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U.S. Launches Criminal Probe into Bitcoin Price Manipulation

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Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation

#171

Post by ttul »

SilasX wrote: post #145
anonymouz wrote: post #82

Earlier quoted context omitted.

Even worse, they tried to get an audit, but it ended up with them and their auditor ending the process without producing an audit. Apparently they weren't too happy the auditor wanted to actually take a close look: “We confirm that the relationship with Friedman is dissolved. Given the excruciatingly detailed procedures Friedman was undertaking for the relatively simple balance sheet of Tether, it became clear that a…

So wait, am I reading this right? They want to say that their holdings are audited, but want an auditing process that stops at "yes, this bank account as a $X balance" and doesn't include anything about who actually owns the account or what its liabilities are? In fairness, I can kind of understand the bind: it seems that use-case of tethers depends on not being a legally enforceable claim to dollars, specifically so…

For example... let’s say Bitfinex really does have $2.4B (or whatever) in the bank. But they have borrowed $2.3B using the cash as collateral. This is the sort of shenanigans that come out during an audit.

Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation

#173

Post by perl4ever »

Nursie wrote: post #138
perl4ever wrote: post #128

Earlier quoted context omitted.

I thought that what people call a "currency peg" is normally the same as what you are calling "maintained purely by supply manipulation". So I suspect you may be using words in a nonstandard way.

Not here, not the way tether is set up. Its claim is that its peg is concrete and reliable in the way a floating peg is not, because every tether is backed by a real dollar in a bank account, and in theory is redeemable. Take a look at their homepage.

I'm saying that I have the impression that some countries have a currency that is pegged to the dollar, and they maintain dollar reserves, but not one for one. And people do not say that is "floating", but that it is not floating. So it becomes misleading if you start defining a peg as requiring one for one reserves and being "floating" otherwise. There's no downside to using terminology that is clear to other people, unless you are trying to be deceptive.

Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation

#174

Post by Nursie »

paulie_a wrote: post #172
Nursie wrote: post #164

Earlier quoted context omitted.

Well indeed! But that's how it's supposed to work.

Completely fraudulent?

Nobody outside of tether really knows until there's some sort of audit.

But the secrecy, false claims of regular auditing etc. don't look good from here.

Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation

#175

Post by awt »

tptacek wrote: post #155
awt wrote: post #124

Earlier quoted context omitted.

It is indeed a piss-poor store of value for people who have high time preference, but unmatched for those with low time preference.

There is no insane investment you can't say that about. Those metallic-cover special issue Marvel X-Men comics they used to "limited collector release" in the early 90s will eventually be of enormous value to archaeologists in the future, too.

Although this is a true statement it is not persuasive in that Bitcoin (unlike a special issue comic, or any other rare thing) has specific, meaningful properties (fungibility, divisibility, durability, etc.) that interact with the world according to well known principles (Gresham's Law, Lindy Effect, Theory of Computation, Network Effect, etc.) that must be shown not to apply in order to disqualify it as the best available store of value.

Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation

#176

Post by tptacek »

awt wrote: post #175
tptacek wrote: post #155

Earlier quoted context omitted.

There is no insane investment you can't say that about. Those metallic-cover special issue Marvel X-Men comics they used to "limited collector release" in the early 90s will eventually be of enormous value to archaeologists in the future, too.

Although this is a true statement it is not persuasive in that Bitcoin (unlike a special issue comic, or any other rare thing) has specific, meaningful properties (fungibility, divisibility, durability, etc.) that interact with the world according to well known principles (Gresham's Law, Lindy Effect, Theory of Computation, Network Effect, etc.) that must be shown not to apply in order to disqualify it as the best av…

https://tinyurl.com/Special-Pleading

Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation

#177

Post by anonymouz »

Nursie wrote: post #138
perl4ever wrote: post #128

Earlier quoted context omitted.

I thought that what people call a "currency peg" is normally the same as what you are calling "maintained purely by supply manipulation". So I suspect you may be using words in a nonstandard way.

Not here, not the way tether is set up. Its claim is that its peg is concrete and reliable in the way a floating peg is not, because every tether is backed by a real dollar in a bank account, and in theory is redeemable. Take a look at their homepage.

I don't understand why you are getting downvoted, because this is indeed what Tether claims. From their homepage

"100% Backed

Every tether is always backed 1-to-1, by traditional currency held in our reserves. So 1 USD₮ is always equivalent to 1 USD."

Whether Tether's claim is actually true is at best unclear, of course.

Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation

#178

Post by Nursie »

perl4ever wrote: post #173
Nursie wrote: post #138

Earlier quoted context omitted.

Not here, not the way tether is set up. Its claim is that its peg is concrete and reliable in the way a floating peg is not, because every tether is backed by a real dollar in a bank account, and in theory is redeemable. Take a look at their homepage.

I'm saying that I have the impression that some countries have a currency that is pegged to the dollar, and they maintain dollar reserves, but not one for one. And people do not say that is "floating", but that it is not floating. So it becomes misleading if you start defining a peg as requiring one for one reserves and being "floating" otherwise. There's no downside to using terminology that is clear to other people…

I'm not making these claims you seem to think I am.

I am 100%, absolutely, positively not saying 1:1 backing is required for a currency peg.

I am saying that in the case of tether, that is the explicit claim they are making about their cryptocurrency. They are claiming that each and every one is backed by a dollar in their account. This is their value proposition, this is what you are buying when you buy tether. An open, audited, 1:1 backed US dollar token * .

Please go and read their homepage if you have some sort of issue with this, it's right there at https://tether.to/

The idea is very much that you can park money in tether and it's not vulnerable to a run on the currency and it cannot drop below a dollar, because each one has a corresponding dollar in an account.

(* unfortunately they are not very open and have never been audited)

Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation

#179

Post by awt »

tptacek wrote: post #176
awt wrote: post #175

Earlier quoted context omitted.

Although this is a true statement it is not persuasive in that Bitcoin (unlike a special issue comic, or any other rare thing) has specific, meaningful properties (fungibility, divisibility, durability, etc.) that interact with the world according to well known principles (Gresham's Law, Lindy Effect, Theory of Computation, Network Effect, etc.) that must be shown not to apply in order to disqualify it as the best av…

https://tinyurl.com/Special-Pleading

What principle is not being universally applied? Or do I misunderstand?

Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation

#180

Post by cjbprime »

tomjakubowski wrote: post #127
DINKDINK wrote: post #87

Earlier quoted context omitted.

If there was a problem redeeming Tether for USD, you'd expect that the market price distortion of Tether. But it hasn't[1] https://www.tradingview.com/chart/?symbol=POLONIEX:USDTUSD >they've created 2.8 BILLION USDT Absolute numbers are meaningless and less eye catching when they're compared to the entire market. 2.8 ~ ~ Billion ~ ~ USDT is only 0.5%-0.8% of the market. Do you really think that a 300-500 billion doll…

> What can be said about Tether: it's a trusted third party that's vulnerable to fractional reserve What? Isn't the entire friggin point of Tether that it's _not_ a fractional reserve system? From their own FAQ (emphasis mine): > All tethers are pegged at one-to-one with matching fiat currency (e.g., 1 USD₮ = 1 USD) and are backed 100% by actual assets in our reserve account. https://tether.to/faqs/

Their FAQ also promises to have audits of their USD reserves, which as I understand it they've since reneged on.
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