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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

#781

Post by eric_cc »

ethbr0 wrote: post #697
SamBam wrote: post #599

Earlier quoted context omitted.

> That's quite literally disavowing responsibility. Unsure how you failed to read the emphasis on " themselves " in the comment you're replying to, and the line about protecting others.

Taking umbrage on behalf of others, in a matter that should be personal choice, is equally questionable. Half of this thread believes we should protect people from themselves. The other half believes people should have the freedom to screw themselves over. Not sure there's much ground for compromise, given the contradictory nature of those positions.

> Half of this thread believes we should protect people from themselves.

> The other half believes people should have the freedom to screw themselves over.

Nailed it. It comes down to principles. Do you believe in personal freedom? Or do you prefer authoritarian governments?

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

#782

Post by andrewla »

eru wrote: post #379
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…

Currency pegs and currency boards can work quite well. You just need sufficient assets to cover them. See https://en.wikipedia.org/wiki/Currency_board Btw, not only sovereign nations have these issues. Your bank also tries to maintain a peg between one dollar in its account books and one dollar in government money. Similar (but more roundabout) for things like Amazon gift cards. For a country without an established,…

> You just need sufficient assets to cover them

Oh, is that all?

To have a zero-risk peg you need to have as much reserve currency as you have issued currency; if you issue 1e6 fun-bucks that are pegged at 1:1 with the USD, you need 1e6 dollars.

If your country has banks, and you allow those banks to engage in fractional reserve banking, and you make guarantees to depositors that you will make them whole no matter how terrifyingly bad those banks are at their job, then holding dollars at 1:1 is insufficient. And depending on what kind of reserve requirements you have, the multiplier can get very large very quickly.

If you allow commercial banks to operate, then, as they say, you can fuhgeddaboutit. No amount of assets backing your peg can possibly be sufficient. You can push the tail out further, but such guarantees will only make your commercial banks more aggressive and increase the systemic cost of a failed peg.

If you choose to issue sovereign debt in your pegged currency, or support pension funds for your citizens, or anything like that, then ... don't peg your currency. Issue your own sovereign currency and get yourself some nuclear weapons.

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

#783

Post by Danidada »

unityByFreedom wrote: post #737
Danidada wrote: post #722

Earlier quoted context omitted.

it's pretty much the same. Black market and crypto market are arbitraged between them so the price of one isn't too different from the other

Ok but without crypto would black market rates rise? I gather that was the point.

Oh that's a different question IMO. Crypto is making it easier to bring dollars from abroad so I get it does lower the black market cash dollar's prices in that sense. Big international crypto exchanges like binance aren't yet regulated here so technically the crypto world IS part of the black market anyway

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

#784

Post by CPLX »

progrus wrote: post #603
CPLX wrote: post #480

Earlier quoted context omitted.

Our society has made a different call. We have decided that without being restricted investment cons will cause massive harm to society. We decided this because it happened over and over and over and over again.

We did not decide this. You are just pretending that this has been decided the way you like. FDR is long dead.

The current existence of the SEC I believe is sufficient to reinforce my point.

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

#785

Post by nightski »

eric_cc wrote: post #771
Mvandenbergh wrote: post #472

Earlier quoted context omitted.

The reasons this is nonsense are twofold: First, I have never actually seen any comments here disavowing themselves of responsibility. It is always aimed at protecting others and this is rooted in the obvious fact that a very large number of people are not (and we do not expect them to be) experts in investment. That assets can go up or down is one thing, and nobody can be protected from that, but there is an extensi…

> people are not (and we do not expect them to be) experts in investment. So then they should stay out of the game. I totally disagree that we need a bunch of bullshit laws protecting people from poor decision making.

That's not what the post you replied to said at all and you are being intentionally obtuse. There is a reason the SEC exists. It's not to keep people from making bad decisions.

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

#786

Post by freeone3000 »

gilbetron wrote: post #532
jmyeet wrote: 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…

> (particularly NFTs, which seem to be 99% scams) What is the 1% you think aren't scams?

I bought an NFT of the Brooklyn Bridge, and I am very happy with my purchase.

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

#787

Post by lizknope »

f0xJtpvHYTVQ88B wrote: post #686
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…

> Tether reserves the right to refuse registration to, to bar transactions from or to, or to suspend or terminate the administration of Services, Digital Tokens Address, or Digital Tokens Wallet for or with, any user for any reason (or for no reason) at any time > Tether reserves the right to delay the redemption or withdrawal of Tether Tokens if such delay is necessitated by the illiquidity or unavailability or loss…

crypto currencies need an FDIC

Which would defeat the point of crypto currencies

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

#788

Post by eric_cc »

kmeisthax wrote: post #755
jmyeet wrote: post #589

Earlier quoted context omitted.

> First, I have never actually seen any comments here disavowing themselves of responsibility. Pulling from the comment I was replying to: > ... many poorer and financially illeterate people have been tricked ... That's quite literally disavowing responsibility. > ... but there is an extensive body of law intended to protect people from outright falsehoods This is true and the law hasn't quite caught up to crypto sca…

> even if the scammers get prosecuted--possibly even go to jail--you're 99% likely never getting your money back The point of prosecuting scammers is not restorative justice[0], but instead punative. You want the penalty for scamming people to be high enough that even the scammers that don't get caught move onto a different grift. Whether or not punative justice works is very context-sensitive. It requires the crime…

> You will laugh at the people who bought into FOMOCoin or sent thousands of dollars to a refund scammer... only to click on, say, a fake FedEx tracking link you got e-mailed and wind up getting hit with some 0day malware that drains your bank account or encrypts your files in seconds.

Terrible comparison.

FOMOCoin is not pretending to be something different than FOMOCoin. When somebody invests in a shitcoin, they know exactly what it is they are investing in.

When you click on a fake FedEx link, you believe you're clicking on a FedEx link. You've been deceived by blatant deception.

A better comparison to your FedEx example: Investor believes they're investing in FOMOCoin when in fact they are investing in SHITCoin or no coin at all. It was a trick.

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

#789

Post by shkkmo »

vmception wrote: post #754
mwill wrote: post #191

Earlier quoted context omitted.

Do people in crypto sincerely believe Tether is backed? I'm not being sarcastic here, I'm genuinely asking. I'm a bit of a skeptic of how the crypto market has developed overall, and the intentions of the major players, so I keep reminding myself that I'm biased, but I haven't believed Tether is even remotely close to being fully backed for a long while, and I've just sort of assumed everyone who's 'bought in' to the…

Generally Western people do not believe in Tether. People believe in it regionally. The counter argument is that Tether's growth is the exact same as USDC's growth and other stablecoin's growth, especially those that are structured in the exact same way, with 1:1 redeemability for fiat somewhere. Some of those, people like the level of validation they show, others have undermined trust and never show the level of val…

> Meaning that at one point and subsequently, Tether did match their leel of review, and at one point was backed 100%. Tether has had skepticism from the day it was created nearly 10 years ago, and a US authority got all the information was like "well that one time in 2018 we didn't like that". Tether is not 100% backed by dollars, it mostly is though.

This is some serious spin and misinformation. I can't believe you'd post this with a straight face.

The "100% USD backing" was at best more like 67% at the end of 2021, the rest is "commercial paper".

The "US authority" (OAG) was more like: you lied repeatedly about how you were backed, here's a big fine and you aren't allowed to do business here (New York) anymore.

Edit: The only reason we know that Tether was 2/3rds backed at the end of 2021 is because they are required to share that information as part of the settlement with the OAG.

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

#790

Post by bbno4 »

alexb_ wrote: 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…

Actually Tether was released in 2014, and there's earlier stablecoins.
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