Tether starting to lose its peg too, after Terra did • Hacker News Board

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

#701

Post by danaris » Thu, May 12, 2022, 1:55 PM UTC

micromacrofoot wrote: post #653

mrep wrote: post #553

Earlier quoted context omitted.

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

I suppose I'm wondering if the definition of "hard work" has shifted. In the '50s and '60s was "hard work" like 60 hour weeks and "hustle economy" type of stuff? or was it just "doing a good job" 40 hours a week?

I think to some extent it's always depended on who you talked to, but "hustle culture" as we know it today definitely wasn't part of the ideal of the American Dream at any point before the '90s, at the very earliest.

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

#702

Post by FerociousTimes » Thu, May 12, 2022, 1:55 PM UTC

shafyy wrote: post #55

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. The sad reality is that many poorer and financially illeterate people have been tricked by VCs and other grifters into this with billions of dollars spent in advertising. So, no, they don't deserve to lose their money to these assholes. These assholes need to be prosecu…

A fool and his money are soon parted, nonetheless

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

#703

Post by xur17 » Thu, May 12, 2022, 1:56 PM UTC

NavinF wrote: post #20

“Will Tether collapse by the end of 2022?”: https://www.metaculus.com/questions/9121/tether-to-collapse-... Community Prediction: 33% My Prediction: 50%

Would you be willing to make a bet (with money) based on those odds?

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

#704

Post by whimsicalism » Thu, May 12, 2022, 1:56 PM UTC

dragontamer wrote: post #15

jallen_dot_dev wrote: post #4

If Tether is backed, then Bitfinex could buy currently-discounted tethers off the market and redeem them for face value, pocketing the difference. The fact this is not happening means they really don't have the money, do they?

In the short term, they have the reserves for sure. In the short term, this is more of a classic bank-run. The Terra-coin + Luna scared a lot of cryptocoin holders, and now they're running away from another stablecoin. Even if Bitfinex had the money, the amount of traders leaving USDT has to be a colossal amount. The amount of money Bitfinex can transfer at any given time is limited, so the peg will bend and buckle.…

> UST / Luna had substantial reserves.

This alone suggests you don't know what you are talking about.

Compare to reserves backing Dai, or the reserves USDC claims to have. UST/Luna had nothing and they were also highly correlated. It was a stupid stablecoin to hold in, which is why I never did - despite having holdings in Dai & USDC.

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

#705

Post by whimsicalism » Thu, May 12, 2022, 1:57 PM UTC

turtledove wrote: post #59

rtpg wrote: post #32

Earlier quoted context omitted.

You need to show up with $100k to do the redemption. Granted if you did the round trip with only $10k you’re looking at peanuts in arbitrage but it _is_ a way for them to prevent real arbitrage that feeds into itself. I bet the fact that people wanting to short don’t believe they have the funds doesn’t help. But hey if you are a millionaire short tether might be worth setting up the recurring trade out!

So wait, assuming I had a hundred k, and they were willing and able to pay out, I could buy 97k of tether and redeem it for 100k? Just an instant 3% return? This seems like there's no way they are opening themselves up to arbitrage like this.

Yes. It's priced this way because people don't trust Tether, but it is a massive opportunity for profit if you want to take the risk.

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

#706

Post by rawoke083600 » Thu, May 12, 2022, 1:58 PM UTC

bspammer wrote: post #495

kevingadd wrote: post #475

Earlier quoted context omitted.

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?

Many Many nodes :) i.e distributed

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

#707

Post by ptero » Thu, May 12, 2022, 1:59 PM UTC

ulzeraj wrote: post #656

ptero wrote: post #540

Earlier quoted context omitted.

You compare the convenience of a download against having an asset with a few millenia of history in your physical possession (which is not without its own risks) and pick your poison.

Try passing through border control on such countries while packing gold or expensive gold accessories.

Gold is one of the easiest things to smuggle: it is compact and can be easily melted, painted over, made to look like a cheap tourist souvenir, mixed with other components, etc. and then recovered at the destination.

That does not mean that it is trivial to smuggle gold out, but if you need to do so, the chance of success is pretty high. Much higher than smuggling out fiat money held in a government-regulated account during capital controls. My 2c.

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

#708

Post by the_only_law » Thu, May 12, 2022, 2:00 PM UTC

greyhair wrote: post #482

mensetmanusman wrote: post #460

Earlier quoted context omitted.

This mentality of blaming the victim can muddy the waters and make it easier for criminals to get off the hook though.

Victim blaming is wrong, I agree with that completely. But a lot of 'coins' are just paper dreams, and live somewhere on the spectrum of the Nigerian Prince scam. (that, I realize, being the extreme example) I have a hard time feeling sorry for someone that wires $10,000 to a foreign country so that a wire transfer of $20,000,000 can be processed to their bank. People just don't go around handing out money. Early Bit…

> But a lot of 'coins' are just paper dreams, and live somewhere on the spectrum of the Nigerian Prince scam.

If social was full of people showing off all the stiff they bought with the Nigerian Prince’s money maybe. Seems more like a lottery to me, but even that feels like a poor analogy.

The difference is crypto has made people wealthy, probably with a large luck component and others want in on that.

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

#709

Post by encoderer » Thu, May 12, 2022, 2:01 PM UTC

frostwarrior wrote: post #665

alexk307 wrote: post #652

Earlier quoted context omitted.

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.

You don’t need a crime to sue somebody. You need a tort.

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

#710

Post by Loic » Thu, May 12, 2022, 2:02 PM UTC

DebtDeflation wrote: post #437

https://finance.yahoo.com/news/tether-reduced-exposure-comme... The CTO of Tether issued a statement earlier today stating that Tether has significantly reduced its exposure to commercial paper and now holds the majority of its reserves in US Treasuries. That should be super easy to verify, yet he refuses to release any details, saying to just wait for their next quarterly update on reserves (which in the past has ju…

Madoff used the same approach to tell everything was safe: "By purportedly selling its holdings for cash at the end of each period, Madoff avoided filing disclosures of its holdings with the SEC, an unusual tactic.".[0]

This way, each time the market was down, he would answer, me paraphrasing: "nothing to worry about, I was liquid".

Seen from outside, this feels the same... now suddenly backed by something way more secure, no external audits.

As somebody totally outside of the crypto currency bubble, I looked for the first time today at the official market capitalization of these currencies, these are mind blowing, I simply do not understand how they can be so.

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