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Tether Critical Announcement

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Re: Tether Critical Announcement

#121

Post by csomar »

patio11 wrote: post #4

If you haven't been following along, here's why this matters: Tethers is a sole-source cryptocurrency, pegged to the US dollar. Bitfinex produces it, though they're cagey (some would say outright lying at times) about the level of involvement. The primary purpose of tethers is money laundering, even more so than cryptocurrency generally. Bitfinex was cut off from the US financial system, which makes it impossible for…

Patrick, I thought you are better than making these "non-proved" claims. I can make claims about Bitstamp or Gdax too. Their order book has increased 10-15 times in value since bitcoin price was in the 1000-1200 range too.

Tether certainly has a connection to Finex but they are not its biggest client. Tether is being used by crypto-only exchanges mainly Bittrex and Poloniex to give people the possibility to trade coin/usd.

A possible explanation of Tether growth is simply that: Polo and Bittrex started using them. Is that shady and tries to avoid regulation by placing a crypto sign over a real dollar? Yes.

> If you don't believe Bitfinex's $600 million in liabilities are worth a copper shilling, the only option for getting your value out of Bitfinex is to swap your liability for Bitcoin, which drives up the price of Bitcoin at the margin.

Except that the price of bitcoin in finex has been lower than other exchanges in the last few weeks and only slightly higher now.

Re: Tether Critical Announcement

#122

Post by krisives »

ActsJuvenile wrote: post #105
dangero wrote: post #83

I released a paper earlier this year talking about how we can reasonably lock cryptocurrency to fiat, but unfortunately the space is still rather immature. A single provider of USD tokens is extremely dangerous. Best case scenario would be if there were many companies like Tether and you could spread your token purchases between them automatically to minimize counterparty risk. Stellar and Ripple are closest to solvi…

Ripple is a scam and Jed McCaleb has been dumping thousands of Ripples a day since forever. You shouldn't encourage new users to buy Ripples.

Ripple is a scam it also predates Bitcoin entire thing was a sever to server bank basically

Re: Tether Critical Announcement

#123

Post by cloakandswagger »

jack_pp wrote: post #112
jerkstate wrote: post #96

Earlier quoted context omitted.

that's about 0.6% of the market cap of bitcoin

"market cap" is a very bad representation of the overall value which is impossible to actually estimate. try selling 600 million worth of btc and see how that cap changes.

Dump large amounts of ANY asset and it will crash. It's only crypto that gets accused of having a "fake" market cap though.

Re: Tether Critical Announcement

#124

Post by ThrustVectoring »

panarky wrote: post #65
cperciva wrote: post #29

Earlier quoted context omitted.

Post-script: Is this good news for Bitcoin? Oh this is great news for Bitcoin. If you don't believe Bitfinex's $600 million in liabilities are worth a copper shilling, the only option for getting your value out of Bitfinex is to swap your liability for Bitcoin, which drives up the price of Bitcoin at the margin. Correct me if I'm wrong here, but this seems to be an argument for BTC/USD going up on Bitfinex -- but not…

Oh this is great news for Bitcoin If the price of Bitcoin has been inflated by 600 million USD that doesn't really exist, then when this unwinds it will be bad news for Bitcoin.

Depends on the way it unwinds. If it's through selling BTC to cover Tether redemptions, sure, that'd be bad for cryptocurrency prices. I have a feeling that it'll unwind like Mt. Gox, though - people who accepted Tethers or put deposits into Bitfinex wind up holding the bag when the fake money goes "poof".

Re: Tether Critical Announcement

#125

Post by hvk »

foxhop wrote: post #68

The abstractions and tech which cryptocurrency works on is fragile in most of the same ways as the layers that came before it (credit cards/banks/etc). Try to look at all this holistically. How many people and resources do we dedicate on this planet to keep track of money, economy, mine the coins, cash the checks, swipe the cards, keep the lines working? All of these abstractions make trade faster and more liquid but…

Without making a comment on the crypto/tether aspect, I just want to express that it seems to me that the "cause of keeping track of 'who owns what'", as you put it, is precisely the singular technological achievement which has enabled the "human condition" to evolve to its current state. Money is literally the decentralized, asynchronous, dynamic, and continuous computation that has evolved to process the combinatorial coordination of signals/information on resources between 7+ billion unfathomably complex and independent agents. To me, the staggering thing wouldn't be that "70% of our resources and jobs are dedicated to this nonsense", but rather that the technology known as money is so incredibly efficient that it leaves 30% surplus (in this example) for society to further grow.

Re: Tether Critical Announcement

#126

Post by askmike »

darawk wrote: post #103
askmike wrote: post #94

Earlier quoted context omitted.

Just because tether predates the big USD wire problems does not mean it's creation was unrelated. One of the biggest risk any exchange has is compliance, specifically with the US regulators (and banks). Even if BFX did not know this before they build their exchange, this most likely became clear from day 1. Tether is a great hedge against this (politics aside). Could you address anything that you think is "factually…

The post I was responding to claimed Tether was specifically created to address Bitfinex's wire issues. That is false. It may be that they created it to address theoretical, speculative wire issues that they might someday encounter in the future, but there is no evidence to support that hypothesis. Secondly, there is plenty of reason to create something like Tether independently of any wire issues (specifically: to n…

Come on man..

> The post I was responding to claimed Tether was specifically created to address Bitfinex's wire issues. That is false.

It does not claim that it was "specifically created for that", it claims that "Their solution" to the wire problems was "Tether". It does not state anything about why Tether was created in the first place.

> Secondly, there is plenty of reason to create something like Tether independently of any wire issues (specifically: to normalize prices between exchanges).

People will arb the effiencies away anyway, regardless of what tools the exchanges provide them. Besides tether a lot of people in Taiwan are arbing through the traditional banking system [0].

But you are right, it IS important that there are ways to flow money in and out. Which is exactly what Tether is for according to OP's argument.

[0] https://steemit.com/bitcoin/@kingscrown/living-in-thaiwan-yo...

Re: Tether Critical Announcement

#127

Post by repomies691 »

darawk wrote: post #80
patio11 wrote: post #4

If you haven't been following along, here's why this matters: Tethers is a sole-source cryptocurrency, pegged to the US dollar. Bitfinex produces it, though they're cagey (some would say outright lying at times) about the level of involvement. The primary purpose of tethers is money laundering, even more so than cryptocurrency generally. Bitfinex was cut off from the US financial system, which makes it impossible for…

...except that Tether long predates Bitfinex's wire issues. They're usable on many of the major exchanges (Bittrex, Poloniex, for example). Tether was explicitly created for the purpose of equalizing prices across exchanges. It's indeed possible that they're insolvent, but there is no real evidence of that, just lots of people speculating incessantly without much justification. Basically everything about the parent c…

> Basically everything about the parent comment is factually incorrect. I'm not sure why it's so upvoted.

patio11 is well respected in this community, so I guess the post is upvoted just because of the author. I personally respect patio11 on quite many topics as a very knowledgeable, but when it comes to Bitcoin and cryptocurrencies he seems to have some personal issue with them, which makes his posts on the topic not that objective.

Re: Tether Critical Announcement

#128

Post by ActsJuvenile »

darawk wrote: post #118
ActsJuvenile wrote: post #116

Earlier quoted context omitted.

They just got hacked for $30 mil. Pretty safe to say they are in the red at this time.

They may not be. $30 mil is a small percentage though. Bitfinex makes a few million per day in volume. It's not unreasonable to think they might still be solvent, even with a 30 million dollar loss. But they also might not. However, they definitely won't be if their fix to block the stolen Tethers goes through.

Bitfinex got hacked for 119,756 BTC last year, and Tether got hacked for $30 mil today.

Both are owned by iFinex LTD, and had the same CEO till earlier this year. Total amount they have lost comes out to $1 Billion.

How are you still claiming "They may not be"?

Re: Tether Critical Announcement

#130

Post by askmike »

dlp211 wrote: post #114
askmike wrote: post #72

Earlier quoted context omitted.

After the fall of mt. gox there was a huge push to get exchanges to do this. My guess is that the costs of doing this (security is quite hard: anything that can sign messages using cold storage keys can obviously also empty the cold storage, since transactions are simply signed messages) does not outweigh the demand for this. Most traders don't care (and subsequently get burned). > And the transparent bank would publ…

There is no such thing as "too much information about a market".

Anyone with a lot of AUM looking to invest would beg to differ - or well, they might use the information while trading on a different exchange.

Also draws a nice crosshair on your exchange, so that hackers can exactly calculate cost/benefits as well as learn from your systems (how you divide your cold storage over different addresses, how that changes over time, how money from different dummy accounts effects cold storage in what way).

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