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Anyone Seen Tether’s Billions?

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Re: Anyone Seen Tether’s Billions?

#171

Post by fleddr »

BLKNSLVR wrote: post #79
fleddr wrote: post #69

Earlier quoted context omitted.

I'd prefer society puts more energy into a more balanced, sane and stable economy and financial system. To address the actual disease rather than the symptoms. But I'll leave it at that.

Well said right the way through. The other thing cryptocurrencies potentially offer is an alternative financial system to the status quo. There are lots of bugs to be worked out, but it's well on its way, and Solana and Ethereum (as only two examples of many) have the ability to act as the platform upon which these financial services can be built.

Crypto has the potential to break down any middle man and gate keeper. The very middle man this community bashes on a daily basis (Big Tech and all).

It's an odd contradiction, but I'm used to it.

Re: Anyone Seen Tether’s Billions?

#172

Post by BLKNSLVR »

acdha wrote: post #141
cinntaile wrote: post #76

Earlier quoted context omitted.

Any economic activity is basically actively destroying the environment though. The big difference is that there are a few supply chain steps that get bypassed before value is created. I know I know, someone will take issue with that and say that no value is created with crypto when a coin gets minted and the rewards are distributed while value is created along each supply chain step when you manufacture a car. But if…

Who outside of the cryptocurrency industry would notice if they disappeared? Who outside of the automotive industry would notice if cars disappeared? That's your answer: pollution is still a concern but only one of those is balanced against significant real-world benefits for people other than the sellers.

The automotive industry is 100+ years old whilst Bitcoin is only 13 years old, so you can't fairly compare them on the basis of "who would notice".

My previous skepticism of Bitcoin and cryptocurrency was due to short-sightedness. You almost have to dip your toes in, in order to understand its potential.

Re: Anyone Seen Tether’s Billions?

#173

Post by qeternity »

SilasX wrote: post #170
qeternity wrote: post #159

Earlier quoted context omitted.

> If that's what you meant, then it's coming from the same dubious mental model I complained about above It’s not, because I’m saying something different than you think I am. > when you enter into a liquidity pool, you are providing liquidity to the entire cryptocurrency's network, not just people who are "on" that DEX (which isn't a coherent concept). Um, what?!? I’m really not sure you understand how this works. Wh…

>>LPs are not something you have to "be in"; >Uh, if you’re not in it, then you’re not providing liquidity. Why did you cut off the rest of that sentence, which clarifies that I was referring to traders not having to be in an LP to accept an offer (sorry, "remove liquidity")? People who really have some deep, coherent insight don't have to resort to that. Furthermore, the point was that, even though you provide liqui…

Alright, last attempt. I never said anything about other traders being in the same liquidity pool or whatever you think I said. Let me spell it out.

Let’s say I want to be a market maker on Binance, in both BTC/USD and ETH/USD. Let’s say that I have a strategy where I can provide $5m in liquidity to each of those markets (i.e. $5m of orders for other traders to aggress) for a total of $10m of liquidity. But because most of the time those orders are just resting unexecuted, it turns out I actually only need $1m in capital to run my market making algos.

In the DEX example, if I want to provide $5m liquidity to a BTC/USDT LP and $5m to an ETH/USDT LP, I need $10m to do this.

So to run my $10m liquidity provider on a CEX I only need $1m whereas in order for an AMM to provide $10m in liquidity, it needs $10m in capital.

Re: Anyone Seen Tether’s Billions?

#174

Post by usrusr »

jcranmer wrote: post #168
jkhdigital wrote: post #156

Earlier quoted context omitted.

It’s called leverage. Every player in the financial system uses it; some have cut deals with the government to socialize catastrophic losses so we pretend the leverage doesn’t exist but there it is. As long as Coinbase allows on-demand redemptions nobody is going to care about an audit because it’s trivially easy to just convert all your USDC to real dollars almost immediately. Can’t say the same for Tether.

> As long as Coinbase allows on-demand redemptions nobody is going to care about an audit because it’s trivially easy to just convert all your USDC to real dollars almost immediately. And what happens if Coinbase were unable to convert all the USDC because the demand exceeded their stockpile of USD?

Likely some very accidental network misconfigurion, we apologize for the inconvenience?

Re: Anyone Seen Tether’s Billions?

#175

Post by altrus »

qeternity wrote: post #85
shawabawa3 wrote: post #36

Earlier quoted context omitted.

It's trivially easy for anyone to short tether, simply take out a DeFi loan of tether backed by any other crypto collateral (including e.g. USDC so you don't have liquidation risk). It will just cost you a few % APR to keep the position open

Absolutely do not do this. Do not bet against the house inside casino walls. If you have enough capital to weather potential dislocations, the only real way to play this is to be long off shore (perps, probably) and short CME. This position is long BTC/USDT vs short BTC/USD, the net of which is short USDT/USD. The reason for doing it this way is if it doesn’t play out, or goes to 100k first, you’re just wearing a bit…

I don't entirely understand this; could you provide a concrete example, or actual trades, that could be involved in such a position? (I'm just curious how it would actually look like in practice.)

Re: Anyone Seen Tether’s Billions?

#176

Post by fleddr »

Imnimo wrote: post #110
fleddr wrote: post #63

Earlier quoted context omitted.

If you've already made up your mind that crypto is a scam and gambling only, despite it being an enormous space, there's no point in asking. https://solana.com/ecosystem The above shows the 400 or so things built on top of solano. I would expect for most projects to not be very useful to the masses and likely most will fail. Which isn't different at all to the typical startup scene. I consider most of it garbage, and…

>They can decide to sell 10 copies, and dictate that if they are resold, the photographer gets a 20% royalty. Suppose that I want to sell my copy, but do not want to pay the 20% royalty. What stops me from selling it for 1 cent on-chain, but buyer paying me real price off-chain? How can a creator realistically expect to receive their royalty cut?

It's an interesting loop hole. That can actually be solved with a smart contract that wouldn't allow you to sell below the purchase price, or at least not that far below it.

Anything can be programmed in a smart contract, and they're transparent, so if the royalty rules are not acceptable to you, don't buy it.

Re: Anyone Seen Tether’s Billions?

#177

Post by [deleted] »

qeternity wrote: post #85
shawabawa3 wrote: post #36

Earlier quoted context omitted.

It's trivially easy for anyone to short tether, simply take out a DeFi loan of tether backed by any other crypto collateral (including e.g. USDC so you don't have liquidation risk). It will just cost you a few % APR to keep the position open

Absolutely do not do this. Do not bet against the house inside casino walls. If you have enough capital to weather potential dislocations, the only real way to play this is to be long off shore (perps, probably) and short CME. This position is long BTC/USDT vs short BTC/USD, the net of which is short USDT/USD. The reason for doing it this way is if it doesn’t play out, or goes to 100k first, you’re just wearing a bit…

[deleted]

Re: Anyone Seen Tether’s Billions?

#178

Post by jazzyjackson »

jcranmer wrote: post #154
jazzyjackson wrote: post #133

Earlier quoted context omitted.

Maybe you can explain this message from the Federal Reserve [0] to me, because I must be misunderstanding. > As announced on March 15, 2020, the Board reduced reserve requirement ratios to zero percent effective March 26, 2020. This action eliminated reserve requirements for all depository institutions. I've been swayed by the MMT videos on youtube which I know are controversial, but it seems to me that when a bank m…

There are several different kinds of requirements that banks have. The "reserve requirement ratio" basically means that for every $1000 the bank has in deposits, it is required to keep $X in its account with a Federal Reserve bank. Very specifically, it has to be money sitting in that account--a literal stack of $20 bills doesn't count for the reserve requirement. This has dropped to 0% because the Federal Reserve fi…

Ah, that is an important distinction I missed, thank you.

Re: Anyone Seen Tether’s Billions?

#179

Post by Vespasian »

jkhdigital wrote: post #145
NelsonMinar wrote: post #72

Earlier quoted context omitted.

Like I said, USDC is not dollars. If you're betting on Tether collapsing you sure as hell aren't going to take payment on that bet in USDC.

…okay, so if I deposit USDC at Coinbase, I can instantly convert the entire balance into USD, and then withdraw that USD to my bank account. The statement that “USDC is not USD” means nothing to anyone who has access to instant and reliable conversion between the two.

How much USD does Coinbase hold at any given moment?

What you are missing is "counterparty" risk in the sense that Coinbases coffers are not infinite and certainly not 100% cash.

In the event of a bank run they would have to say "sorry we can't pay you right now...maybe later...maybe never...nobody knows".

That would effectively kill any trust in USDC and it's value plummets through the floor.

Re: Anyone Seen Tether’s Billions?

#180

Post by Sophistifunk »

Ice_cream_suit wrote: post #120

LOL ! "The chief financial officer is Giancarlo Devasini, a former plastic surgeon from Italy who was once described on Tether’s website as the founder of a successful electronics business. The only reference to him that turned up in a search of Italian newspapers showed he was once fined for selling counterfeit Microsoft software. Elsewhere on the website, there’s a letter from an accounting firm stating that Tether…

Anybody "fined for selling counterfeit Microsoft software" almost certainly ran a whitebox computer shop, and was successful enough to get noticed and charged in a period where almost everybody's home computers ran pirated Windows and you could buy it on any street corner. In Italy to boot.
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