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Tether Critical Announcement

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Re: Tether Critical Announcement

#301

Post by ActsJuvenile »

mancerayder wrote: post #258
ActsJuvenile wrote: post #176

Earlier quoted context omitted.

No one is going to deposit 600 mill in a hacked exchange via Tether crypto-Hawala using Taiwanese shell bank accounts. People with real money would instead wire the funds to Gemini or ItBit or even a terribly managed company like Coinbase. KISS

What's wrong with Coinbase? (I ask as a naive fool with a bit of money stored there).

Bugs. I have discovered two bugs personally, reported them to Coinbase, and those are still unresolved.

For context, I reported couple of bugs to MtGox back in the day, and even MtGox fixed them in under a month which is more than what I can say for Coinbase. I guess this is what happens when Coinbase speed-hired 100 people in one year with no proper team-building exercises.

Re: Tether Critical Announcement

#302

Post by dangero »

jankotek wrote: post #211
dangero wrote: post #83

I released a paper earlier this year talking about how we can reasonably lock cryptocurrency to fiat, but unfortunately the space is still rather immature. A single provider of USD tokens is extremely dangerous. Best case scenario would be if there were many companies like Tether and you could spread your token purchases between them automatically to minimize counterparty risk. Stellar and Ripple are closest to solvi…

The only reliable way is for central bank to issue its own crypto currency. Stellar / Ripple are not crypto currencies.

Outside of a central bank issuing cryptocurrency, you can remove counterparty risk with diversification. Stellar Lumens and Ripples are cryptocurrency based on the wikipedia definition: A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange using cryptography to secure the transactions, to control the creation of additional units, and to verify the transfer of assets.

Re: Tether Critical Announcement

#303

Post by dangero »

ActsJuvenile wrote: post #105
dangero wrote: post #83

I released a paper earlier this year talking about how we can reasonably lock cryptocurrency to fiat, but unfortunately the space is still rather immature. A single provider of USD tokens is extremely dangerous. Best case scenario would be if there were many companies like Tether and you could spread your token purchases between them automatically to minimize counterparty risk. Stellar and Ripple are closest to solvi…

Ripple is a scam and Jed McCaleb has been dumping thousands of Ripples a day since forever. You shouldn't encourage new users to buy Ripples.

Ripple the platform is closest to solving the counterparty problems with 1-1 USD tokens. I'm not encouraging people to buy Ripples I'm just stating -- the only way to limit the counterparty risk is to diversify. Banks are perfectly positioned to offer these 1-1 fiat tokens. Ripple is partnering with them.

Re: Tether Critical Announcement

#304

Post by ActsJuvenile »

MrRadar wrote: post #276
mancerayder wrote: post #258

Earlier quoted context omitted.

What's wrong with Coinbase? (I ask as a naive fool with a bit of money stored there).

Mostly that if anything goes wrong their support tends to be incredibly unresponsive. Also make sure you're not using SMS-based 2-factor authentication with them since there's a long history of people getting their phone numbers stolen and then their Coinbase accounts drained within minutes.

I can confirm: my 2FA has been hacked on Coinbase. My Social Security number + DOB are out on the internet, and it makes it trivially easy to hack companies with poor security protocols like Coinbase, Authy, AT&T, TMobile, Comcast, Yahoo.

Re: Tether Critical Announcement

#305

Post by PeterisP »

shobith wrote: post #300
PeterisP wrote: post #248

Earlier quoted context omitted.

In the banking sector only a small fraction of employees are required to run the payments infrastructure (in one example, 2% of employees ran the business part of payments, and another 2% of employees could be the IT infrastructure part required for that); payments are highly automated and almost everyone is handling the other parts of the banking business e.g. lending and investments. Visa and mastercard together em…

> Visa and mastercard together employ ~20k people and handle much, much, much more transactions than all the cryptocurrencies combined. 20K people (debatable) and a bunch of computers and networks which need to be managed by more people, and the infrastructure doesn't run on sunshine either (yet). Without laboring the point, if your position is: * The methods applied by the crypto currencies waste more energy than ou…

Proof of work systems (such as bitcoin and ethereum as of now) inherently cannot be made more efficient - their security requires that approving transactions must take so much computing power that an attacker can't afford to burn as much resources as they'd need. It'd be trivial to make the processing 100 or 10000 times more efficient, but that would defeat the whole purpose - instead, the computational (and thus energy) requirements must grow as the currencies become more valuable and processors more affordable; that's why we have the scalable difficulty factor in bitcoin etc - so that the mining gets less efficient with time.

Re: Tether Critical Announcement

#306

Post by modeless »

csomar wrote: post #245
modeless wrote: post #180

Earlier quoted context omitted.

> Tether certainly has a connection to Finex but they are not its biggest client. This is false. In fact, every "USD" market on Bitfinex is actually a Tether market. It doesn't matter what the label on the ticker is, because USD cannot be deposited or withdrawn from Bitfinex, only Tether. Given that, Bitfinex is by far the biggest Tether market.

That’s also wrong. Biggest tether market is bittrex followed by polo. Finex tether holdings are really minimal and for a good reason.

Bitfinex's Tether "holdings" are unverifiable and irrelevant anyway. What matters is what you can deposit and withdraw from their markets. It's not USD, it's Tether, and that is verifiable by anyone with a Bitfinex account.

Re: Tether Critical Announcement

#307

Post by jackstraw14 »

Nursie wrote: post #295
jackstraw14 wrote: post #284

Earlier quoted context omitted.

Just what exactly is your definition of an "actual, productive endeavour"? Is it really that ridiculous that we dedicate a lot of resources to keeping track of who owns what? We're a mostly capitalist society, right? In a system where private ownership reigns supreme, you absolutely need to keep track of who owns what or we'd have even greater wealth inequality than we have now. Personally, I'd like to see some kind…

A "lot" of resources would be 1% IMHO. If society is burning up not just a lot, but a majority of its effort in servicing its model (resource tracking), it seems to me something has gone very very wrong. You need to keep track of who owns what. You don't need to make that such a complicated thing that it takes vast portions of available human effort to track, and sucks in vast portions of the fruits of said effort. Y…

I don't disagree that it's a depressing waste of existence to spend one's life keeping track of stuff. Especially if it's not even your stuff. But we've only had the computing power to take a load off us humans for a decade or two. And plus everyone needs a job (pointless or not) or the unemployment statistics start to freak people out. It's sort of the hand we've been dealt, the whole "let's work hard now for a better future we'll never see" thing.

I think the situation will improve dramatically when some of these crypto projects begin to mature. From what I can tell, blockchains are the opposite of lightweight, and personally I'm not holding my breath for one to become useful for anything besides profit anytime soon. I think something like IOTA is a better candidate to be useful (a fee-less directed acyclic graph, not a blockchain). It's more like a new communications protocol that will allow machines to conduct their own transactions with each other. The team's goal is to make it useful first, and if it's profitable too well that's great. Maybe I'm just not that creative anymore, but I can't see a production-quality future for blockchains, and would agree that giant PNW datacenters doing nothing but proof-of-work is a massive waste of resources.

That said, these are mostly just research projects hoping they have one of the big ideas that will win.

Re: Tether Critical Announcement

#308

Post by Ajedi32 »

geofft wrote: post #299
3pt14159 wrote: post #278

Earlier quoted context omitted.

I've been in Bitcoin for over 7 years. This type of back and forth is exactly what happened to Mt Gox. And you know what? My friend got the fuck out of Mt Gox before it burst. When you have to choose between following a pre-bankrun rumour or following unsubstantiated pushback, follow the rumour. It costs you maybe 5% to get out vs 100% if you're wrong and banks / money holders compete on assuring people that there is…

On a side note, the fact that bank runs are rational decisions and that no FDIC-style agency exists to change the incentives seems bad for cryptocurrency in general. (Possible responses include both "the traditional financial system and fiat currency is actually pretty good" and "someone should run a reliable FDIC equivalent as a business for new exchanges and new coins".)

Isn't a bank run only an issue if the bank is using a fractional reserve? Cryptocurrency exchanges aren't banks; they're not supposed to keep a fractional reserve. If everyone suddenly demands all their coins at once, the exchange should have no trouble complying with that.

The only problem is that there's no way to know for sure whether an exchange is running on a fractional reserve or not.

Re: Tether Critical Announcement

#309

Post by twayamznacct »

askmike wrote: post #37
stale2002 wrote: post #33

Earlier quoted context omitted.

Well, it is "supposedly" backed up by USD. A whole bunch of people have been questioning whether they ACTUALLY have that money, very recently, and surprise surprise, there just 'happens' to be a hack that happens right now.

Not sure if "a whole bunch of people" equates more than 5 extremely vocal people on twitter and reddit. Tether published an audit a month ago.

You mean the document that specifically noted it was not an audit? That audit?

Re: Tether Critical Announcement

#310

Post by hacko0o »

patio11 wrote: post #4

If you haven't been following along, here's why this matters: Tethers is a sole-source cryptocurrency, pegged to the US dollar. Bitfinex produces it, though they're cagey (some would say outright lying at times) about the level of involvement. The primary purpose of tethers is money laundering, even more so than cryptocurrency generally. Bitfinex was cut off from the US financial system, which makes it impossible for…

Two things could've happened.

1. The saw all the buzz about BFX and Tether and decided to pile the negative buzz all at once.

or

2. Let's tell them we got hacked and shift the attention their; plus they might feel bad for us.

They were good when they first started but then they got full of themselves and started implementing very odd and sketchy operations. Personally, I won't use them until they become verified: https://cryptonaire.com/digital-assets

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