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Tether Withdrawals Top $10B

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Re: Tether Withdrawals Top $10B

#231

Post by robonerd »

Geee wrote: post #171
AlexandrB wrote: post #155

Earlier quoted context omitted.

This is what get's me when people say "do your research" in crypto. Where am I supposed to do that? Do I need to trawl Discord until I'm satisfied a coin is on the up-and-up? Is the absence of complaints like this for a crypto project evidence of quality or evidence of vigorous moderation?

Dyor means that they know it's a scam, but they want to avoid responsibility.

It's also a method of making yourself seem authoritative or knowledgeable without having to prove it. It implies that you did your research, but you aren't going to prove it because everybody else needs to do the same for themselves.

Re: Tether Withdrawals Top $10B

#232

Post by ceejayoz »

bpodgursky wrote: post #208
ProjectArcturis wrote: post #198

Earlier quoted context omitted.

What could you do with a USD stablecoin that you can't do with a regular old dollar? Other than let everyone see your transactions and account balances.

Exchange it for another coin in less than 3-5 business days

My Dad sends me money via Zelle. It shows up instantly in my account, with zero fees, even if it's 10pm on a Sunday.

https://mashable.com/article/ethereum-gas-fees-skyrocket-bor...

> If you were trying to complete a transaction on the Ethereum network last night, you might have been taken aback by the ridiculously high gas fees you saw. For example, one user purchased a $25 NFT on Saturday evening. Their total price? $3,325. That's $3,300 just in fees.

I'll stick with USD, I think.

Re: Tether Withdrawals Top $10B

#233

Post by Axsuul »

medo-bear wrote: post #151
Axsuul wrote: post #142

Earlier quoted context omitted.

How does Ukraine aid devalue USD? If anything, it helps keep it in power by weakening Russia and furthering the US hegemony.

its a massive investment and if you look at it this way you have to ask, is ukraine such a sure bet and what are the consequences of that investment going south. and the failure to ask these questions is indicative that too many people see the usd as being in unlimited supply, which by itself devalues the usd

Nothing is a sure bet but leaving Russian aggression unchecked destabilizes the region. The world counts on the US to maintain the peace and status quo. As long as there's still confidence in that, the US currency will continue being the world's reserve currency along with all the benefits that come with that.

Re: Tether Withdrawals Top $10B

#234

Post by robonerd »

horsecabletruck wrote: post #213
ProjectArcturis wrote: post #198

Earlier quoted context omitted.

What could you do with a USD stablecoin that you can't do with a regular old dollar? Other than let everyone see your transactions and account balances.

Many things. A stablecoin that implements ERC20 interface can be used across Ethereum ecosystem and it’s smart contracts. You could even program your own smart contracts around the token, such as to setup a time lock or auction. Examples: converting it to another token on a decentralized exchange, purchasing an NFT, holding the token in a non-custodial wallet, holding the token in a multi-signatory wallet, participat…

Most of these are just "do a thing you can already do with money, but shittier"

Re: Tether Withdrawals Top $10B

#235

Post by rsync »

jerf wrote: post #174
hbosch wrote: post #161

Earlier quoted context omitted.

In theory, you're correct. If 1B USDT is backed up, 1 to 1, with exactly 1B USD and no one every moves, sells, invests, or otherwise trades the underlying USD then the coin is actually stable... but it's already been established that Tether is backed by assets other than USD[0]. So... how much are you willing to trust them? 0. https://www.cnbc.com/2021/02/23/tether-bitfinex-reach-settle...

And look at the incentives of all the individual parties in such a scenario. I think this is the only way a "stablecoin" can function as designed... but it is not possible to construct an entity that has any scalable incentive to provide the backing that would create such a coin. For that entity, it is nothing but downside. Therefore, stable coins are a fiction on par with perpetual motion machines. In the short term…

What about the scenario your parent describes, but free redemption is 30 days and faster redemption costs (some basis points) ?

Re: Tether Withdrawals Top $10B

#236

Post by agumonkey »

shadedtriangle wrote: post #218
ineptech wrote: post #154

Someone help me understand this. All you need for a stable stablecoin is to save every dollar put in to it. The people behind Tether sell tethers for $1, they save all of those dollars, and whenever the price of Tethers drops to $0.99, they buy tethers until the price is back up to $1. As long as they never spend anything from the reserve, this can't fail no matter how unpopular the currency is - they can back the cu…

> All you need for a stable stablecoin is to save every dollar put in to it. That’s the issue right there. How does Tether save its dollars? We can see it in their transparency report[1]. Whether you believe them or not it’s not just cash in a bank account. * 0.41% Non-U.S. Treasury Bills * 55.53% U.S. Treasury Bills * 0.15% Reverse Repurchase Agreements * 5.81% Cash & Bank Deposits * 9.63% Money Market Funds * 28.47…

So the financial system is mostly reluctance ?

Re: Tether Withdrawals Top $10B

#238

Post by ATsch »

nradov wrote: post #193
ATsch wrote: post #146

Earlier quoted context omitted.

I'm not very well versed in how selling debt works, but the way I assume it works is the following: Say someone still owes me $1M over the next 10 years, but I think that there's now only a 50% chance of the debt being repaid. It would make sense for me to try and sell that debt for at least $500k to get a guaranteed immediate return, right? And then that person could say that they hold $1M dollars, even though it's…

Yes that's basically how it works. When a corporation holds a loan as an asset on their balance sheet, they're supposed to mark that asset to market reflecting the risk of default. But if marking to market isn't actually enforced by auditors or regulators then the company can pretend that the asset value is the same as face value. This can appear to work for years until there's a recession and a bunch of borrowers de…

Ah, that makes sense. I'm curious though, how would auditors ensure the asset is marked to reflect the risk? If one organization thinks the risk is substantually lower than another, what do they mark? Or is there generally enough arbitrage that this doesn't happen.

Re: Tether Withdrawals Top $10B

#239

Post by stormbrew »

arcticbull wrote: post #66
stormbrew wrote: post #57

Earlier quoted context omitted.

No one's being told otherwise with banks though. The current backup plan for 19th-century-style fiat bank runs is central bank insurance and money printing, not a rather bold claim that the banks are holding on to tens of billion of dollars in cash and not doing anything with it.

> The current backup plan for 19th-century-style fiat bank runs is central bank insurance and money printing... It's the FDIC. The FDIC was created in the wake of the Great Depression to make sure bank runs stopped. And in the last ~100 years since it was created they've succeeded. [1] Banks pay into the fund, which is used to make depositors whole in the event of insolvency. If the fund is exhausted, the FDIC also h…

I was being general because there are more countries in the world than the US, but this mechanism is the norm in most of the (US-aligned at least) world.

Re: Tether Withdrawals Top $10B

#240

Post by __turbobrew__ »

Geee wrote: post #180
ineptech wrote: post #154

Someone help me understand this. All you need for a stable stablecoin is to save every dollar put in to it. The people behind Tether sell tethers for $1, they save all of those dollars, and whenever the price of Tethers drops to $0.99, they buy tethers until the price is back up to $1. As long as they never spend anything from the reserve, this can't fail no matter how unpopular the currency is - they can back the cu…

The problem is that it's not that simple to just park $80b on a bank account. The bank will use the money to buy bonds or give it out in mortgages to get interest on it. It's akin to kicking the can to the bank, and getting the money out might fail or be too slow. It's probably better to manage the reserve yourself, to be able to manage risk and liquidity properly, rather than outsource it to a bank.

It sounds like the only way to do this is to create your own bank which directly integrates with the federal reserve.
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