221–230 of 345 posts
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Worked great in 2008.
It's like people assume the current financial system is perfect and bitcoin is not. Bitcoin never pretended to be, it's still an experiment 10 years in, but its a fun expierment.
(Some hyperbole engaged above)
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> They're literally making up money as they see fit. I'm playing devil's advocate here (I agree that the whole Tether situation is concerning), but also genuinely curious - is this any different than what banks have been doing for forever with fractional reserve? Even if Bitfinex is overcommitted and there's more USDT in circulation than they have in USD reserves, is there a problem unless a lot of people try to conv…
To answer your direct question, Tether is sold as a fully-backed instrument, so there's major (potentially billions of dollars of) fraud if it's not fully backed. That's an issue because consumers aren't getting what they paid for, i.e. the underlying risk profile is different from what they thought the were buying. The big difference with Tether is that in traditional banking, fractional reserves are legal, and regu…
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You just have to look at what happened after the MtGox collapse in 2014: Bitcoin goes back to sleep for 2 or 3 years, afterwards everyone forgets it ever happened and another rally takes place where cryptocurrencies "go mainstream". Lather, rinse and repeat until the amount of people willing to speculate on it is completely exhausted.
I don't personally think it will be that cyclic. There is so much more invested this time around, so many more people standing to lose so much more money, such a brighter light on the cryptocurrency world now. A devastating loss (e.g. Bitfinex shuts down and freezes all transfers, Tether worthless, that type of thing) to the BTC economy would be critical to the entire future of cryptocurrency as we know it, IMO. I do…
Also, with Bitcoin becoming 'established' I bet everyone who owns more than $1M in cash is considering Bitcoin as a method of alternate banking and transferring funds internationally.
Bitcoin certainly isn't the safest place to store your money, but there is a decent argument to be made that it can be safer to keep 90% cash and 10% btc instead of just 100% cash for some risk profiles. Criminality is one obvious use case, but people who want a plan for how they could flee their country in the case of disaster, financial meltdown, or social unrest would also see advantages: much easier to get a $100k private key through an airport and customs than the equivalent in physical cash.
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What is the value of anything, really? The value of a metal brick, or a shiny stone, far exceeds any practical utility of the physical object itself. Even the value of a "real" currency is based, in broad strokes, on what you can exchange it for.
Water is immensely valuable. It has an intrinsic value to human life. Land to grow crops for food is also valuable for the same reason. Construction materials to build shelter/homes are definitely valuable. Some metals and minerals are important to our technology driven society. You need these raw materials to build your technological infrastructure. Bitcoin? I don't see it ...
The value of bitcoin is its decentralisation. As long as there are people running nodes, the network is alive, regardless of what any government or entity in the planet thinks. Being global also means it’s used by people who do not have a stable money store (countries with unstable currencies), and for transfers between borders that would otherwise be impossible.
The somewhat ironic part is that one of the core concepts of Bitcoin is that you can't counterfeit it. You can mathematically prove how many coins you own, if somebody sends you 3 BTC then once it's been validated on the blockchain you know that the money is now yours, they can't have lied, it can't bounce like a cheque Except this Bitfinex thing shows that while an amount of bitcoin can't be manipulated or counterfe…
Is there a difference?
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Finally created an account to reply to this. There is a great thread on Reddit called - Where has all the world's money gone, explain it like I'm 5. It starts from a convenient barter system. As I was reflecting on the various ICOs I realised that the technology and the blockchain makes the old barter system very efficient. So I do believe that in fact it is a substitute for that behaviour. In fact Im convinced that…
>Where has all the world's money gone, explain it like I'm 5. It starts from a convenient barter system. As I was reflecting on the various ICOs I realised that the technology and the blockchain makes the old barter system very efficient. There was no "old barter system" the way modern people think of it. The idea that pre-commercial economies operated on a "barter system" in the sense that people are directly exchan…
So at the dawn of agriculture, people weren't using barter -- they were using credit unions.
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The most interesting thought to me right now is how the situation will develop if or bitfinex/tether crashes the market hard. I am not a fan of the SEC getting involved. Taking crypto as an experiment, I think it is better for the market to take a hit and then find organic solutions. If the SEC gets involved and busts bitfinex/tether, the community loses the opportunity to become 'unbailable'. Yes , people will lose…
It’s an experiment that is repeated time and time again, and people refuse to learn. Without the disincentive of prison and financial ruin, people will always find ways to use leverage and information asymmetry to defraud the public. Always. HN is often very innocent and naive about people and their motivations. Unfortunately, there are assholes in this world, and the law is what protects us from them.
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To answer your direct question, Tether is sold as a fully-backed instrument, so there's major (potentially billions of dollars of) fraud if it's not fully backed. That's an issue because consumers aren't getting what they paid for, i.e. the underlying risk profile is different from what they thought the were buying. The big difference with Tether is that in traditional banking, fractional reserves are legal, and regu…
So if Tether was FDIC backed, then you’d technically be OK with this situation?
Issue here is that there is no one giving confidence that Bitfenix has any currency at all, we have to trust their word.
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>Where has all the world's money gone, explain it like I'm 5. It starts from a convenient barter system. As I was reflecting on the various ICOs I realised that the technology and the blockchain makes the old barter system very efficient. There was no "old barter system" the way modern people think of it. The idea that pre-commercial economies operated on a "barter system" in the sense that people are directly exchan…
One of the leading theories about the invention of written numbers and arithmetic is to handle accounting for debts that would last longer than a few weeks or involve many people -- that is, as a supplement to memory for the purpose of credit/debt. So at the dawn of agriculture, people weren't using barter -- they were using credit unions.
Literally chisel some hash-marks into a rock so people don't "forget" and problem solved.