Tether Required Recapitalization in May 2022 • Hacker News Board

Re: Tether Required Recapitalization in May 2022

#151

Post by secondcoming » Fri, May 20, 2022, 5:57 PM UTC

zionic wrote: post #122

JumpCrisscross wrote: post #50

Earlier quoted context omitted.

> whether Tether is fully collateralized ultimately doesn't matter. As long as there are well-capitalized parties (Bitfinex, other exchanges) that want to prop up Tether, it will be fine This is true for every pile of toxic crap that's ever been financially engineered. The problem is the entangled financial health of the backer (in this case, Bitfinex and other crypto exchanges) with the backee (Tether). If creditors…

>This is true for every pile of toxic crap that's ever been financially engineered. I have a radical idea that I'm fairly sure would get me killed if I ever stood a chance of implementing it: A complete ban on all non-productive financial schemes. We have an entire parasite class that grown unfathomably wealthy while providing no real value to the rest of society. The "futures trader" extracting value from the system…

> We have an entire parasite class that grown unfathomably wealthy while providing no real value to the rest of society.

Measuring people by how much 'value' they bring to society is a real slippery slope, my friend

Re: Tether Required Recapitalization in May 2022

#152

Post by steveBK123 » Fri, May 20, 2022, 5:57 PM UTC

JumpCrisscross wrote: post #50

axg11 wrote: post #12

The most important point in this article is that whether Tether is fully collateralized ultimately doesn't matter. As long as there are well-capitalized parties (Bitfinex, other exchanges) that want to prop up Tether, it will be fine. Nobody should be under the illusion that Tether is decentralized or anything other than a bet on Bitfinex.

> whether Tether is fully collateralized ultimately doesn't matter. As long as there are well-capitalized parties (Bitfinex, other exchanges) that want to prop up Tether, it will be fine This is true for every pile of toxic crap that's ever been financially engineered. The problem is the entangled financial health of the backer (in this case, Bitfinex and other crypto exchanges) with the backee (Tether). If creditors…

“Holding Tether is putting money into a 19th century free bank, except instead of interest you get to stick a finger to the Man.”

LOL yes I am assuming some sarcasm here. Sticking ones finger up to the man by.. holding cash equivalents in forms not eligible for FDIC insurance, yes!!

Re: Tether Required Recapitalization in May 2022

#153

Post by davidgay » Fri, May 20, 2022, 5:57 PM UTC

nradov wrote: post #103

lkrubner wrote: post #83

Earlier quoted context omitted.

The "exorbitant privilege" usually belongs to a government with a vast military, and/or substantial colonial possessions -- something that allows force to be used in an emergency. There is a reason why the US dollar, but not the Swiss franc, is an international reserve currency.

The UK Pound is still considered an international reserve currency by virtue of being incorporated into IMF special drawing rights, even though the UK no longer really has a vast military or substantial colonial possessions.

> ... even though the UK no longer really has a vast military

https://worldpopulationreview.com/country-rankings/military-...

At #5 world-wide by expenditure this may be a bit over-stated. Or else "vast military" is just a standin for "US or China".

Re: Tether Required Recapitalization in May 2022

#154

Post by [deleted] » Fri, May 20, 2022, 5:58 PM UTC

kirse wrote: post #30

axg11 wrote: post #12

The most important point in this article is that whether Tether is fully collateralized ultimately doesn't matter. As long as there are well-capitalized parties (Bitfinex, other exchanges) that want to prop up Tether, it will be fine. Nobody should be under the illusion that Tether is decentralized or anything other than a bet on Bitfinex.

As long as there are well-capitalized parties that want to prop up Tether That's been my personal conclusion as well but it led me to the next question of what # is the breaking point for these well-capitalized parties? I tried looking at the size of other well-known collapses like Enron, LTCM, Lehman Bros, etc. LB reportedly had $700B in assets and liabilities before the underlying asset devaluation precipitated the…

[deleted]

Re: Tether Required Recapitalization in May 2022

#155

Post by SilasX » Fri, May 20, 2022, 5:58 PM UTC

zionic wrote: post #124

patio11 wrote: post #24

Earlier quoted context omitted.

It's remarkable that a stablecoin which was able to mostly maintain the peg for years at a time now needs to redefine what being pegged means, and that this state of affairs has continued for more than a week. That's why I mentioned it.

On the other hand DAI fluctuates between 0.999 and 1.001 all the time. Is it not "stable". I am no fan of tether, but small fluctuations like this have always been normal for "stable coins".

That’s the point. Dai goes below and above $1. Tether has stuck below $1. That’s an important difference.

Longer comment: https://news.ycombinator.com/item?id=31449400

Re: Tether Required Recapitalization in May 2022

#156

Post by steveBK123 » Fri, May 20, 2022, 6:00 PM UTC

zionic wrote: post #122

JumpCrisscross wrote: post #50

Earlier quoted context omitted.

> whether Tether is fully collateralized ultimately doesn't matter. As long as there are well-capitalized parties (Bitfinex, other exchanges) that want to prop up Tether, it will be fine This is true for every pile of toxic crap that's ever been financially engineered. The problem is the entangled financial health of the backer (in this case, Bitfinex and other crypto exchanges) with the backee (Tether). If creditors…

>This is true for every pile of toxic crap that's ever been financially engineered. I have a radical idea that I'm fairly sure would get me killed if I ever stood a chance of implementing it: A complete ban on all non-productive financial schemes. We have an entire parasite class that grown unfathomably wealthy while providing no real value to the rest of society. The "futures trader" extracting value from the system…

I propose a ban on all non-productive trips by car. Only good people should be allowed to emit carbon unless for productive reasons that pass the carbon threshhold for the amount of carbon the trips will emit.

Good people as defined by a social credit system. I will decide what is a productive reason & what is the carbon threshhold!

People totally have the option of living under this type of government - it exists in top down centralized places like China.

Re: Tether Required Recapitalization in May 2022

#157

Post by stickfigure » Fri, May 20, 2022, 6:00 PM UTC

ceejayoz wrote: post #89

gringoDan wrote: post #74

Earlier quoted context omitted.

USDC is legit: https://www.centre.io/usdc-transparency

Tether has attestations, too. They're not audits; Tether got caught moving money in right before an attestation check, and moving it out right after. https://ag.ny.gov/press-release/2021/attorney-general-james-... > In the face of persistent questions about whether the company actually held sufficient funds, Tether published a self-proclaimed ‘verification’ of its cash reserves, in 2017, that it characterized as “a g…

The difference is that USDC is run by a US-based public corporation and its managers are US citizens that live in the US. If USDC is a fraud (or even just materially misrepresented), they go to jail.

Is that a guarantee? No, but I don't understand why anyone would use USDT instead of USDC.

[edit: s/UST/USDT]

Re: Tether Required Recapitalization in May 2022

#158

Post by jandrese » Fri, May 20, 2022, 6:01 PM UTC

dasudasu wrote: post #147

zionic wrote: post #122

Earlier quoted context omitted.

>This is true for every pile of toxic crap that's ever been financially engineered. I have a radical idea that I'm fairly sure would get me killed if I ever stood a chance of implementing it: A complete ban on all non-productive financial schemes. We have an entire parasite class that grown unfathomably wealthy while providing no real value to the rest of society. The "futures trader" extracting value from the system…

There is a counterparty to every financial transaction. Presumably, both sides are happy if they agree to trade with each other. All of what you call "unproductive financial schemes" are mostly about exchanging risks, just like insurance.

Casino gambling is a form of "exchanging risk".

Re: Tether Required Recapitalization in May 2022

#159

Post by ClumsyPilot » Fri, May 20, 2022, 6:02 PM UTC

JumpCrisscross wrote: post #50

axg11 wrote: post #12

The most important point in this article is that whether Tether is fully collateralized ultimately doesn't matter. As long as there are well-capitalized parties (Bitfinex, other exchanges) that want to prop up Tether, it will be fine. Nobody should be under the illusion that Tether is decentralized or anything other than a bet on Bitfinex.

> whether Tether is fully collateralized ultimately doesn't matter. As long as there are well-capitalized parties (Bitfinex, other exchanges) that want to prop up Tether, it will be fine This is true for every pile of toxic crap that's ever been financially engineered. The problem is the entangled financial health of the backer (in this case, Bitfinex and other crypto exchanges) with the backee (Tether). If creditors…

> Holding Tether is putting money into a 19th century free bank, except instead of interest you get to stick a finger to the Man.

But tether only works if backed by well-capitalised entities, i.e. the Man, so you are sticking what?

Re: Tether Required Recapitalization in May 2022

#160

Post by yxhuvud » Fri, May 20, 2022, 6:02 PM UTC

JumpCrisscross wrote: post #50

axg11 wrote: post #12

The most important point in this article is that whether Tether is fully collateralized ultimately doesn't matter. As long as there are well-capitalized parties (Bitfinex, other exchanges) that want to prop up Tether, it will be fine. Nobody should be under the illusion that Tether is decentralized or anything other than a bet on Bitfinex.

> whether Tether is fully collateralized ultimately doesn't matter. As long as there are well-capitalized parties (Bitfinex, other exchanges) that want to prop up Tether, it will be fine This is true for every pile of toxic crap that's ever been financially engineered. The problem is the entangled financial health of the backer (in this case, Bitfinex and other crypto exchanges) with the backee (Tether). If creditors…

Or potentially like putting money into British Pounds or Swedish Crowns in early nineties - just waiting for someone with a bigger wallet to come around and break the capitalization by shorting.