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

#251

Post by nradov » Mon, Dec 06, 2021, 2:00 PM UTC

thaumasiotes wrote: post #241

nradov wrote: post #234

Earlier quoted context omitted.

There are generally no laws in the USA against creating and using alternative currencies. I can buy and sell using Euros or Monopoly money or whatever if I can find a willing counterparty. However, if those transactions are taxable then I have to report them at the US Dollar fair market value equivalent and pay any taxes due in US Dollars. And if someone owes me a debt I am required to accept US Dollars for settlemen…

> There are generally no laws in the USA against creating and using alternative currencies. This is not correct. If you try minting coins, you can be shut down. You can buy and sell using whatever you want, yes. There aren't laws against using alternative currencies. But there very much are laws against creating them.

No one uses coins for anything important. There are no laws against creating your own alternative paper or electronic currencies.

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

#252

Post by rchaud » Mon, Dec 06, 2021, 3:07 PM UTC

gruez wrote: post #189

rchaud wrote: post #179

Earlier quoted context omitted.

They might not be a monolith, but I've yet to see participants advocating for Tether to show audited financials like anybody else in their position would be obliged to. They appear to all be playing by the rules Tether is setting.

>but I've yet to see participants advocating for Tether to show audited financials like anybody else in their position would be obliged to. What makes you sure that at least some of the "tether is a scam (or is at least shady)" people aren't also crypto "participants"? >They appear to all be playing by the rules Tether is setting. Or maybe they're voting with their feet and moving to an exchange that doesn't deal in…

> What makes you sure that at least some of the "tether is a scam (or is at least shady)" people aren't also crypto "participants"?

I imagine there are many people that believe in crypto and participate in the markets, but dislike that Tether is behaving like the fiat central bankers they abhor so much.

> Or maybe they're voting with their feet and moving to an exchange that doesn't deal in USDT, and so won't be subject to tether's rules?

Unbacked Tether inflates the price of any coin that it's used to purchase, so what you're describing would have no effect. When Tether's $1bn pump pushes up BTC's price from it's 20% overnight decline, are the theoretical USDT-free exchanges going to reflect bid/ask prices as they were pre-pump? Of course not.

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

#253

Post by danielvf » Mon, Dec 06, 2021, 4:27 PM UTC

earnesti wrote: post #250

danielvf wrote: post #220

Earlier quoted context omitted.

I work with a blockchain project that lends a lot of USDT, USDC, and DAI. The cost at this moment to borrow USDT on the blockchain is 4%-5% for any amount, or 3.75% in bulk while playing defi games. The two biggest to lend it are Compound [0] and AAVE[1]. [0] https://compound.finance/markets/USDT [1] https://app.aave.com/#/reserve-overview/0xdac17f958d2ee523a2...

Where can you borrow tethers bulk?

The two places I just listed will happily let you borrow at least a hundred million USDT.

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

#254

Post by beaconstudios » Mon, Dec 06, 2021, 4:54 PM UTC

javert wrote: post #229

beaconstudios wrote: post #133

Earlier quoted context omitted.

Technologies don't have principles, people who use them have principles; the people who buy and sell bitcoin are mostly the same as the other cryptocoins. Satoshi intended certain principles with the creation of bitcoin, but these are not the predominant driver of its use in actuality.

Bitcoin really is defined by its principles. A fork that violates its principles (say, changing the 21M cap or violating the transaction history which hashes back to the genesis block) wouldn't be bitcoin, just like no amount of people believing the earth is flat would make it flat.

so by "principled" you just mean "has algorithmic constraints?"

that's not what most people mean by principled. Also, in that sense, crypto also has principles in that most altcoins are built on ethereum, which also has algorithmic constraints.

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

#255

Post by kangnkodos » Mon, Dec 06, 2021, 6:31 PM UTC

Who ends up holding all the $USDT?

Who are currently the biggest holders? Lots of different random individuals? All the people who have deposited cash into an exchange but haven't bought bitcoin yet/people who have sold bitcoin on an exchange, and haven't cashed out for USD yet? Institutions, if so which ones?

Where does it tend to pool up?

Are there any studies of where most of it sits?

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

#256

Post by amazd » Mon, Dec 06, 2021, 7:15 PM UTC

mangoman wrote: post #143

Some of these transactions on whale alert are extremely interesting - https://whale-alert.io/transaction/bitcoin/be11f0e7c040a3f5c... https://whale-alert.io/transaction/bitcoin/28bfa6497df054f42... someone has been moving the same number of bitcoin between wallets like hot potato between wallets, about $730 million dollars. Why?

they are still going right now: https://www.blockchain.com/btc/address/3CpcVodog9VKvWCXZhrJP...

this is after about transfer of various wallets... lets see if it keeps going. Seems like someone is trying to tumble their $740 million btc...

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

#257

Post by bb88 » Mon, Dec 06, 2021, 8:20 PM 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.

I did some research on this.

Tether has been manipulating the market since 2018 through using wash sales to prop up the price through apparent demand.

Tether has most of its liabilities backed with unsecured commercial paper from China.

China has had issues with their real estate companies being in too much debt and offering too much commercial paper to keep them running day to day.

China also has moved against crypto currencies recently, and regulating the real estate companies to move forward to pay back their debt.

So this strikes me as systemic risk. If USDT goes, so does the Chinese Commercial Paper Market, and vice versa. Who knows what gets taken out at that point. Tesla? Coinbase? Nvidia and AMD for losing sales to mining rigs? I don't know.

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

#258

Post by SantalBlush » Mon, Dec 06, 2021, 9:26 PM UTC

rout39574 wrote: post #195

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.

If you don't intend to be hyperinflationary, the printing of money has to be associated with the acquisition of value or the assumption of debt. The debt is repaid through taxation. Grandparent comment is referring to the position that taxes are extracted via threat of force. This is an extremely emotionally fraught position, and it's difficult to discuss rationally. So, the reasoning goes, if you have to tax to prin…

So to paraphrase, "Printing money is inflationary, which I believe is bad, and I believe the only way to rectify that is through taxation (violence)." That means you are the one who is proposing violence, not the commenter suggesting that we print money. They never said anything about taxation.

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

#259

Post by post_from_work » Tue, Dec 07, 2021, 12:26 AM UTC

natch wrote: post #243

post_from_work wrote: post #217

Earlier quoted context omitted.

The toilet paper is backed by nuclear weapons and the world's most offensively-capable Navy and Air Force (arguably no longer the world's largest Navy so I clarified the metrics).

Can’t put my finger on why that backing seems dubious. Didn’t I read about a smackdown somewhere recently done by some ragtag dudes with Kalashnikovs? Talibsomething.

You mean the country where half the population might starve this winter because the only money they have is frozen in our banks?

https://acaa.org.uk/blog/frozen-assets-and-freezing-temperat...

The threat of devastation works better on countries that aren't already completely devastated by decades of internecine conflict anyway. It also works better against the non-theocratic adversaries that are legitimately concerned for their own corporeal wellbeing (Qaddafi, Saddam, KJU, Assad).

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

#260

Post by javert » Tue, Dec 07, 2021, 12:26 AM UTC

beaconstudios wrote: post #254

javert wrote: post #229

Earlier quoted context omitted.

Bitcoin really is defined by its principles. A fork that violates its principles (say, changing the 21M cap or violating the transaction history which hashes back to the genesis block) wouldn't be bitcoin, just like no amount of people believing the earth is flat would make it flat.

so by "principled" you just mean "has algorithmic constraints?" that's not what most people mean by principled. Also, in that sense, crypto also has principles in that most altcoins are built on ethereum, which also has algorithmic constraints.

Bitcoin has principles the way most people mean the term. Ethereum does not. I've already given examples that make it clear.

Ethereum's algorithmic constraints are merely algorithmic constraints that can be changed easily, whereas bitcoin's key algorithmic constraints also are actually principles; changing them results in a non-bitcoin fork.