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

#201

Post by drexlspivey » Mon, Dec 06, 2021, 1:48 AM 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?

The price is not being determined on the open market, Tether's whole job is to maintain the peg at 1-to-1. Contrary to the FUD that is being recycled in here on all Tether topics, Tether doesn't print new money just because they feel like it, they do it in response to the demand for USDT in order to maintain the price at $1.

Yesterday cryptos crashed hard, people started moving out of their crypto positions and into stablecoins. Demand for stablecoins increased bringing their price > $1. Tether printed USDT and exchanged them for USD (and put the USD into their reserves) in order to bring the price down and maintain the peg. When the opposite happens they will sell some of their USD reserves for USDT.

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

#202

Post by burntbridge » Mon, Dec 06, 2021, 1:57 AM UTC

opinion-is-bad wrote: post #50

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.

That’s not free money; it’s money taken from people under threat of violence.

I would argue it is taken from people (yes with violence if needed) in exchange for goods and services provided, part of an implicit contract you are forced to make when you are a citizen.

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

#203

Post by lamontcg » Mon, Dec 06, 2021, 1:58 AM UTC

notjesse wrote: post #155

bb88 wrote: post #127

Earlier quoted context omitted.

Right now I think a good analogy is it's like musical chairs. The game is fine as long as the music is playing. When the music stops, someone's gonna lose big. The problem is when the music stops and there's a run on crypto. People are trying to get out of $USDT and convert it into cash. Exchanges have to have buyers of $USDT so they can exchange $USDT back into cash for anyone that wants to. But they can't just crea…

This makes me think; what if you shorted USDT? There seems to be almost no scenario where USDT becomes more valuable than the USD, and the worst case is it continues to be worth the same. But there is a fair probability it becomes worthless, meaning that you gain from it. While you need to pay premiums in the interim, for something with an indefinite timeframe, that risk seems fairly minor for the potential reward.

If USDT collapses it will take out multiple exchanges with it, and the fact that you have a winning position won't matter if the the people running the exchange it was on have entirely disappeared to sandy beaches somewhere. Counterparty risk during the systemic "banking" collapse will be very high, and completely uninsured.

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

#204

Post by qeternity » Mon, Dec 06, 2021, 2:04 AM UTC

FDSGSG wrote: post #199

qeternity wrote: post #186

Earlier quoted context omitted.

> they are yet another Liberty Reserve enabling large scale money laundering. > there would be no way for them to make government investigations go away within any reasonable timeframe. Yes, this is usually the problem with breaking the law (such as facilitating large scale money laundering). You seem to believe this is a bug, while every other citizen views this as a feature. People breaking the law cannot making in…

Sorry, I'm not interested in taking part in your weird struggle against Tether. I am obviously not defending Tether, I do not have a single good thing to say about Tether. But unlike you seem to be, I'm not emotionally invested in what happens to Tether. I was simply calling out the obvious bad faith argument presented by wmf. Even if Tether isn't violating any laws, the US government is going to go out of their way…

> Sorry, I'm not interested in taking part in your weird struggle against Tether.

Cool, let's just leave it then. I don't give two shits about Tether. In fact, I really hope it's legit. I don't want to see people get burned.

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

#205

Post by qeternity » Mon, Dec 06, 2021, 2:06 AM UTC

tzone wrote: post #175

qeternity wrote: post #150

Earlier quoted context omitted.

Absolutely not. Large Tron issuances started well before Ethereum gas fees soared. We are talking a couple of years ago. Also, market makers moving Tether around do not give two shits about $60 in gas fees or whatever. Additionally, a huge amount of Tether has gone into DeFi on Ethereum and L2s (or bridged to newer L1s, which typically don't have a Tron bridge).

https://www.theblockcrypto.com/data/decentralized-finance/st... Ethereum was dominating TRON until very recently and this does have to do with huge increases in Gas prices on Ethereum

Sure, but go back two years, Tron had 50% of the Eth issuance which is insane given that even two years ago, Eth was domination Tron in every respect.

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

#206

Post by burntbridge » Mon, Dec 06, 2021, 2:08 AM UTC

rzz3 wrote: post #76

atdrummond wrote: post #46

Earlier quoted context omitted.

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?

Prices only go up if the demand approaches or exceeds supply. If there is capacity in the system all is good, more jobs. This is how Franklin D. Roosevelt brought an end to the Great Depression (spending money I mean not UBI)

If the economy is running at capacity and you wanted a UBI taxes would have to increase to prevent inflation. This would end up being wealth redistribution.

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

#207

Post by astrange » Mon, Dec 06, 2021, 2:12 AM UTC

gruez wrote: post #144

threepio wrote: post #118

Earlier quoted context omitted.

Bitcoin: by limiting issuance to 21M we have made price manipulation of our currency impossible Tether: hold my beer

>Bitcoin: by limiting issuance to 21M we have made price manipulation of our currency impossible At what point did people claim that "price manipulation of [bitcoin]" was "impossible"? I think you're mistaking "price manipulation" with "dilution" (eg. quantitative easing or debasing).

Dilution is still possible either by forking it (and having normal non-Austrians accept the new one) or by starting lending programs (since banks create money by lending it.)

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

#208

Post by anamax » Mon, Dec 06, 2021, 2:12 AM 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.

If everyone has $1000 to spend on bread, bread seller can charge $1000 without losing sales.

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

#209

Post by astrange » Mon, Dec 06, 2021, 2:15 AM UTC

est31 wrote: post #74

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.

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 e…

COVID aid was designed to discourage (some kinds of) work because we literally didn't want people to (do that kind of) work; that being the point of closing the stores. It was more like disaster relief than anything else.

It also didn't create new money insofar as it was used to pay existing debts like rent; what it did was avoid a financial crisis.

Other kind of aid designs don't do this very much; demand is infinite and won't go away if you give people some money.

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

#210

Post by scrubs » Mon, Dec 06, 2021, 2:16 AM UTC

drexlspivey wrote: post #201

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?

The price is not being determined on the open market, Tether's whole job is to maintain the peg at 1-to-1. Contrary to the FUD that is being recycled in here on all Tether topics, Tether doesn't print new money just because they feel like it, they do it in response to the demand for USDT in order to maintain the price at $1. Yesterday cryptos crashed hard, people started moving out of their crypto positions and into…

Huh? They peg on Saturday? (OP's ref'd txn has a Sat date on it.

They wait to peg only for nice round numbers like $1B exactly? No cents? No decimal?

They don't peg end-of-day, or at market-close, month or quarter end?

Is there an official financial notification of peg events like a crypto-currency corporate event calendar? Nobody should be surprised because pegging is telescoped ahead right?

Is there an offset in another block chain showing USD movement? Surely they didn't just phone the bank (broker) and do a regular ACH transfer, right? They used non main stream tooling cause they're the cool kids?

And where's proof USD moved in offset?

C'mon ... there's nothing here to take seriously. Heck, based on this nonsense I can peg USD out of my garage with carrots. Wanna know what? Wholefoods produce then straight to the keyboard. See you guys on the flip side with CyrptoCarrots, the organic sustainable cyrpto coin.