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Report on Stablecoins [pdf]

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Re: Report on Stablecoins [pdf]

#541

Post by arcticbull »

paulgb wrote: post #527
arcticbull wrote: post #518

Earlier quoted context omitted.

There’s nobody to trade $70B USDT with except Tether Inc and they’re not paying out haha. Those folks are trapped.

If you could borrow enough USDT though, you could still break the peg without transacting with Tether directly: - borrow a ton of USDT - trade it for USD on exchanges, eating away at organic demand as well as the reserves used to keep the peg - eventually (presumably) the peg will break and the price will collapse, and you can buy back the USDT for cheap to repay the loan The trouble is getting that USDT-denominated…

Agreed, the difficult part is getting a USDT-denominated loan without crypto collateral and counter-party risk.

Re: Report on Stablecoins [pdf]

#542

Post by swader999 »

arcticbull wrote: post #223
swader999 wrote: post #204

Earlier quoted context omitted.

There is value in having a monetary system though. And if BTC is a better system and more people find it's utility for barter or wealth preservation better it might appreciate more in relation to something like the USD which has many different characteristics.

It's a strictly worse monetary system by any measure. It's massively more expensive to transact, it's unbelievably inefficient - requiring as much power as Thailand and generating as much e-waste as the Netherlands to scribble 2-3 tx/sec into a ledger. That's 60 days of power for the average US household and 1 iPad of e-waste per transaction . [1] [edit](97% of all mining hardware will be thrown away without ever win…

Visa or PayPal are quite expensive to transact. It ranges from one to three percent overhead on every purchase you make. I don't think btc is that high is it?

Re: Report on Stablecoins [pdf]

#543

Post by mattnewton »

wpietri wrote: post #422
arcticbull wrote: post #264

Earlier quoted context omitted.

> Bitcoin isn't figuratively a store of value, it actually is. It's a speculative, negative-sum MLM token. I suggest reading up on what a store of value is. [1] I'm not saying there aren't ways of monetizing it within the network - which may indeed create value, but intrinsically, it is a negative-sum asset, a mechanism of redistributing real cold hard dollars from new participants to old entrants and miners. It crea…

Exactly. Nobody before 2009 would have described a highly volatile unbacked synthetic commodity as a "store of value". That's just what Bitcoin partisans shifted to when they realized it was unworkable for its stated purpose as a payment system. E.g.: https://avc.com/2017/08/store-of-value-vs-payment-system/

Why not? There have been much stranger stores of value in the past https://en.m.wikipedia.org/wiki/Rai_stones

Re: Report on Stablecoins [pdf]

#544

Post by swader999 »

arcticbull wrote: post #535
swader999 wrote: post #513

Earlier quoted context omitted.

It's true for any endeavor that falls on the bell curve that only has one winner. And this analogy ignores the fact that mining rigs win every day just by pooling their efforts

I'm not sure that has any bearing on my comment though.

Yeah I should have replied to the parent above. I would have loved to use horsecoin to purchase human ivermectin from India last night.

All the feed stores in my area have locked up the paste and I have only the toxic to ingest orally pour on cattle versions readily attainable.

You can get by with rubbing it on the fatty areas of your body but dosing it is hit and miss.

Anyhow back to the guys in India, they would only take pay pal and the demand was so high, I had to pay an extra thirty five dollars just for pay pal processing. Crazy times...

Anyhow, I hope the mods don't burn this post. What if ivm is the real deal and I need it to save my life because my country with free health care can't fund any other kind of useful early treatment? It costs about two thousand from what I've read and there's no way they can print more money to cover this for the masses.

I'm not trying to get around vaccines even though the first one I took clotted on me and almost killed me. You should see my face right now, there's a huge scar on my forehead where my plastic surgeon ripped out a hardened clot from a vein in there last week. I'm just looking for early treatments for all of the people's no matter the vax status.

Pay pal will almost certainly shut this company off in India when they find out what he's doing. Horse coin will be the only way after that.

Re: Report on Stablecoins [pdf]

#545

Post by panarky »

pcwalton wrote: post #538
panarky wrote: post #479

Earlier quoted context omitted.

Either markets work or they don't. Sure, in the short term, unregulated markets can be manipulated. But Tether's been around more than seven years, more than enough time for the "smart money" to profit by obliterating them. You can sell Tether on Coinbase for U.S. Dollar deposits to your bank account. The fact that Tether maintains its 1:1 peg to the dollar is a signal that maybe all the smart guys who have been conf…

> But Tether's been around more than seven years, more than enough time for the "smart money" to profit by obliterating them. > The fact that Tether maintains its 1:1 peg to the dollar is a signal that maybe all the smart guys who have been confidently predicting its imminent and inevitable failure for the last seven years might be missing something. Bernie Madoff claimed that his scam started in 1991, though in real…

There wasn't this loud of a chorus continuously yelling that Madoff and Gox were scams, in every possible media outlet from blogs to Bloomberg, for seven years.

There wasn't a well publicized US federal indictment and investigation of Madoff and Gox, settled with a fine and no injunction.

I'm not saying Tether is clean or 100% funded, I don't know. But unlike Madoff and Gox, accusations have been very loud and very public for a very long time, and the market still accepts USDT at parity with USD.

If Tether's treasury is empty, and if people can freely trade USDT for USD, it wouldn't hold 1:1.

Re: Report on Stablecoins [pdf]

#546

Post by panarky »

seanhunter wrote: post #506
panarky wrote: post #496

Earlier quoted context omitted.

Somebody holds large chunks of the $70.5 billion in USDT. Presumably, people who hold hundreds of millions of the stuff are well aware of every accusation made against Tether. If they wanted to, they could trade their USDT for actual US fiat on a 1:1 basis if they thought USD was worth more than USDT. The really smart money with large crypto stashes could borrow USDT with crypto as collateral, and trade the USDT for…

> The really smart money with large crypto stashes could borrow USDT with crypto as collateral, and trade the USDT for greenbacks. Have you looked into the mechanics of this trade? The crypto loans I'm aware of are all significantly overcollateralized. You would have to pledge say 1m BTC to get 0.8m BTC worth of USDT which you could then sell for dollars. If you succeeded USDT tanks, everyone who holds USDT would be…

> So you succeed in losing 20% of your money on the initial USDT trade

Presumably the value of Tether would drop much farther than the value of other crypto.

If USDT drops 90% and BTC drops 50% in USD terms, the BTC would gain value in USDT terms and your loan would be even more overcollateralized.

Then you could pay back your loan with USDT at ten cents on the dollar and make an absolute killing.

Re: Report on Stablecoins [pdf]

#547

Post by swader999 »

wpietri wrote: post #451
swader999 wrote: post #196

Earlier quoted context omitted.

You could make the same claim about any kind of money though. Whose to say the USD or GOLD or CAD or tree bark is real money? A productive asset is an entirely different thing. It's not easy to convert an asset for instance or walk across a border with it. People make the fundamental mistake thinking these things are investments, they aren't, it's just currency or forex speculation that we are doing here.

> You could make the same claim about any kind of money though. This is one of the things I find hilarious about cryptocurrency discussions. When I point out it isn't a good asset, people argue it's really a currency. When I point out it's a bad currency, people argue it's an asset. I'd love it if you all could get together and agree on what it's supposed to be good for and just leave the rest of us out of it. But ad…

All reasonable criticisms. But it is very early still and you won't see many transactions for exchange of goods this early in its adoption. That's not to say that BTC will eventually take over, it's just to say that the kinds of uses you see this early aren't predictive of its future.

Re: Report on Stablecoins [pdf]

#548

Post by swader999 »

arcticbull wrote: post #534
swader999 wrote: post #515

Earlier quoted context omitted.

Maybe you are stuck on the track that there has to be a winner. There doesn't have to be a single monetary system. There can be several. And bitcoin has real utility in a lot of valid scenarios. Not having a central authority is interesting and appealing to many. Deflationary by nature makes it an excellent store of value.

> And bitcoin has real utility in a lot of valid scenarios. Let's just wait I'm sure OP will deliver even a single one that isn't crime, regulatory capture or gambling. > Not having a central authority is interesting and appealing to many. Lots of counterproductive things are appealing to lots of people. Rolling coal is appealing to lots of people. Not getting vaccines is appealing to lots of people. That doesn't mea…

Well it just depends how much you trust the entity in control of the money and whether they will allow it for things you want. Will they let you buy a plane ride if it's your tenth trip already this year to see your sick mom in Hawaii? Maybe not, too much carbon. Control of money is control of society, even the individual if you apply a little tech to the mechanics. Trump and Hitler were both elected democratically, are you okay with either of them pulling the strings on the only thing you can exchange for your labour?

What about Xi in China with their real life social credit system built by exactly who? Should that regime be trusted with that much control over that much humanity?

Re: Report on Stablecoins [pdf]

#549

Post by Semaphor »

arcticbull wrote: post #534
swader999 wrote: post #515

Earlier quoted context omitted.

Maybe you are stuck on the track that there has to be a winner. There doesn't have to be a single monetary system. There can be several. And bitcoin has real utility in a lot of valid scenarios. Not having a central authority is interesting and appealing to many. Deflationary by nature makes it an excellent store of value.

> And bitcoin has real utility in a lot of valid scenarios. Let's just wait I'm sure OP will deliver even a single one that isn't crime, regulatory capture or gambling. > Not having a central authority is interesting and appealing to many. Lots of counterproductive things are appealing to lots of people. Rolling coal is appealing to lots of people. Not getting vaccines is appealing to lots of people. That doesn't mea…

> Let's just wait I'm sure OP will deliver even a single one that isn't crime, regulatory capture or gambling.

I’ll bite. Donating to a Ukrainian twitch streamer. PayPal doesn’t allow it, every other option requires entering your credit card details on potentially shady sites.

Caveats: This was a few years ago, not sure what the situation is now; Current BTC tx fees make that rather expensive (which may or may not be alleviated by lightning or a cheaper to send crypto).

Re: Report on Stablecoins [pdf]

#550

Post by dmichulke »

paulgb wrote: post #420
kirse wrote: post #357

Earlier quoted context omitted.

After that hedge fund issued a $1M reward on Tether backing I did some more investigation and the thing I realized is that 1) Tether is inherently backed by BS and 2) crafting any sort of Tether short is near impossible because everyone in the game - Tether, the exchanges, etc. - will all be against you if you're winning in the short. There's that scene in "The Big Short" where Mark Baum and crew know the subprime bo…

I’ve been shorting a few bitcoin-related public companies on the theory that in a run on Tether they will have to liquidate large bitcoin holdings and bring down the rest of the market. It’s not as direct, but I’m less worried about counterparty risk. I wrote up my thesis here: https://paulbutler.org/2021/betting-against-bitcoin/

Have you considered longing a BTCUSDT perpetual and shorting an equivalent BTCUSDC contract or e.g. borrow and sell BTC if you dislike the other stablecoins?

The big risk in your play is that the crowd in a panic will select another stable coin for going on the sideline IF AND ONLY IF such a coin is available. If not they will buy the most stable non-stablecoin which is ... drumroll ... bitcoin.

Of course, long-term effects might be different.

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