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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

#661

Post by Wowfunhappy »

adhesive_wombat wrote: post #30

The fact that they've been minting billions of tether without collateral should make it abundantly obvious that this isn't a stablecoin and never had been. Anyone can pretend to have a peg in the good times, that doesn't mean there's really a peg or that the peg will remain in bad times. And if you can't count on the peg in bad times, it's not a stablecoin. If you've been honestly working on the assumption that it is…

> If you've been honestly working on the assumption that it is, then you deserve to lose your (real) money to some crypto VCs on an island somewhere.

Would you feel the same way about people who loose money to “I’m calling from Microsoft IT”-type scams?

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

#662

Post by cdiddy2 »

ptero wrote: post #484
can16358p wrote: post #355

Earlier quoted context omitted.

Yup. I live in Turkey, and don't trust the local currency (Lira) and the government's power over banks to keep my dollars too. Crypto is the safest in that sense for me, and a stablecoin is ironically more trustworthy than my country's currency in general. Yet I don't trust USDT or UST so I'm on relatively more trustable USDC or BUSD.

It seems to me that some gold coins would work even better in this situation (for longer term savings, not something you move in and out every month). Did you consider this? An honest question.

its harder to send/receive, harder to verify authenticity, and harder to store gold coins compared to any crypto asset

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

#663

Post by amelius »

pjc50 wrote: post #317
amelius wrote: post #304

Earlier quoted context omitted.

There should be a law that currencies are used for legitimate payments for more than X% and otherwise the currencies should be marked as gambling money. How to measure? I don't know, but I'm sure the IRS can come up with something.

A law where? To the extent that Tether is anywhere, it's in notorious financial law evasion island Grand Cayman. It's already illegal to supply overseas gambling services to Americans (Pokerstars). Quite a lot of the crypto world would arguably be ruled illegal under existing law if it was prosecuted before an American court - or a British one, or many other jurisdictions. It's just that there's so much of it, it mov…

I think a ban can work quite well as a deterrent. If ThePiratebay/PopcornTime was not illegal, we wouldn't have Netflix&co.

It's not perfect, but I think a ban can be very effective.

Also, I'm tired of hearing cryptocurrency-related stories at social events and in podcasts. If it were illegal, I believe people would be more reluctant in spreading these stories.

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

#664

Post by tootie »

frostwarrior wrote: post #643
Traster wrote: post #558

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 thin…

Serious question, how can you sue over this kind of thing? I thought the whole point of crypto is that it's not regulated. And that also meant that if you got screwed then you are SOL.

It's basically all uncharted waters. Yesterday's freakout over Coinbase saying that all customer assets could be seized in the case of bankruptcy was basically them saying they have absolutely no idea what would happen because no precedent exists. In reality, regulatory agencies have broad authority and can seek more when needed to deal with unexpected events. If they think Coinbase or Tether represent a systemic risk, they will find a way to bail out investors because the downside risk of doing nothing is too great. It's possible some of the major crypto institutions have reached Too Big To Fail status regardless of whatever statutory authority exists to protect them. The biggest problem is simply that ownership is anonymous so we have no idea which countries have the most exposure or who to rescue.

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

#665

Post by frostwarrior »

alexk307 wrote: post #652
frostwarrior wrote: post #643

Earlier quoted context omitted.

Serious question, how can you sue over this kind of thing? I thought the whole point of crypto is that it's not regulated. And that also meant that if you got screwed then you are SOL.

They can be sued if they claim that they hold more assets than they are issuing. If you tell everyone that it's a dollar per coin, and suddenly there are 5 billion coins, you better have $5 billion to your name somehow. Not sure if there have been similar lawsuits in the crypto world yet.

For that to be true, that coin needs to abide to the same laws as real currency.

If I say that "1 dollar = 1 virtual thingy" and suddenly there are a lot of virtual thingies and their price fall, then what's the crime aside me personally being a lying f*ck that can´t be trusted anymore?

I don't see how "legitDollarCoins" is legally more legit than, say, lootboxes.

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

#666

Post by whimsicalism »

Traster wrote: post #558

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 thin…

Dude, it's at 99.5 cents.. it's dipped this much before.

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

#667

Post by whimsicalism »

fooyc wrote: post #489
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…

My understanding is that people don't invest in stable coins (like you don't invest in USD when you have USD on your brokerage account). Stable coins can be exchanged against other crypto currencies on chain. So if you are willing to trade crypto currencies, stable coins are more practical than USD. There are also tax implications: Depending on where you live, crypto-to-crypto profits are not taxable. You will be tax…

> There are also tax implications: Depending on where you live, crypto-to-crypto profits are not taxable. You will be taxed if you sell crypto currencies for USD, but not if you sell crypto currencies for a stable coin.

At least in the US, this is not true.

e: Not sure why I'm downvoted - crypto to crypto conversions are taxable in the US.

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

#668

Post by lxgr »

whimsicalism wrote: post #666
Traster wrote: post #558

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 thin…

Dude, it's at 99.5 cents.. it's dipped this much before.

It was at 95 cents about six hours ago.

Not entirely unexpected to see a dip of that magnitude due to limited liquidity at nighttime when most USD payment rails are offline (market makers don't have infinitely deep pockets), but also not exactly confidence-inspiring.

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

#669

Post by eqmvii »

alexk307 wrote: post #652
frostwarrior wrote: post #643

Earlier quoted context omitted.

Serious question, how can you sue over this kind of thing? I thought the whole point of crypto is that it's not regulated. And that also meant that if you got screwed then you are SOL.

They can be sued if they claim that they hold more assets than they are issuing. If you tell everyone that it's a dollar per coin, and suddenly there are 5 billion coins, you better have $5 billion to your name somehow. Not sure if there have been similar lawsuits in the crypto world yet.

Tether isn’t a real company operating in a country that applies laws to it. That’s the whole point.

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

#670

Post by mcintyre1994 »

SamBam wrote: post #615
reedlaw wrote: post #490

Earlier quoted context omitted.

Burning US $1 notes could not provide backing for minted coins. A better analogy is currency backed with gold without enough in reserve to handle a run on the bank.

How does burning over 100 MWh of electricity provide backing for a minted coin, yet directly burning currency doesn't? What's the difference, besides the pollution?

It could provide some level of scarcity, so if there was demand you could achieve some sort of value. It wouldn't be stable though - you couldn't make a stablecoin on proof of work either AFAIK. I guess it'd have an upper bound at $1 (why buy it for $2 if you can just burn $1), but no lower bound. So.. maybe it is a stablecoin :)
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