$3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse • Hacker News Board

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#511

Post by tasuki » Tue, May 17, 2022, 4:21 PM UTC

matheusmoreira wrote: post #404

MadcapJake wrote: post #356

Earlier quoted context omitted.

Laymen here: How can they introduce numberless BTC? I thought that was the crux of what makes this different from fiat: you can only transact from one address to another, no institution in between.

I've written more detailed posts here: https://news.ycombinator.com/item?id=31375366 Accounting tricks, basically. They say you have BTC in your account when in fact your deposit is tied up in investments, loans.

This still doesn't change how many BTC are in circulation. When the fractional-reserve imaginary bitcoin implodes, it might even increase the price of actual bitcoin?

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#512

Post by [deleted] » Tue, May 17, 2022, 4:27 PM UTC

eric_cc wrote: post #92

loceng wrote: post #78

Earlier quoted context omitted.

What functionality was different between Bitcoin and Luna? Is Luna not run off of Bitcoin? So if Luna could function as a Ponzi scheme, why doesn't Bitcoin inherently have that same capability or function embedded into it? Or is there something preventing that from happening with Bitcoin? Confused.

Terra (token LUNA) is its own chain. Trillions of brand new LUNA tokens were minted within the span of a day or so rendering the token worthless. This is due to the way LUNA was tied to the algorithmic stablecoin UST. It was a true ponzi. BTC's max supply is capped and the release schedule of new coins is fixed and predictable. There is no possible way that trillions of new bitcoins could suddenly be created.

[deleted]

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#513

Post by snovv_crash » Tue, May 17, 2022, 4:39 PM UTC

peyton wrote: post #334

snovv_crash wrote: post #201

Earlier quoted context omitted.

Luna crashed because people lost trust in it. The only reason people have trust in BTC is because other people have trust in it. If that ever changed, there is no actual use for a BTC, and they are thus intrinsically worthless. Fiat currency has the backing of a government. The government demands certain payments of this currency in order to own land, and also for some extra rights like mineral extraction, fishing li…

I don’t understand your argument. What happens during hyperinflationary periods or other currency collapses? The government stops demanding payments?

Monetary supply outstrips the government's ability to collect on it. It is usually done on purpose to benefit some ruling individuals or for strategic reasons to zero the value of a country's debt. But I challenge you to find any example where the hyperinflation didn't make sense to pursue to the people in charge of the money supply.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#514

Post by solveit » Tue, May 17, 2022, 7:17 PM UTC

deadbunny wrote: post #348

solveit wrote: post #287

Earlier quoted context omitted.

A smart attacker wouldn't create trillions of bitcoin, they would create a steady trickle of bitcoin indistinguishable from a medium-sized private mining operation that is too small to be noticed for a good while but large enough to make the attacker very very rich. It won't be noticed for months or even years and you cannot erase years of history. There will be no fix, only damage control. That said, SHA-2 being bro…

That not how bitcoins are created. You don't just make a few extra. The block reward is fixed, if someone made a block with more than the block award it'd be rejected by the network.

You are agreeing with me. An attacker that has broken sha-2 would pretend to be a miner, not mint trillions of bitcoin (which is not possible as you say).

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#515

Post by minsc_and_boo » Tue, May 17, 2022, 8:01 PM UTC

nradov wrote: post #363

Strom wrote: post #335

Earlier quoted context omitted.

Bitcoin also has the backing of a government - El Salvador. I would rather argue though that even government backed currencies are fully dependant on trust, not government usage of it. Just check out any government currency hyperinflation event.

El Salvador is a failed state about to default on its national debt. It's not a real "government" in the way that most of us would define the term.

El Salvador also doesn't use Bitcoin.

91% of El Salvadoreans prefer to use USD, and most stopped using Chivo (the privately-owned, government controlled wallet) after withdrawing their initial deposit.

https://www.elsalvador.com/noticias/negocios/el-salvador-bit...

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#516

Post by lamontcg » Tue, May 17, 2022, 9:18 PM UTC

estsauver wrote: post #493

slv77 wrote: post #137

Earlier quoted context omitted.

Even if nobody is bullish on the fundamentals there will still be short sellers looking to cover short positions which can drive markets up. One of the benefits of allowing shorting of stocks is that it provides liquidity even in the worst of times.

Why would short sellers be needing to sell positions during a crash? The market has been dropping so a significant number of these short sellers won't have to sell.

Because people emotionally decide that everything is crashing RIGHT NOW and go short to try to make money off of it because IT CAN ONLY GO DOWN.

Does it seem completely inconceivable that the SPX might not reverse and touch $4766 again? Well why don't you take up a leveraged short position which will be highly profitable if the SPX doubles its current fall which you won't be forced to cover unless the SPX bounces back up again. It's free money.

Except double tops in the market happen, precisely because people decide it's all over and at this point in the market take out short bets, and then get burned when it bounces back up and destroys them. As the market in a doomed economy actually goes upwards they all get burned and squeezed which fuels the short squeeze bounce, even though it violates conventional wisdom.

Once you've destroyed all those people who think they've found the gold mine of a safe leveraged bet then the second downwards move can exceed these lows because those people are licking their wounds (but triple-tops happen as well).

To a certain extent the stock market is an optimization engine that ruins literally everyone who thinks they understand the short term direction of the market. If it didn't, you'd be able to make safe money off of it.

The fact that everyone in this thread thinks its all falling, falling, falling means it is probably going to bounce up about now for a bit (of course if that was a 100% safe thing though you could make safe money off of it so nothing is ever entirely certain -- and Russia might launch a nuke at NATO tomorrow).

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#517

Post by lamontcg » Tue, May 17, 2022, 9:26 PM UTC

Jabbles wrote: post #196

lamontcg wrote: post #108

Earlier quoted context omitted.

> “In a sense, the market is going to take that as kind of bullish.” I mean everything is a bit oversold right now on negative emotions, both in the crypto space and in the stock markets. There's probably going to be a positive bounce just because markets don't move in straight lines. There is always the chance that something else explodes due to stress tomorrow and hits the headlines and crypto and/or stocks start m…

> There's probably going to be a positive bounce just because markets don't move in straight lines. To emphasize the uncertainty in your "probably", I will point out that Luna didn't bounce: https://coinmarketcap.com/currencies/terra-luna/

That's why I said probably.

I think it would take something like Russia launching nukes at NATO to cause the stock market to tank in a straight line though.

Maybe less extremely, Russian nat gas going to Germany being shut off overnight might do it as well.

Stocks/securities/crypto usually never go straight down unless it has become apparent that they're fundamentally worthless. I don't see that becoming common sentiment with the US economy.

More likely we're going to see a short squeeze start around now though. WSB on reddit is likely piling into the SPY heavily short, expecting the market to drop line a stone like it did at the start of the pandemic and they're dreaming of chicken tendies. They'll likely get blown out in a squeeze.

Likely, likely, probably though.

I can also predict the winner of the premiere league today based on the odds, but they still gotta play the games.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#518

Post by nl » Tue, May 17, 2022, 10:06 PM UTC

Nursie wrote: post #475

nl wrote: post #394

Earlier quoted context omitted.

In the non-blockchain space this is called "credit creation" and it absolutely is something that happens there. But this doesn't happen with Bitcoin. It's true that there are a number of DeFi apps that will loan BTC. However if you look at the loan mechanism it is different to how it is done in traditional finance. A BTC loan is done in one of two ways: 1) The original owner of the BTC is given an IOU in the form of…

> But this doesn't happen with Bitcoin. It doesn't happen on the bitcoin blockchain. Exchanges are black boxes though, we don't always know what's going on in there.

No, that makes no difference.

If you think otherwise explain the mechanism you think is happening.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#519

Post by louloulou » Tue, May 17, 2022, 10:08 PM UTC

FireBeyond wrote: post #484

louloulou wrote: post #450

Earlier quoted context omitted.

> 1) why are you comparing to credit cards? The average ACH transfer costs zero dollars. As far as I understand ACH doesn't work globally > 2) why did you pick $100 as your basis? If I try to buy a $5 sandwich in Bitcoin and have to pay 20% transaction fee that is not a good platform for transactions. Or use lightning and pay a fraction of a cent transaction fee

Ahh, Lightning. The network that is simultaneously "here and available and usable, right now" when convenient, and "still a few years away", when that argument is convenient.

Maybe just try actually using it yourself so that you know what you're talking about, rather than being confused by random people on the internet.

Re: $3B in Bitcoin was sold in a last-ditch attempt to save UST from collapse

#520

Post by jimmydorry » Tue, May 17, 2022, 10:39 PM UTC

lottin wrote: post #481

jimmydorry wrote: post #467

Earlier quoted context omitted.

One of their largest industries (up there with tourism) is remittance processing (mostly for out of the US) denominated in US dollars. Most of their local economy operates on US dolar too, which means accepting Bitcoin everywhere offers some significant advantages: 1. Not being beholden to the whims of American banks and the American government 2. Less administrative overhead would mean being able to offer more compe…

> One of their largest industries (up there with tourism) is remittance processing What percentage of El Salvador's GDP does remittance processing represent?

As I mentioned in my comment above (from the article) ~23%.