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Tether Discussion featuring Bennett Tomlin and George Noble

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Re: Tether Discussion featuring Bennett Tomlin and George Noble

#111

Post by qeternity »

oraphalous wrote: post #108
qeternity wrote: post #30

Earlier quoted context omitted.

Here is a perfect problem with crypto: people understand just enough tech or economics to be dangerous, and not enough to truly understand the system. This is of course absolutely not how things work. The risk isn’t with the dollar holders in the banking scenario because a dollar isn’t backed - it doesn’t need to be backed. This is the essence of fiat currency. The risk is with depositors (creditors), and as you say…

>But in the bank scenario, the dollars that it loaned out aren’t worth any less. Just a small point of clarification - I think - that helps to make your point a little clearer. If the bank collapses - it's likely precisely because those loaned dollars ARE worth less. Commonly in bank collapses - those that borrowed from the bank can't repay for whatever reason. Creditors to the bank then get spooked and demand 'redem…

> Just a small point of clarification - I think - that helps to make your point a little clearer.

> If the bank collapses - it's likely precisely because those loaned dollars ARE worth less.

I get what you mean, but it's not quite the same. The loan, as in the receivable, is worthless and thus might prompt/contribute to a bank run/collapse. But the only reason defaults are an issue (like in this scenario) is precisely because the loaned dollars do have value, and the bank (and its depositors/creditors) want them back.

It's all just assets and liabilities.

Re: Tether Discussion featuring Bennett Tomlin and George Noble

#112

Post by notahacker »

javert wrote: post #97
nradov wrote: post #65

Earlier quoted context omitted.

The US gains some minor benefits by providing the reserve currency used for most international oil trades. However that's only a small fraction of worldwide dollar use. Even if everyone switched to trading oil in euros tomorrow that wouldn't cause a dollar crash. https://foreignpolicy.com/2009/10/07/debunking-the-dumping-t...

This article is interesting and helpful. So, thanks. That said, I'm not 100% convinced. If we stop trading oil in dollars, doesn't that reduce the need for countries to keep dollars in reserve? It could be the beginning of a slippery slope.

The amount of dollars kept in reserve to trade oil with certain petroleum exporters is a tiny proportion of total dollars in circulation

What is useful is having quadrillions of dollars of other payment obligations denominated in dollars, from the IRS to mortgage debt to IMF loans to international financial markets to people paying cash rent in Ecuador, and a central bank that can raise interest rates if it believes the demand for dollars is falling.

Sterling is still valuable, despite the fact it stopped being the main global reserve currency decades ago and the UK doesn't have any real ability to invade people to change that.

Re: Tether Discussion featuring Bennett Tomlin and George Noble

#113

Post by gitfan86 »

ahtihn wrote: post #50
janandonly wrote: post #29

There are a few issues at play here: 1. A lot of newly 'minted' Tether's are being used to buy Bitcoin (so prop it up, the Bitcoin price rises). 2. Possibly as a next step, these now more valuable bitcoins are than sold for real money, and the owners of bitfinex/tether pocket this real earned money as profit. 3. It should be noted that although the total amount of tether is still rising, the total amount of all "stab…

Regarding point 4, it has nothing to do with unbanked people. The demand for stable coins comes from exchanges that don't want to deal wih US financial regulations.

Exactly. If I want to borrow your comic books and lend them out to my friends for a fee, I can pay you a cut on the money I make lending them to my friends. I can't do the same thing with money because then I am a financial institution. So instead I use stable coin crypto because that isn't money.

Re: Tether Discussion featuring Bennett Tomlin and George Noble

#114

Post by riffraff »

FDSGSG wrote: post #67
swarnie wrote: post #36

Earlier quoted context omitted.

I think its more that Tether, the coin which provides the most liquidity in the market is an obvious scam. I know too many people are too deeply involved now to accept it...

>the coin which provides the most liquidity in the market is an obvious scam. But what does that actually imply? What's the scam? This isn't a black and white thing. Tether might not have sufficient assets to be able to redeem any USDT for USD, or Tether might actually have sufficient assets and willingness to redeem all USDT and then some... or anything in between. Tether being dishonest is one thing, Tether not bei…

But that's the point: the assets they have are not safe as treasury bills, and in a significant part they are backed by risky assets, including other stuff that depends on crypto, so if ever there is a bank run they will not be able to keep up with the redemptions.

The fun bit is that few can actually redeem, and most of those who could have a vested interest in never doing it anyway!

Re: Tether Discussion featuring Bennett Tomlin and George Noble

#115

Post by tromp »

adrr wrote: post #63
whatanorigtht wrote: post #37

Earlier quoted context omitted.

Sure thing. The rise in bitcoins price certainly has nothing to do with the actions of central bankers. Have fun staying poor. Never leave your hackernews echo chamber.

You literally stated the problem with crypto. They are get rich schemes.

Nearly all are. Due to premines, insta-mines, fast-mines, and taxes, benefiting the creators/founders, and early adopters.

Re: Tether Discussion featuring Bennett Tomlin and George Noble

#116

Post by nradov »

javert wrote: post #98
rmah wrote: post #84

Earlier quoted context omitted.

Saudi Arabia has the fifth largest military budget in the world. They spend more than Germany, France or the UK. Their training and readiness probably isn't nearly as good, but to say they have no military is ... odd. More to the point, many nations sell oil for non-USD. It's quite common. Further, the oil trade is a small fraction of international USD movement. The idea that the "petrodollar" is a major factor in in…

Wikipedia says the Saudis have the 9th largest defense budget in the world. They also have a decent sized army, navy and air force. TIL. I was under the impression that the Saudis literally didn't have a military, because the ruling family was afraid of coups.

Saudi Arabia has a large military to deal with external threats. And they also have a large and separate National Guard to protect the royal family from coups and terrorists.

Re: Tether Discussion featuring Bennett Tomlin and George Noble

#117

Post by TomSwirly »

repomies69 wrote: post #66
NikolaNovak wrote: post #46

Earlier quoted context omitted.

"have fun staying poor" I don't understand the notion that bitcoin is making all people rich. It is a transactional system at best. If you cash out you are taking somebody else's money who decided to buy it at higher price. It has no fantastic democratizing magic which will make all people rich. It is. It building new things. I can understand people who are invested in it wanting to perpetuate the positive story so t…

> It has no fantastic democratizing magic which will make all people rich. It is. It building new things. If you prefer to hold bitcoin instead of fiat and are willing to spend a little bit effort on that and digest some transaction costs, I think it is very likely you will become wealthier. However the promise to get rich is something entirely different. Not many people in the world can be rich. You have to take out…

> I think it is very likely you will become wealthier.

Bitcoin does not produce or destroy US dollars. So for each US dollar that you take out of Bitcoin, some later investor needs to put in a US dollar.

What happens when the supply of new suckers stops? It's not like BTC has any dividends, or makes some product that it can sell.

Re: Tether Discussion featuring Bennett Tomlin and George Noble

#118

Post by chaostheory »

WalterSear wrote: post #91
cobookman wrote: post #26

Sometimes I wonder if this is how Michael Burry and others felt before the housing crash. Right before the housing crash, most the in-industry folks were fully aware it was unsustainable, but they felt it would continue long term. Same goes for tether, majority of those involved in crypto know what they are doing, and the pump-up effect it's had to crypto.

> Same goes for tether, majority of those involved in crypto know what they are doing, and the pump-up effect it's had to crypto. Not at all. While those at the executive level have some awareness, the rank and file that I interact with at crypto companies barely understand the tech, and have no knowledge at all of the environment. It's flabbergasting.

Can you give examples of their lack of knowledge?

Re: Tether Discussion featuring Bennett Tomlin and George Noble

#119

Post by TomSwirly »

chaostheory wrote: post #45
whatanorigtht wrote: post #37

Earlier quoted context omitted.

Sure thing. The rise in bitcoins price certainly has nothing to do with the actions of central bankers. Have fun staying poor. Never leave your hackernews echo chamber.

You have a valid point, but so do the other commenters. The difference is with you it dangerously verges on religion. Everyone is betting on an outcome but no one knows the future unless they are a fly on wall in various political offices. Imo ignoring everything about crypto, all I know is historically government’s will take drastic measures to protect their currency. Gold ownership was banned for decades in the 20t…

> no one knows the future

If you read history, you have a pretty good idea of what happens to a "market" like tulips or the South Sea Bubble where there is no actual products or cashflow.

Re: Tether Discussion featuring Bennett Tomlin and George Noble

#120

Post by TomSwirly »

janandonly wrote: post #29

There are a few issues at play here: 1. A lot of newly 'minted' Tether's are being used to buy Bitcoin (so prop it up, the Bitcoin price rises). 2. Possibly as a next step, these now more valuable bitcoins are than sold for real money, and the owners of bitfinex/tether pocket this real earned money as profit. 3. It should be noted that although the total amount of tether is still rising, the total amount of all "stab…

> There are a lot of unbanked people in the world, more than we in our western minds would dare to guess, I think.

I'll bet you haven't travelled in the developing world either.

I have.

I met tons of unbanked people, nearly all because they don't have any money. And the ones that do aren't going to invest it in "some app on their phone".

> the number of people that now have "wallet" software running on their phone

And what is the median balance on those wallets?

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