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Tether price manipulation

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Re: Tether price manipulation

#311

Post by suikadayo »

dylkil wrote: post #27
qeternity wrote: post #15

The problem is that in the early days of @Bitfinex'ed this was all a bit of a sideshow because there was genuinely large interest from retail and the outcome of crypto was far less certain. However three years on, crypto still does not have a "killer app" and is 99.99% used for speculation. Bitcoin's narrative has had to morph from "digital currency" to "digital gold". But in the depths of the March panic, Tether jum…

>Bitcoin's narrative has had to morph from "digital currency" to "digital gold". This narrative was an intentional morphing by various actors within the space (Blockstream) who believed raising the blocksize to allow higher throughput would cause 'centralisation'. Instead they want people to use layer 2 solutions such as blockstreams own federated product Liquid.

I don't understand why you're being downvoted. Anybody who was here before 2017 know what happened.

Re: Tether price manipulation

#312

Post by spiralx »

user22 wrote: post #135
JohnJamesRambo wrote: post #119

Earlier quoted context omitted.

The killer app for Bitcoin is escaping government fiat money that is backed by literally nothing at all and is being printed at increasingly alarming rates. 40% of all USD ever created were “made” in 2020. That will have repercussions for decades and isn’t a currency I want to stay in. https://fred.stlouisfed.org/series/M1 Ironically (or not) Bitcoin was created in 2009 right when that graph gets really crazy.

I have a question, isn't the problem with the gold standard that the amount of dollars is fixed and in order to have enough currency to drive a rapidly growing economy you would in essence be buying a gallon of milk for .25 cents? It seems to me that either you the amount of currency in circulation needs to increase or the value of the existing currency needs to increase. Taking into account the gold standard was use…

A shortage of bullion in Europe during the 15th century caused problems everywhere. That was followed by a huge influx of gold from the Americas in the 16th century, which also caused massive problems across the continent!

https://en.wikipedia.org/wiki/Great_Bullion_Famine

https://en.wikipedia.org/wiki/Price_revolution

Both under- and over-supply had negative effects on the economies of Europe.

The gold standard really was a primitive fiat currency anyway, governments would debase coins so they contained less gold in order to expand the money supply for instance. And only a small fraction of coins would be gold anyway, silver was far more common - the Pound Sterling takes it's name from a pound of silver from the easterlings (Germans). Paper money just made it obvious that physical currency was only a representation of wealth and not a fixed unit of wealth itself.

The gold standard is basically a political myth about a system that never really existed. Money is a very abstract concept, and reducing it to physical tokens and easily intuitive rules is appealing to many.

Re: Tether price manipulation

#313

Post by jayd16 »

gruez wrote: post #136

>4) How the scam works: >Tether can print infinite amounts of (worthless) $USDT. >They then inject this into BTC, ETH, LTC, (and others) to cause prices to pump. >Notice how during the months they stopped printing Tether, the market moves sideways or drops significantly. >This graph also shows the extent to which USDT plays a role in Bitcoin's price action over the years. I don't get it. This doesn't really prove any…

Yes, you're right. The point is without oversight or transparency we can't really know whats going on.

Re: Tether price manipulation

#314

Post by suikadayo »

dylkil wrote: post #164
tromp wrote: post #114

Earlier quoted context omitted.

As explained by blockstream co-founder Greg Maxwell in [1], the blocksize is constrained in order to ensure a steady backlog of fee paying transactions, that allow bitcoin to remain secure in the long term when block subsidy becomes insignificant. [1] https://bitcointalk.org/index.php?topic=5306354.0

>that allow bitcoin to remain secure in the long term when block subsidy becomes insignificant. this line of reasoning is silly. To match the current block subsidy with the current block size limit when miner subsidy runs out the average transaction fee will need to be >$127. $45mil daily revenue / 350,000 txs per day OR, you could increase the block size limit to 10mb, allowing 3.5mil txs per day, or 100mb allowing…

> normal people can setup a full node

This argument was really silly too because people can afford higher capacity drives, and better internet connection according to Moore's Law

Re: Tether price manipulation

#315

Post by mathgenius »

qeternity wrote: post #103
lukebuehler wrote: post #95

Earlier quoted context omitted.

I’ve been wondering if Tether is really a scam for a long time. In all these analyses, one key point is missing: arbitrage traders have to make up for the sell pressure on USDT when Tethers are being printed and sold for BTC. Can anyone show me how there is a plausible mechanism/scheme/conspiracy that keeps the USD/USDT exchange rate stable while a crazy amount of illegitimate Tethers are being printed? Edit: typo an…

I'm not sure what arbitrage you're referring to. But more importantly, nobody is selling these freshly printed USDT for USD...that's the whole point. They are selling USDT for BTC. 99% of the USD/USDT trading is fake/wash trading to give the illusion of volume.

Kraken has USDT/USD markets. I'm sure there are plenty of other places to trade USDT for USD.

https://www.kraken.com/prices/usdt-tether-usd-price-chart/us...

Re: Tether price manipulation

#316

Post by ryani »

dylkil wrote: post #166
gruez wrote: post #143

Earlier quoted context omitted.

I think the scaling limitations were well known at the beginning. If Bitcoin were to get as large as visa/mastercard the blockchain would be growing at a rate of a few gigabytes per day, which would kill decentralization.

the limitations have been researched extensively outside of the echo chamber of bitcoin development. It is possible to scale a utxo system like bitcoins to hundreds of millions of txs per day. Xthinner[1] can compress blocksizes by 99%, but bitcoin devs have ignored this with handywavy arguments. [1] https://github.com/jtoomim/xthinner-spec

That page claims it can compress a single transaction down to 12-16 bits. Unless the vast majority of btc transactions are between the same few wallet addresses, this seems impossible? Even if you assume that the transaction is an instance of a common known script, you still need from-address, to-address, and amount, all of which are >16 bit quantities and in general are cryptographically random.

The only explanation I can think of is that they are relying on a sidechannel to communicate the actual transactions, which makes sense in the miner case (the utxo pool) but not in the general node case.

Beyond that, I run a BTC node occasionally and the bottleneck is validating blocks, not downloading them. Transactions are complicated enough right now that I'm only able to catch up at about 350x real-time (that is, it takes around a full cpu-day to validate a year of blocks/transactions).

Re: Tether price manipulation

#317

Post by olalonde »

qeternity wrote: post #29
xur17 wrote: post #24

Earlier quoted context omitted.

That or provide on and off ramps that users can use to arbitrage any deviations from a value of $1.

Which they cannot do because 1) they don't have any banking and 2) they cannot allow redemptions which would risk a run on their reserves (to the degree those exist at all).

Except they do allow redemptions: https://app.tether.to/app/signup

Re: Tether price manipulation

#318

Post by Acrobatic_Road »

fuzzylightbulb wrote: post #191
JohnJamesRambo wrote: post #119

Earlier quoted context omitted.

The killer app for Bitcoin is escaping government fiat money that is backed by literally nothing at all and is being printed at increasingly alarming rates. 40% of all USD ever created were “made” in 2020. That will have repercussions for decades and isn’t a currency I want to stay in. https://fred.stlouisfed.org/series/M1 Ironically (or not) Bitcoin was created in 2009 right when that graph gets really crazy.

> backed by literally nothing It is the only thing the government accepts for tax payments. Given that you can be arrested for not paying your taxes it is "backed" by the barrel of a gun, a threat to your very being. In one sense this is the only real thing there is.

>It is the only thing the government accepts for tax payments. Given that you can be arrested for not paying your taxes it is "backed" by the barrel of a gun, a threat to your very being. In one sense this is the only real thing there is.

That's more than enough reason why we should try something else. It doesn't inspire a lot of confidence. By that reasoning, the USD has the same sort of backing as the Venezuelan Bolivar. So what's to stop the prior from becoming like the latter?

Re: Tether price manipulation

#319

Post by csomar »

gruez wrote: post #283
qeternity wrote: post #179

Earlier quoted context omitted.

Because the mechanism to transmit USDT to USD doesn't exist. Tether has never demonstrated a single USDT redemption. All of the trading on an exchange doesn't matter because on USDT exchanges, you never actually have USD. If you trade USDT/USD on Binance, your profits are still actually USDT denominated! There is no proven way to convert USDT to USD except via another crypto (i.e. Binance USDT -> BTC and then Coinbas…

>Tether has never demonstrated a single USDT redemption Does that matter when you can withdraw from a USDT exchange and get USD in a bank account, or trade USDT for USD at kraken?

I think it's a waste of time trying to argue with the USDT conspiracy theory crowd. I'm not really sure what's their problem; they clearly never traded the market or used it. Maybe it's a butt-hurt feeling from missing out on this decade best performing assets?

I'll give you a more sensible counter-argument: If you held USDT in the last 4 years (only) and actively generated yield (requires 1 hours work max per week), and periodically withdrew it (1-3 months) my reports show a 120% gain. This means if you bought $100k of USDT 4 years ago, you'd have withdrawn $120k into real dollars and still have $100k of USDT. In this situation, it's impossible to lose even if Tether is worth 0 tomorrow.

Yield have gone considerably down. This means traders now trust USDT more than they did a few years ago. This would also mean that traders who are into risk would not hold USDT, they would rather hold something else to get better yield. If USDT was risky, its total market cap will decrease, as it doesn't make sense to hold into it with low yield. That or the market will quickly collapse.

This can give you an idea (better than a stamped report from any AAA auditing firm) about how strong the USDT position in the market is.

Re: Tether price manipulation

#320

Post by vorpalhex »

doggosphere wrote: post #308
qeternity wrote: post #15

The problem is that in the early days of @Bitfinex'ed this was all a bit of a sideshow because there was genuinely large interest from retail and the outcome of crypto was far less certain. However three years on, crypto still does not have a "killer app" and is 99.99% used for speculation. Bitcoin's narrative has had to morph from "digital currency" to "digital gold". But in the depths of the March panic, Tether jum…

However three years on, crypto still does not have a "killer app" and is 99.99% used for speculation. The killer app is decentralized, permissionless, open source, and censorship resistant network. Bitcoin's narrative has had to morph from "digital currency" to "digital gold". Gold morphed from worthless rocks in the the ground, to coins traded by traveling merchants, to stores of value that were eventually centraliz…

> The killer app is decentralized, permissionless, open source, and censorship resistant network.

Yes, but what can I do with that other than toot/tweet/twit at other people and buy LSD tabs?

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