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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

#951

Post by hnbad »

WJW wrote: post #251
hnbad wrote: post #170

Earlier quoted context omitted.

> convince yourself that 20% interest is a safe investment So what you're saying is people shouldn't expect to be able to massively multiply their wealth, but that directly contradicts the narrative that "anyone can make it" instead of the wealth and opportunities you're born into determining the likely upper limit of what you can hope for. I'm not disagreeing, but it's absurd to condemn people for falling for "get r…

> when the entire society is built around maintaining the lie Maybe the part of society that contains the crypto enthusiasts. Every part of society with a shred of financial experience has been pointing out that 20% is really really high compared to the risk free interest rate. Of course, pointing out that something is unsafe will not make you popular with the people dreaming of getting rich.

Okay, if 20% ROI is extremely unrealistic and physical labor is for fools, what's your story for the guy trying to come out of poverty and willing to put in whatever it takes?

Are you saying that the poor are just destined to remain poor?

I'm not saying the narrative they're told is correct, I'm saying the wealth disparities in society are undesirable and if just telling poor people to pull themselves out of poverty is not viable, we need other solutions to address those disparities.

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

#952

Post by WJW »

hnbad wrote: post #951
WJW wrote: post #251

Earlier quoted context omitted.

> when the entire society is built around maintaining the lie Maybe the part of society that contains the crypto enthusiasts. Every part of society with a shred of financial experience has been pointing out that 20% is really really high compared to the risk free interest rate. Of course, pointing out that something is unsafe will not make you popular with the people dreaming of getting rich.

Okay, if 20% ROI is extremely unrealistic and physical labor is for fools, what's your story for the guy trying to come out of poverty and willing to put in whatever it takes? Are you saying that the poor are just destined to remain poor? I'm not saying the narrative they're told is correct, I'm saying the wealth disparities in society are undesirable and if just telling poor people to pull themselves out of poverty…

I don't have a story for the poor guy trying to come out of poverty in the way you mean. The chances of becoming 0.1%-style rich are extremely slim and likely the best shot they have is to slowly work their way up so their children can be middle class and (if the children also work hard towards generational advancement) their grandchildren relatively rich. Getting Kardashian-style rich is unlikely to ever happen for more than a few thousand people in the world at a time. Telling people the truth (becoming extremely rich is very very unlikely) seems better to me than a beautiful but untrue story that might harm them financially (ie: invest in this shitcoin and we're all gonna make it).

Like you I think large wealth disparities in society are undesirable, but if those come from the way society is set up then society is what is going to have to change. If you really want to change society then set up a movement and convince large groups of people about your viewpoint, but be prepared for hostility from anyone with a vested interest in the status quo.

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

#953

Post by kgwgk »

iso1210 wrote: post #948
kgwgk wrote: post #271

Earlier quoted context omitted.

It's not more than double 15k, is it?

Yahoo finance says its 30,279.67 at the moment after a collapse in everything over the last week or so.

You wrote “it's still more than double it's 2018 bubble level”.

If you meant “in the future it may be again more than double its 2018 bubble level” you could have phrased it more clearly.

The 2018 peak was above 19k, by the way.

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

#954

Post by FeepingCreature »

randomsearch wrote: post #288
FeepingCreature wrote: post #210

Earlier quoted context omitted.

You just mint Luna at will. The problem occurs when the amount of Luna that trades for $1 becomes undefined because nobody is willing to do the trade anymore.

Eh, but minting Luna increases the supply of Luna and thus devalues it, therefore a run means that the price of Luna increasingly drops as you mint more, meaning you have to mint more Luna, it heads to zero, you're dead. It's the opposite of stable, because a run actually accelerates itself. What am I missing here?

The balance is ostensibly that you do get some tangible rewards for Luna. But when the expected value of those drops below the outstanding balance as well, you still have a death spiral.

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

#955

Post by FeepingCreature »

drugstorecowboy wrote: post #888
mensetmanusman wrote: post #563

Earlier quoted context omitted.

The rate of coin generation matters. Imagine a world of 100 people and 100 dollars. If the population doubles, and the 100 dollars remains fixed, the value of the dollar has increased. If more dollars are not printed to maintain some inflation, people will slow spending hoping for 300 people the next year. Now, in the case of BTC, it’s not global population that matters, but the population of interested users, which…

Why would people slow spending due to a fixed money supply? The money they have now could potentially buy more in the future, but at some point you have to actually buy the thing you need or want. Conversely in in an inflating currency scenario yes I might spend the money sooner than I would otherwise, but then in the future I won't be able to spend it again, why is it so much better that I buy today instead of tomor…

> The money they have now could potentially buy more in the future, but at some point you have to actually buy the thing you need or want.

That's the key. With a deflationary currency you want to keep the money, but need to buy goods. With an inflationary currency you want to buy the goods, so you only keep as much money as you need. This means that an inflationary market has shorter dependency chains, less disruptions (because value is more easily predictable) and generally runs more efficiently. Deflationary value incentivizes consuming less; inflationary value incentivizes consuming more. This is why economies grow and produce more value.

Of course this can be overdone by having an inflation that's so fast that deep production chains become impossible to manage, so you generally want inflation that's low enough that investment-based value gain is not affected, but high enough that money is not a viable investment vehicle.

Remember that money is what you have instead of something useful.

edit: For instance, if you have hyperinflation, you cannot buy a fabrication machine for your factory, because the monetary value of the machine grows faster than your ability to save money. The best use of money is always consumptively spending it immediately. This is also inefficient. So you want to balance between those two problems.

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

#956

Post by legulere »

FabHK wrote: post #428
legulere wrote: post #201

Earlier quoted context omitted.

Yes, until they run out of cash and you sit on worthless tether.

AKA bank run.

No. Banks have the problem that they can’t liquidate assets fast enough to pay people in a bank run. Stablecoins simply don’t have enough assets to pay out people.

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

#957

Post by Spooky23 »

prox wrote: post #775
Spooky23 wrote: post #538

Earlier quoted context omitted.

I think the prevalence and scale of criminal activity through crypto was under appreciated in the mainstream. Let’s be real, much of the market activity is money laundering, ransomware and other payoffs, and Chinese people bypassing currency controls. It’s no coincidence that China cracked down on miners and the price dropped a few months ago. It’s plain as day now that with Russia being removed from the internet and…

It wasn’t so long ago we had some fans of crypto on HN, lots of stories how this or that scheme was going to work. First movers want to sound and convince others they are right and “now” is the right time to step in. Most of it can be debunked if you had a good economy course that tells you how value is created.

I think the early days were full of promise. Circa 2010-2015 crypto felt like Wired magazine in 1994 about the internet.

Unfortunately, reality is a harsh mistress.

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

#958

Post by WindyLakeReturn »

lode wrote: post #188
tluyben2 wrote: post #112

Earlier quoted context omitted.

The religious (for a lack of better word as it is a religion to believe that cryptocurrencies are inherently better than other assets (outside NFTs) but they do believe that if you read twitter/reddit) people are hodling but all the 'saner' people I know went out in december. There was enough writing on the wall to know that 2022 would not be a good year for some assets (and it's just beginning). Only the real believ…

> it is a religion to believe that cryptocurrencies are inherently better than other assets (outside NFTs) Why would NFTs be worth anything more than the digital tulip bulbs of cryptocurrencies? NFTs are just as worthless IMHO.

They have some value relative to the system they are found in. Consider some fungible tokens which still have value. Say gold coins in online video games. These have some value, even when trading them is against ToS and will get you banned. Their value is relative to their usefulness in the game, and as long as the game in enjoyable, people will assign them so value relative to the enjoyment they can extract. Nothing about the game must be engaged in. There are people who live their entire lives without ever touching an MMO, much less a specific one like WoW or Runescape. Yet fungible tokens still have some value within those ecosystems.

Mobile games have taken this much further, with people buying fungible tokens for hundreds of dollars for the enjoyment they get, though this has become questionable as more of the game is engineered towards feeding an addiction which will cause players to pay more for their enjoyment.

The issue is the approximate cap on this value. Even by the inflated standards of whales paying for mobile games, we still see a cap of value around $1,000s for a month of value. Thus an NFT that provides value in a similar ecosystem should be able to max out at a similar evaluation, assuming it is tied to a system with as much investment in the fun as the big hit mobile games (which is often quite a lot of investment compared to what any single player, even whale, is spending).

We see NFTs going for much more than that in systems that have far less investment in being enjoyable, which I think can be contributed to people investing to get rich by selling at an even higher price.

In conclusion, I think that NFTs can have some inherent value, as much as fungible tokens in a game can, but that such value would be far below where the market currently is. Someone should only spend as much on NFTs when the enjoyment they get from spending on NFTs matches the enjoyment that similar amounts of money would bring from their other hobbies.

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

#959

Post by hnfong »

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…

No post body was provided.

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

#960

Post by nightski »

danielmarkbruce wrote: post #934
nightski wrote: post #785

Earlier quoted context omitted.

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.

https://www.sec.gov/about.shtml Basically, it's exactly that.

So no, it's not. The SEC is there to protect investors from malicious actors to allow them to make informed decisions not based on lies & manipulation.

Now one can be informed but also choose to make stupid decisions. People do this all the time on penny stocks, options, etc... The SEC has no interest in trying to stop them, just making sure they know up from what they are getting into.

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