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Tether starting to lose its peg too, after Terra did

community.intercoin.org

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Re: Tether starting to lose its peg too, after Terra did

#491
post #386

The entire concept of a "stablecoin" reminds me a lot of something from SIGBOVIK 2014. Keep in mind, this was written in 2014, before any stablecoins actually existed, and that SIGBOVIK is supposed to be a joke conference where people present extremely silly ideas as if they were real breakthroughs. > DollarCoin: We propose skipping the middleman and providing direct proof-of-dollar with a blockchain that consists of…

I feel that the joke may be about the implementation, maybe not the whole concept.

Re: Tether starting to lose its peg too, after Terra did

#492
post #445
post #344

Earlier quoted context omitted.

If you live in a country with an unstable currency but without strong capital controls, the upside can be had by holding dollars . And that comes without the risk that your known-to-be-a-bit-dodgy nearly-dollar collapses.

> the upside can be had by holding dollars Unless your bank kicks you out by some reason (incompetent compliance). Unless foreign bank refuses your transaction because the bank doesn’t like the color of your passport. Unless somehow banking system wants to cut extra from your transaction (2.5-4% for transaction) because of double currency conversion you didn’t ask for, because you didn’t specify correct correspondent…

> Unless your bank kicks you out by some reason (incompetent compliance). Unless foreign bank refuses your transaction because the bank doesn’t like the color of your passport. Unless somehow banking system wants to cut extra from your transaction (2.5-4% for transaction) because of double currency conversion you didn’t ask for, because you didn’t specify correct correspondent bank and your bank didn’t tell you about that.

These are all problems invented by Crypto bulls to build a narrative for why Crypto is widely useful.

There are a handful of small, very poor countries where Crypto might have been better than holding local currency. But you also had to be poor in those poor countries for it to make sense for you to buy Crypto instead of hard assets like land or housing - if you were merely interested in bypassing monetary devaluation - and not interested in EXTEMELY risky speculation to get absurd returns.

The total money for people this might even have made a little bit of sense for is maybe $1Bn. Considering Crypto had close to a $3T market cap at some point - this is not a talking point. It's noise.

The real story - and the only story - is that Crypto is and always has been speculation.

Re: Tether starting to lose its peg too, after Terra did

#493
post #450

Earlier quoted context omitted.

risk exposure to that not being honored and tether crashing.

Is there evidence that it's currently not being honored?

There no evidence that it is being honoured.

If you can find any people who have been through the process and come out with cash dollars I’d be interested to see it.

Re: Tether starting to lose its peg too, after Terra did

#495

Earlier quoted context omitted.

One thing I don’t understand here: where does the smart contract get the information of the current luna/usd exchange rate? It can’t be an api call surely, it must be on-chain somehow.

Things like this rely on off-chain "oracles"

I know the thing is crashing and burning as we speak, but that seems like a crazy single point of failure for something claiming to be decentralized...

What if the oracle has downtime?

Re: Tether starting to lose its peg too, after Terra did

#496

Earlier quoted context omitted.

Matt Levine did a great write up of algorithmic stablecoins here: https://www.bloomberg.com/opinion/articles/2022-05-11/terra-... "1. You wake up one morning and invent two crypto tokens. 2. One of them is the stablecoin, which I will call “Terra,” for reasons that will become apparent. 3. The other one is not the stablecoin. I will call it “Luna.” 4. To be clear, they are both just things you made up, just numbers o…

One thing I don’t understand here: where does the smart contract get the information of the current luna/usd exchange rate? It can’t be an api call surely, it must be on-chain somehow.

Validators vote on the current exchange rate.

https://docs.terra.money/docs/develop/module-specifications/...

Re: Tether starting to lose its peg too, after Terra did

#497
post #470
post #386

The entire concept of a "stablecoin" reminds me a lot of something from SIGBOVIK 2014. Keep in mind, this was written in 2014, before any stablecoins actually existed, and that SIGBOVIK is supposed to be a joke conference where people present extremely silly ideas as if they were real breakthroughs. > DollarCoin: We propose skipping the middleman and providing direct proof-of-dollar with a blockchain that consists of…

Here's a question for tether "investors": why are you investing in something whose stated goal is to maintain a peg to the USD instead of, you know, just holding money in US dollars? You're adding a bunch of risk for literally no upside. The only thing you gain is to to trade that on the blockchain, which is really a response to the oracle problem. So you've greatly increased your risk with no upside to slightly incr…

> You're adding a bunch of risk for literally no upside.

You mine a Bitcoin that 'should' be worth 5k USD, but is instead selling 60k USDT. So instead of selling that Bitcoin for 5k, you instead sell ~8% of your Bitcoin for 5k USDT, pay your expenses, and keep the other 92% of the Bitcoin you mined.

Re: Tether starting to lose its peg too, after Terra did

#498
post #470
post #386

The entire concept of a "stablecoin" reminds me a lot of something from SIGBOVIK 2014. Keep in mind, this was written in 2014, before any stablecoins actually existed, and that SIGBOVIK is supposed to be a joke conference where people present extremely silly ideas as if they were real breakthroughs. > DollarCoin: We propose skipping the middleman and providing direct proof-of-dollar with a blockchain that consists of…

Here's a question for tether "investors": why are you investing in something whose stated goal is to maintain a peg to the USD instead of, you know, just holding money in US dollars? You're adding a bunch of risk for literally no upside. The only thing you gain is to to trade that on the blockchain, which is really a response to the oracle problem. So you've greatly increased your risk with no upside to slightly incr…

There aren't Tether investors, it's just used in exchanges. It wouldn't make much sense to "invest" in an asset which has the primary goal of never changing price.

Re: Tether starting to lose its peg too, after Terra did

#499
post #468
post #455

Earlier quoted context omitted.

I actually hate people disavowing themselves of responsibility here. While there is definitely some shady stuff in Crypto (particularly NFTs, which seem to be 99% scams), there's a certain level of personal responsibility required here. People saw the meteoric rise of Bitcoin and got a serious case of FOMO. Everyone wanted to be on the next Bitcoin. This, ultimately, is the American Dream: to get rich by doing nothin…

The American dream is to make it through hard work, what you are referring to is simple greed and laziness and it’s been around since humanity attained consciousness.

> The American dream is to make it through hard work

Now that's the actual con, or at least a pipe dream. Hard work is never enough.

Luck plays a huge factor but few who get lucky, and then rich, will ever admit to that part.

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