Approx. 24 hours ago, Tether printed 1B $USDT out of thin air • Hacker News Board

Re: Approx. 24 hours ago, Tether printed 1B $USDT out of thin air

#71

Post by gadnuk » Sun, Dec 05, 2021, 9:37 PM UTC

spookthesunset wrote: post #39

poetically wrote: post #16

Earlier quoted context omitted.

No one has seen any of their collateral or knows how much of it they actually have. I believe the finance people call this being over-leveraged but I'm not an expert. Seems kinda weird that the SEC hasn't looked into it.

I mean to be fair, they did have an auditor back in 2018. But the auditor quit before completing their investigation. Auditors quitting is never a good sign. https://www.coindesk.com/markets/2018/01/27/tether-confirms-...

It's even worse than that. Tether fired that auditor (Friedman LLC) because they were looking into it in a bit more detail.

From the very same article: "Given the excruciatingly detailed procedures Friedman was undertaking for the relatively simple balance sheet of Tether, it became clear that an audit would be unattainable in a reasonable time frame."

Even Friedman LLP says in the internal memo “Do not rely on this report”.

It's been almost 4 years since that and no independent firm has ever audited Tether.

Re: Approx. 24 hours ago, Tether printed 1B $USDT out of thin air

#72

Post by rglullis » Sun, Dec 05, 2021, 9:38 PM UTC

aaronax wrote: post #52

josefrichter wrote: post #37

I wonder what would happen if this proved to be scam. Would that kill the whole crypto market?

Anyone holding Tether will be stuck selling it for the equivalent of $0.05 or whatever. This alone would have no effect on crypto prices. However, it will become harder to get various government-type currencies in to exchanges so presumably purchasing demand will fall, which seems like it would make crypto prices fall too.

Don't forget the amount of exchanges that can not trade USD so they rely on USDT to deal with BTC. Tether crashing is going to destroy the value of BTC and it will take all of the alts with it. It will make Mt Gox look like a hiccup.

Still, it needs to happen. Keeping Tether alive is the worst thing that can happen to crypto.

Re: Approx. 24 hours ago, Tether printed 1B $USDT out of thin air

#73

Post by SantalBlush » Sun, Dec 05, 2021, 9:40 PM UTC

thaumasiotes wrote: post #66

SantalBlush wrote: post #60

Earlier quoted context omitted.

Not agreeing with the parent comment, but I fail to see how printing money and distributing it involves violence.

The USA actually does have laws against creating anything that might be interpreted as competing with the official currency. This is the most likely avenue for violence to come in, as people try to resist devalued money by using substitutes.

Holding crypto is legal in the US, so again, I fail to see how this involves violence.

Re: Approx. 24 hours ago, Tether printed 1B $USDT out of thin air

#74

Post by est31 » Sun, Dec 05, 2021, 9:41 PM UTC

peakaboo wrote: post #23

rp1 wrote: post #19

Earlier quoted context omitted.

Relative scarcity is a necessity for any currency.

Of course but you could give people some free money nevertheless and it would make the world a better place. What do you think would happen if you gave 1000 dollars to each person in America every month? I think a lot of good would come from that and not much bad.

I'm in favour of UBI, but note that it'd require extremely strict immigration policy as well as good enforcement of it, which is generally something the left very much dislikes.

As already seen with covid aid, people wouldn't work in low wage jobs any more. This would lead to inflation or disappearance of some amenities. E.g. you might have to put your groceries into your bag yourself, or might have to pay a dollar extra for that service. This isn't something negative though, just a neutral change I guess.

It would help a lot of poor and suffering people, but note that even in countries with good unemployment benefits, homeless people still exist.

Re: Approx. 24 hours ago, Tether printed 1B $USDT out of thin air

#75

Post by rsp1984 » Sun, Dec 05, 2021, 9:42 PM UTC

Can anybody with an understanding of the matter ELI5 to me how it can be that, given all the uncertainty, 1 Tether is still trading for ~1 USD on the major exchanges? That price seems to be determined by the open market. There are competing stablecoins. Is everybody just so confident that Tether is the real deal?

Re: Approx. 24 hours ago, Tether printed 1B $USDT out of thin air

#76

Post by rzz3 » Sun, Dec 05, 2021, 9:42 PM UTC

atdrummond wrote: post #46

secondcoming wrote: post #28

Earlier quoted context omitted.

A loaf of bread would cost $100

A UBI doesn’t necessarily result in inflation. The later is a combination of monetary policy and expectations. UBIs can be paid by means other than printing money.

Yes, providing money without any attached good or service or unit of value definitely won’t cause inflation/s WHAT?

Re: Approx. 24 hours ago, Tether printed 1B $USDT out of thin air

#77

Post by zatertip » Sun, Dec 05, 2021, 9:43 PM UTC

rsp1984 wrote: post #75

Can anybody with an understanding of the matter ELI5 to me how it can be that, given all the uncertainty, 1 Tether is still trading for ~1 USD on the major exchanges? That price seems to be determined by the open market. There are competing stablecoins. Is everybody just so confident that Tether is the real deal?

No short of sufficient size yet

Re: Approx. 24 hours ago, Tether printed 1B $USDT out of thin air

#78

Post by teh_infallible » Sun, Dec 05, 2021, 9:44 PM UTC

rsp1984 wrote: post #75

Can anybody with an understanding of the matter ELI5 to me how it can be that, given all the uncertainty, 1 Tether is still trading for ~1 USD on the major exchanges? That price seems to be determined by the open market. There are competing stablecoins. Is everybody just so confident that Tether is the real deal?

It certainly is strange that Tether hasn’t been shut down for counterfeiting, which is essentially what they are doing.

I assume people in the banking industry allow them to operate as a way to hold leverage over the crypto markets and absorb capital that would otherwise flow to altcoins.

Re: Approx. 24 hours ago, Tether printed 1B $USDT out of thin air

#79

Post by gruez » Sun, Dec 05, 2021, 9:44 PM UTC

zatertip wrote: post #77

rsp1984 wrote: post #75

Can anybody with an understanding of the matter ELI5 to me how it can be that, given all the uncertainty, 1 Tether is still trading for ~1 USD on the major exchanges? That price seems to be determined by the open market. There are competing stablecoins. Is everybody just so confident that Tether is the real deal?

No short of sufficient size yet

How would a short change things? If it did push down the price, all that would mean is that tether could rebuy them at a discount and make a profit.

Re: Approx. 24 hours ago, Tether printed 1B $USDT out of thin air

#80

Post by ant6n » Sun, Dec 05, 2021, 9:44 PM UTC

secondcoming wrote: post #28

peakaboo wrote: post #23

Earlier quoted context omitted.

Of course but you could give people some free money nevertheless and it would make the world a better place. What do you think would happen if you gave 1000 dollars to each person in America every month? I think a lot of good would come from that and not much bad.

A loaf of bread would cost $100

True. Since once there will be a UBI, the demand of bread will go waaaay up. People will eat 100,000 calories a day.