has full reserves. They literally admitted that they don't[1]. However your original claim of "you can't redeem USDT" is misleading at best. [1] wikipedia: "On 30 April 2019 Tether Limited's lawyer claimed that each tether was backed by only $0.74 in cash and cash equivalents"
I feel like most people think of what you're referring to as trading Tether, and "redeeming USDT" as actually exchanging the USDT for the fiat that is supposedly backing it.
Everybody realizes that for the individual turning tether into fiat both of these amount to the same thing, but they are not the same thing for the system as a whole at all. Ultimately the only way that tether as a company can maintain the peg is by buying their own token with the reserve funds if market won't (there are obviously different mechanisms they could use to do this, either via the exchanges or with the seller directly trading with them). If they don't have access to enough reserve funds then the peg will eventually fail.
Re: Tether price manipulation
#408When the Bitfinex’d posts came out in 2017, I found them fairly convincing. It seems likely there is something not quite right at Bitfinex and Tether. But I have yet to see any evidence that the scale of “not right” is so large as is frequently claimed. These critiques never seem to address the most parsimonious explanation for periods of increased Tether issuance, which is that they are driven by genuine demand for…
> These critiques never seem to address the most parsimonious explanation for periods of increased Tether issuance, which is that they are driven by genuine demand for bitcoin, and much of that demand is routed via Tether The bigger question is: Why are so many institutions using Tether to purchase 7-8 figures of bitcoin at a time instead of simply engaging with any of the well-known institutions who will facilitate…
> The only explanation I can come up with is that Tether is being used to skirt financial regulations or launder money, which doesn't bode well for Tether either.
Could it not be possible that cryptocoins has become a massive world wide gambling area? People betting on the prices going up or down, moving their assets between floating cryptos and Tether.
Re: Tether price manipulation
#409Earlier quoted context omitted.
> A replacement for gold is one. Gold is relatively stable and has physical backing. BTC does not.
Gold is relatively stable and has physical backing. Up to 4% of China's gold reserves could be fake. Gold fraud article: https://economictimes.indiatimes.com/news/international/worl... Bitcoin is open source and completely auditable in an instant. As the price of gold goes up, the quantity supplied goes up. Bitcoin's issuance protocol is fixed and unchangeable unless the network agrees. The cost of securing or transp…
Securing $1 billion of bitcoin? Who needs to secure $827 million of Bitcoin? Securing $937 million of Bitcoin is not a killer app.
In all seriousness, securing the value of Bitcoin is the problem that is not easily solved.
Re: Tether price manipulation
#410This narrative has been dead for years.