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Tether: The Story So Far

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Re: Tether: The Story So Far

#121

Post by api »

djinnandtonic wrote: post #104

I am rapidly developing the opinion that there is no such thing as fintech, just corporate and criminal entities using the slow pace and poor understanding of regulators to skirt laws.

Throw in creative ways to extract fees without them looking like fees and I think you've accounted for most of it.

One of the things I've learned by watching the cryptocurrency saga is that money and finance belong to the class of things you want to be unbelievably boring. Other members of this class include governments, infrastructure, and the legal system. Interesting finance is probably a scam. Interesting infrastructure includes things like ISPs that spy on you or selectively throttle traffic or Pacific Gas and Electric if you happen to live in Northern California right now. Interesting government was a leading cause of death among adults in the early 20th century.

An analogy on a personal scale to interesting finance or interesting government would be an interesting heartbeat. You really don't want to have an interesting heartbeat. It probably means you are dying or having a seizure. You want your pulse to be incredibly boring. Thump, thump, thump...

Re: Tether: The Story So Far

#122

Post by SlowRobotAhead »

>My intense skepticism of cryptocurrencies is probably the issue on which I am most in disagreement with many close friends, professional acquaintances, and some of the smartest people I know. That is part of the reason why the hobby of peeling back onion layers here is so engrossing: people really, passionately believe that there is something here. I’m intellectually curious. The thing people have told me exists should smash my interest buttons: programmable money! How could I not look!?

Excellent way to summarize how I've felt about Bitcoin since the first mention. Thought I was the only one!

Re: Tether: The Story So Far

#123

Post by colinhb »

arkitaip wrote: post #68
ur-whale wrote: post #65

The one thing this very biased article does for me is highlight that there is a very strong market need/demand for an instrument like tether and that the incumbent financial system, much like the music industry discovering the internet, is trying to prevent that to happen by any mean necessary. And they do have way deeper pocket as well as many, many more arms up political puppets to reach that goal.

In what way is the article biased? Why do you think that patio11 is part of the "incumbent financial system"? Do you refute any of the evidence?

I suspect it's because patio11 is employed by a payment processor, Stripe. Stripe's business is taking a percentage of payments / transfers. One of Bitcoin's usecases is making payments / transfers with lower interchange / wire fees than existing financial system. The argument is the same as saying that someone employed by gun manufactures is biased when writing about proposed gun laws.

(I don't have a view on whether patio11's employment has influenced his thinking. I just wanted to suggest what the grandparent's thesis may have been.)

Re: Tether: The Story So Far

#124

Post by kbenson »

lawn wrote: post #84
jcranmer wrote: post #81

Earlier quoted context omitted.

All Venezuela has to do is to make it illegal for anyone to sell you Bitcoin. Effectively, the current situation is rather close to that: the financial system is predicated on Know Your Customer and Anti-Money Laundering regulations that make moving large amounts of money for anonymous purposes dangerous for financial institutions. Given that cryptocurrency has struggled to provide any rationale for its existence oth…

And all the U.S. had to do is make drugs illegal, and it would disappear. (Or not.) > other than the anonymous money flows Are you saying that anonymous money is immoral and should be made illegal, and in the process dismissing all use cases that benefit from anonymity? And no, cryptocurrencies are perfectly legal in most of the world.

> And all the U.S. had to do is make drugs illegal, and it would disappear. (Or not.)

Well, yeah. Making drugs illegal makes them disappear. From legal sources. The illegal sources share a similar set of problems as noted. Am I going to get what I paid for? Will I get all of what I paid for? Will there be repercussions? How safe is this?

The drug market being illegal means that for the vast majority of people it's only worth using for fairly inconsequential things. Recreational drugs for the weekend or the equivalent. You might not want to source your cancer drugs there for the same reasons you might not want to source your car or house loan from some random internet entity. Trust. And dealing in an illegal market makes the higher levels of trust very hard, if not impossible, to achieve.

I think the point is that cryptocurrencies will be relegated to second class currencies for as long as they can't or aren't treated with the same trust a fiat currency is.

Re: Tether: The Story So Far

#125

Post by codewithcheese »

djinnandtonic wrote: post #104

I am rapidly developing the opinion that there is no such thing as fintech, just corporate and criminal entities using the slow pace and poor understanding of regulators to skirt laws.

My bank has gotten much better in the last 10 years trying to keep up appearances. That's due to competition.

Remember people questioning if the internet was ever going to amount to anything in the dotcom bust?

Re: Tether: The Story So Far

#127

Post by colinhb »

> I have looked, quite a bit. I have not found a good use case yet

Agree with a lot of the analysis. But not quite the broader thesis. Analogy I would make is this: the fact that some banks are bad does not imply that fiat currency is bad. The fact that Tether is bad does not imply that Bitcoin is bad.

Bitcoin enables payments / transfers without intermediaries. In the existing financial system, intermediaries take a cut of these transactions. (Aside: patio11's employer, Stripe, has built a business on this.) Figuring out whether by eliminating those intermediaries you can lower transaction costs (no interchange / wire fees controlled by card networks / banks) and effectively eliminate a tax on all economic activity seems like something worth exploring.

Just because it's a bubbly space does not mean there's no there-there. Pets.com didn't make me think the Internet was a dead end.

Re: Tether: The Story So Far

#128

Post by akerl_ »

lacker wrote: post #116
cperciva wrote: post #108

Earlier quoted context omitted.

if you want to exchange Bitcoin into dollars in an all-cryptocurrency transaction What does that even mean? Dollars aren't cryptocurrency. If you're converting to Tethers, you're not converting to Dollars.

I think of it as “one dollar minus some fees”. I would usually rather have one tether than one dollar minus credit card fees. Yeah if you want to use it in the fiat economy you have to exchange it out, but that isn’t too hard.

The whole premise of this article is that Tether is not “one dollar minus some fees”, it’s a mountain made of lies, built on a tectonic plate system made of fraud.

Re: Tether: The Story So Far

#129

Post by lern_too_spel »

colinhb wrote: post #127

> I have looked, quite a bit. I have not found a good use case yet Agree with a lot of the analysis. But not quite the broader thesis. Analogy I would make is this: the fact that some banks are bad does not imply that fiat currency is bad. The fact that Tether is bad does not imply that Bitcoin is bad. Bitcoin enables payments / transfers without intermediaries. In the existing financial system, intermediaries take a…

In Bitcoin, miners are the intermediaries, and they take an even larger cut. You cannot magic away the need to keep a ledger, and keeping a distributed ledger is going to be more costly than keeping a centralized ledger.

Re: Tether: The Story So Far

#130

Post by spurdoman77 »

gamblor956 wrote: post #101
teknopurge wrote: post #99

Earlier quoted context omitted.

Everyone cannot actually withdraw their balance to fiat all at once - this would be a bank run and wouldn't actually be allowed to occur.

True, but you can actually withdraw your balance. You cannot withdraw your Tether balance. They literally do not allow that. The best you can do is get an intermediary coin that some places might let you change into cash or another crypto.

As I understand tether allows direct conversions to fiat, you just need big enough amount. Also it is very easy to convert to bitcoin, which is very easy to convert to fiat.
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