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The Bit Short: Inside Crypto’s Doomsday Machine

crypto-anonymous-2021.medium.com

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Re: The Bit Short: Inside Crypto’s Doomsday Machine

#221

Post by TomSwirly »

dannyw wrote: post #24
comboy wrote: post #6

I don't get it. tether sucks. If you hold tether it may turn into air. But your bitcoin is still bitcoin. Also, when tether is going down wouldn't you want to sell it thus creating pressure in btc/tether market and value of of tether/btc going up? It's always been clear to me that USD/BTC and USDT/BTC are two different markets. USDT is just another cryptocurrency. Many of them were scams and disappeared and many more…

Tether is lovely for many people, because there are many entry points without AML/KYC. This allows you to trade while minimising your exposure to the taxman, something that many people in crypto value. Of course, there is the calculated risk of Tether being seized, but that's part of doing business. Bitcoin itself was born out of active rebellion with the existing financial system, and depending on who you ask, rebel…

If you don't pay taxes, you're cheating the rest of us.

We in the west have extremely luxurious societies but this isn't cheap. When a few rich people cheat on their taxes, a large number of poor people suffer.

Not paying your taxes is theft from the rest of us.

Re: The Bit Short: Inside Crypto’s Doomsday Machine

#222

Post by azeirah »

Erlich_Bachman wrote: post #100
PaulAJ wrote: post #97

Earlier quoted context omitted.

Well, if I understand the OP correctly, it sounds like tethers are basically being printed and sold cheap in return for real money, so lots of people think they have a profit because they have more tethers than the dollars they started with. So if you can get in to that situation and then quickly sell the tethers before the whole thing collapses then you should be in the money. OTOH if that isn't possible then the al…

> sold cheap Where? Find a place that consistently sells tether cheap. If anything, the lack of this place is a sign of poor research base for the original article. They mention that some exchanges give tether "prises" sometimes, on some occasions, to a select number of users. I don't see how that is so bad, and neither do I see how you could consistently profit from that. Those incentives are likely to be once per u…

Good point, for those tethers to have that big an influence on the market, they need to get into the hands of real people buying tether with real money somehow.

According to the article it looks like this

1. Person buys btc with usd on coinbase or equivalent

2. Moves btc to shady exchange with tether promotions

Those promotions need to be _huge_ in for those newly minted tethers to get into the hands of real people trading.

I looked at the site with promotions linked by the article, and the front page features a couple of missions that give 50 USDT total for doing things like "join our telegram group", "set up a notification on our app".

Re: The Bit Short: Inside Crypto’s Doomsday Machine

#223

Post by ric2b »

dragonwriter wrote: post #159
DSingularity wrote: post #156

Earlier quoted context omitted.

If tether crashed I would expect bitcoins price to go up not down. It would suck for people holding tether because nobody would want their tether.

> If tether crashed I would expect bitcoins price to go up not down. Bitcoin’s price in what reference currency ? USDT? Clearly. USDC? Actual USD (probably measured indirectly via intermediary currencies)? Something else? For anything but USDT, the reason for such an expectation could use some explanation.

All of the above if most of the demand from people fleeing from USDT goes into Bitcoin, which is likely.

More people chasing the same thing -> price goes up.

But obviously the BTC/USDT price would go up a lot more because USDT would be going down at the same time.

Re: The Bit Short: Inside Crypto’s Doomsday Machine

#224

Post by dnp100 »

not2b wrote: post #110

It seems that this guy decided to go heavily into Bitcoin because of a mistaken belief that seems all too common: "At the time, I saw a market dislocation and the likelihood of significant dollar inflation due to the US Government’s likely response to the unfolding pandemic." He thought that government responses to severe crises that inject lots of money into the economy will cause "significant dollar inflation". In…

Deflation is a wonderful thing. It means more people can buy more stuff. It should be one of the primary goals of our civilization.

Re: The Bit Short: Inside Crypto’s Doomsday Machine

#225

Post by [deleted] »

Infinitesimus wrote: post #143
not2b wrote: post #110

It seems that this guy decided to go heavily into Bitcoin because of a mistaken belief that seems all too common: "At the time, I saw a market dislocation and the likelihood of significant dollar inflation due to the US Government’s likely response to the unfolding pandemic." He thought that government responses to severe crises that inject lots of money into the economy will cause "significant dollar inflation". In…

CPI is a very distorted view of actual living costs over time. House prices aren't included and we've seen prices balloon over the last decade. Sure, your apples cost the same but good luck trying to buy property . Yes we have the usual supply constraints, etc.

[deleted]

Re: The Bit Short: Inside Crypto’s Doomsday Machine

#226

Post by ric2b »

dgellow wrote: post #206
cryptoanonymous wrote: post #117

Hi, I'm the author. Using a throwaway for all the obvious reasons. I'll try to dive into this thread over the next few hours to answer any questions folks may have about this. Please feel free to ask.

My personal prediction (shasum256): fd559af88adde4082122c16e6b77356a90d2a367600f43acbdd6615c3dc4cc28

Wow, that's a bold prediction. Not sure I agree though.

Re: The Bit Short: Inside Crypto’s Doomsday Machine

#227

Post by ric2b »

JackFr wrote: post #33

I’ve always been, and remain still, a skeptic of all things crypto. I typically skip the crypto-focused articles on HN. I’m sure glad I didn’t today. > The US Treasury should enforce 100% reserve requirements on all USD-pegged crypto stablecoins, with mandatory audits. Laughter is really the best way to start my day.

Laughable indeed.

Banks, which are essential to our economy, have 0% reserve requirements but this niche company that can crash to 0 without doing much harm to the economy should be forced to have 100% reserves? Who cares, just don't accept Tether in exchange for anything and you're good.

Re: The Bit Short: Inside Crypto’s Doomsday Machine

#228

Post by dragonwriter »

SilasX wrote: post #185
dragonwriter wrote: post #174

Earlier quoted context omitted.

> Depends on who the “we” is there. I would argue the statement is true for any significant government or private use of general inflation measures. But, sure, if you’ve got a case where the CPI is actually used for a purpose and you think a different measure of inflation that incorporated asset prices would be a better replacement for the CPI, please feel free to present (1) the existing use in question, (2) your pr…

That was the purpose of comparing to cows and milk. For all the same reasons you should worry about cows being expensive (even if milk is still cheap), you should worry about real estate being expensive (even if rents are low). In the case of a household, those mean that you can't take some of your production, and save it for the future in capital goods -- the same kind of thing that happens when more of your income…

> For all the same reasons you should worry about cows being expensive (even if milk is still cheap), you should worry about real estate being expensive (even if rents are low).

I would argue that the only reason you should consider cows being an expensive an issue if milk is cheap is in regard to it making some other bovine product expensive; cows aren’t important in and of themselves, but as instrumentalities in the production of milk and other products.

> In the case of a household, those mean that you can’t take some of your production, and save it for the future in capital goods

No, asset inflation absolutely does not mean that. Increasing the minimum buy in for asset investments would do that, but we’ve got mature enough financial markets that a general increase in asset prices doesn’t increase the minimum needed to enter productive investments.

> In the case of a central bank, those mean that the injections of money aren’t (currently) effective for stimulating economic activity

No, it doesn’t; driving money into productive investments and out of cash (which, as an expected side effect, produces asset price inflation) is part of the mechanism by which loose monetary policy is expected to stimulate economic activity. Asset price inflation does not indicate that that is not working, it is what you expect if it is working.

What would indicate that it is not working is if output figures did not exceed what was expected without the policy.

Re: The Bit Short: Inside Crypto’s Doomsday Machine

#229

Post by ric2b »

robinhoodexe wrote: post #98

On kraken, one can short Tether against the US Dollar. Since Tether is usually pretty close to $1, I wonder if it’s worth it to open a short in case it’s all falling apart. I mean, in case of a crash the price of tether would most certainly fall, right?

That's a good point, there's almost no downside to shorting Tether besides the interest, since it would never go much above USD.

Given that the interest must be wild, no?

Re: The Bit Short: Inside Crypto’s Doomsday Machine

#230

Post by phyalow »

EliRivers wrote: post #11
BelenusMordred wrote: post #7

[flagged]

"Tether holds far more than your bank or many bluechips in backing, try not to forget that one." The author writes right there in the article why he thinks Tether is full of shit. He states that the bank they claim to be putting all their dollars in simply doesn't have that many dollars. So you can now put your money where your mouth is and explain why he's mistaken about that. Addeundum, some time later: dylkil has…

Devils advocate, (I think tether is B/S) but the Bahamas deposits sheet they mention wont include securities like TBills and Corporate Credit, which I expect Tether would hold as collateral...
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