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An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange

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Re: An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange

#291

Post by [deleted] »

mancerayder wrote: post #92
koolba wrote: post #87

> Neither Tether nor Bitfinex disclose on their websites or in any public documents where they’re located or who’s in charge, but information is available elsewhere. > Jan Ludovicus van der Velde is CEO of both Bitfinex and Tether, Torossian said by email on Dec. 3. A LinkedIn page for someone named J. L. van der Velde, who identifies himself as Bitfinex’s CEO, says he speaks Dutch, English, German, Italian and Chine…

Well, they're also on the regulatory radar, now, almost certainly. Now if they try to run off, that turns into a fugitive-like situation versus a potentially just oops-type one. There's a lot of leeway for business fuckups in most jurisdictions. Although in this case, there seems to be a strong case for fraud, so who knows.

[deleted]

Re: An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange

#292

Post by [deleted] »

arcticfox wrote: post #213
Cakez0r wrote: post #207

Earlier quoted context omitted.

You can short Tether on Kraken.

Shorting Tether is pretty strange, since if it works as designed it will essentially never increase in value, there's no risk on that end. And if it's a fraud that collapses, the short pays off big. Can somebody explain how that effect would get priced into the market? I can't think of another commodity like that.

[deleted]

Re: An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange

#293

Post by FooHentai »

python-guy-vt wrote: post #150
querulous wrote: post #138

Earlier quoted context omitted.

that's not how markets work. bitcoin has no intrinsic value, just a exchange rate with other things

that is exactly how markets work. > bitcoin has no intrinsic value, just a exchange rate with other things 1. It has proof-of-work, which gives it value 2. Supply of the coin and demand for the coins determine the price. The only thing that can vary widely is the demand, the supply cannot be fucked with (unlike fiat currency). It is impossible for whole bunch of new coins to suddenly appear out of thin air. There is…

>1. It has proof-of-work, which gives it value

"I burned a bunch of electricity and created a cryptographically provable magic token".

There is no value here beyond exchanges with the other bitcoin speculators around you. The value you describe is no different to the value of a pixel on the million dollar homepage.

There will be a point where the emperor is revealed to have no clothes and when you try to extract actual value from the bitcoins that you are holding (i.e. sell them), you will find there is nobody who wants to buy.

Although if you like, I'll trade for beanie babies. I've got rare ones, nobody else has these. They only made a few.

Re: An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange

#294

Post by mv4 »

wpietri wrote: post #101
jpereira wrote: post #17

Stable coin systems are going to be massively important and there's a ton of different projects trying to make it happen. This [1] is a really solid explanation on how one of them, Dai from MakerDAO, works. [1] https://medium.com/cryptolinks/maker-for-dummies-a-plain-eng...

One of the other parallels that interests me is that there's very little incentive to be publicly skeptical of the nonsense. People were immensely critical of Warren Buffett during the dot-com bubble. He was frank that their valuations didn't make sense to him, and he took a pasting for it. He turned out to be right, but only after taking a lot of heat: http://news.bbc.co.uk/2/hi/business/1217716.stm There's little g…

I think Warren Buffet also questioned Bitcoin a few years ago, will try to find that reference.

I also just remembered that I questioned it too on Twitter, after seeing some hype from Andreessen, and he promptly blocked me.

Re: An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange

#295

Post by Havoc »

viach wrote: post #46
searine wrote: post #3

Rising complexity of financial instruments? Check. Uncertainty about the capital backing of a booming market? Check. FOMO fever? Check. Where have I seen this before?

In "Atlas Shrugged"?

Pretty sure he means the subprime crisis

Re: An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange

#296

Post by s17n »

aaavl2821 wrote: post #275
s17n wrote: post #266

Earlier quoted context omitted.

The optimistic scenario is that Bitcoin becomes a currency like cash or a store of value like gold, in which case it will be valued in the trillions. Somewhat conservatively let's say that the market cap in these scenarios is $2 trillion USD. At today's ~200B market cap, this implies the market is giving 10 to 1 odds that bitcoin is going to zero. Not sure how any of this is on its face "irrational".

the irrational part is 1) an overestimation of the likelihood of bitcoin becoming worth $2 trillion in a reasonable timeframe (1 in 10 odds of that happening!?) and 2) underweighting the value of large changes in low probability levels: based on the above back of the envelope math, you ascribe 10 to 1 odds of bitcoin failing. the math that supports that is so imprecise as to be almost nonexistent, but the details are…

If the odds of success are anything less than .1, then buying at the current price is a bad idea. I agree with you that the odds are in fact less than .1 but it's just a guess - if somebody else thinks it's .5, well, who am I to say that they're wrong.

Pretty much any investment thesis involves guesswork at some point. That doesn't make investing irrational.

Re: An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange

#297

Post by python-guy-vt »

mancerayder wrote: post #192
python-guy-vt wrote: post #133

Earlier quoted context omitted.

> fully determined by supply and demand With bitcoin you cannot manipulate the supply, therefore you can't magically create $800M out of thin air.

You're fundamentally missing the main idea here. If you don't understand the fake Tether situation then in this case consider: Someone makes 1M of counterfeit US Dollars using their own printing machine and puts it in a suitcase, and they exchange that suitcase with you, and in return you give them 1M of bitcoin in their digital wallets. Now do you understand the thread?

Your example is a reflection on counterfeiter and the person being deceived. That has nothing to do with the value of bitcoin.

Re: An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange

#298

Post by python-guy-vt »

querulous wrote: post #212
python-guy-vt wrote: post #150

Earlier quoted context omitted.

that is exactly how markets work. > bitcoin has no intrinsic value, just a exchange rate with other things 1. It has proof-of-work, which gives it value 2. Supply of the coin and demand for the coins determine the price. The only thing that can vary widely is the demand, the supply cannot be fucked with (unlike fiat currency). It is impossible for whole bunch of new coins to suddenly appear out of thin air. There is…

we're not talking about the number of bitcoins though, we're talking about it's value

you can't talk about value without talking about supply

Re: An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange

#299

Post by python-guy-vt »

empath75 wrote: post #181
python-guy-vt wrote: post #141

Earlier quoted context omitted.

Good point. I am taking for granted that people will have their coins in their wallets, and lot just leave them up on an exchange.

how many people do you think keep their bitcoins in wallets vs on exchanges?

don't know, but I would think leaving it on an exchange is a terrible idea (Mt. Gox)

Re: An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange

#300

Post by FireBeyond »

komali2 wrote: post #268
FireBeyond wrote: post #243

Earlier quoted context omitted.

And not refuse to name banks without an NDA signed and in place...

Did I misread the article, or weren't the banks they refused to name the banks involved in shutting them out of the US?

As far as I believe Wells Fargo is the bank that severed ties:

"After Wells Fargo severed ties, Tether won’t name its banks"

"On Dec. 2, Bitfinex released a quarterly report announcing it would no longer serve U.S. customers because it’s too expensive to do business with them. This followed Wells Fargo & Co.’s decision earlier in the year to end its role as a correspondent bank through which customers in the U.S. could send money to Bitfinex and Tether’s banks in Taiwan. Bitfinex and Tether filed suit against Wells Fargo, but later withdrew the case."

"However, Ronn Torossian, a spokesman for Bitfinex and Tether, refused to identify their current banks unless a reporter signed a non-disclosure agreement, an offer that wasn’t accepted."

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