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Tether starting to lose its peg too, after Terra did

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

#551

Post by ineedasername »

dmichulke wrote: post #488
jmyeet wrote: post #470

Earlier quoted context omitted.

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…

As a US citizen try to send dollars to a Hong Kong or Singapore registered exchange. I think the "investing" in tether is really only the best match to "Let me see, where can I park my money in the least volatile way on this crypto exchange". EDIT: Interestingly, if tether breaks, then USDC is the last man standing and will have to work hard to maintain the peg. Under such circumstances it's quite possible that BTC i…

If USDC is truly backed 100% as stated then it shouldn't be a problem. In fact it might help them gain market share if coins with less backing de-pegged. Though I guess it could also lead to a general loss of faith in stable coins and folks as a whole would shy away from them.

Either way, most stable coins are built on some form of trust, and I'm much more inclined to trust Coinbase than most others. (Disclaimer: I have no dog in this hunt, I don't own any crypto whatsoever.)

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

#552

Post by emteycz »

ptero wrote: post #547
emteycz wrote: post #478

Earlier quoted context omitted.

How is it any different from a bank? (I live in a country with well done digital currency regulation that is comparable to what banks have to do - let's not limit this to the case of Tether only).

Which country and which stablecoin do you have in mind, if I may ask; just curious. A big difference with banks is that in most countries with well regulated banking the government will step in to bail out the account holder in a registered bank if that bank goes under. While most government officials will sing and dance if a stablecoin (which complicates their monetary decisions and, if big enough, can even arbitrag…

No stable coin yet, the legislation is completely new so nobody has caught on yet - but it'd be weird if nobody did. The country is Czech Republic.

I really don't think anybody here would dance or sing. The politicians here are positive about Bitcoin, as well as the central bankers.

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

#553

Post by mrep »

micromacrofoot wrote: post #529
raiyu wrote: post #468

Earlier quoted context omitted.

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.

is that really the dream? I always thought it was just having a normal job, work 9-5 and come home to house/car/family

From wikipedia [0]: "The American Dream is a national ethos of the United States, the set of ideals (democracy, rights, liberty, opportunity and equality) in which freedom includes the opportunity for prosperity and success, as well as an upward social mobility for the family and children, achieved through hard work in a society with few barriers."

[0]: https://en.wikipedia.org/wiki/American_Dream

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

#554

Post by LegitShady »

irjustin wrote: post #287
cheeseface wrote: post #172

Earlier quoted context omitted.

The promise of a stablecoin, in this case Tether, is that you can always change 1 USDT into $1. When people buy Tether, they pay then $1 and believe the promise that they will get $1 when they want to.

Right but how... where does physical money come into play? How can I or anyone get 1 physical dollar from selling USDT? All I've ever done is exchange some coin => USDT and vice versa. So if no one is actually asking for a physical dollar, why does it need to be backed by a physical dollar?

90% of the value is allowong people to dump crypto to anltber asset that is crypto-osh but is "pegged" (the truth of which is more like a consensus of biased investors) to USD but doesnt trigger tax problems the dame way axtjally cashing out would.

the backing by a physical dollar is whats supposed to peg it to make the fiction that holding $1m in tether is equivelant to holdong $1m.

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

#555

Post by nailk »

onlyrealcuzzo wrote: post #492
nailk wrote: post #445

Earlier quoted context omitted.

> 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…

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

These problems happened to me and still happening. Swift transactions in USD from US to UAE are getting double converted (at cost of 2.5-4% of the total amount) and it’s very difficult to get meaningful answer from the bank support about what’s happening

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

#556

Post by alisiddiq »

senectus1 wrote: post #183
robertlagrant wrote: post #57

Coffeezilla has been doing good work uncovering the mess that is Tether: https://www.youtube.com/watch?v=-whuXHSL1Pg&t=0s .

yeah. when this one pops it'll take close to a qtr of the value of btc with it.

Way more than that. It will take the market with it

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

#557

Post by teedeepee »

xur17 wrote: post #443
h2odragon wrote: post #421

Earlier quoted context omitted.

There are people "in crypto" who believe the FDIC will make good any losses on their investments; which they hold because "crypto can't be controlled or monitored by governments!" I'm expecting the talking heads to have to spend time on "why there won't be a bitcoin bailout" today or tomorrow.

> There are people "in crypto" who believe the FDIC will make good any losses on their investments Do you have a source for this? I'm heavily involved "in crypto", and have not seen any indications of beliefs like this.

On r/gemini (named after the NYC-based exchange), it's a misconception that I see (and occasionally dispel) very frequently.

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

#558

Post by Traster »

The thing that I think some people miss about Tether is that it's not about whether it is backed enough it's either fully backed or it isn't. If it's not, it's not a question of whether it's back enough to weather this storm, it's about whether the people running it think they can weather this storm. If they think they can keep it running they'll sell whatever backing they have and keep the peg. But if they even think there's a decent chance they can't permanently sustain the peg then the best thing for them to do is take the backing and run, not sink it into a stable-coin they now know isn't going to work. That's going to happen way before they run out of money.

Let's say for example, Tether is 20% backed and there's $100Bn of coins so the backing is $20Bn, and people start flooding out of it. Let's say $10Bn floods out. So the guys running it have handed out $10Bn. They now have $10Bn left, and money is still flooding out. Do they really continue to hand over the cash or do they say "Well, the whole thing is about to explode anyway, I'd rather keep the $10Bn cash I've got left". At which point the holders of the coin have to play "Find these fuckers and sue them" which will be difficult since they've got $10Bn to fight/flee/hide.

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

#559

Post by pjc50 »

onlyrealcuzzo wrote: post #492
nailk wrote: post #445

Earlier quoted context omitted.

> 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…

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

These are real things that have happened, although they're not very widespread. The question is whether using a risky system with no safety net is better than risking this: https://www.telegraph.co.uk/personal-banking/current-account...

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

#560

Post by ineedasername »

emteycz wrote: post #478
ptero wrote: post #463

Earlier quoted context omitted.

> There are valid stablecoins like USDC (they hold sufficient reserves) Those reserves are sufficient until they are not. There are always risks of losing the peg and anyone investing in them should be aware of and track the main ones. My 2c.

How is it any different from a bank? (I live in a country with well done digital currency regulation that is comparable to what banks have to do - let's not limit this to the case of Tether only).

>different from a bank

Depends on the country. In the US, FDIC insurance requirements mean that depositors will be reimbursed up to $250,000 if a bank collapses, so there's very little risk. If you need more than $250,000 in cash then you should probably have multiple accounts at different banks or park the money in some other highly liquid low-risk assets that are, as much as possible, uncorrelated.

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