Approx. 24 hours ago, Tether printed 1B $USDT out of thin air • Hacker News Board

Re: Approx. 24 hours ago, Tether printed 1B $USDT out of thin air

#61

Post by tinco » Sun, Dec 05, 2021, 9:30 PM UTC

superjan wrote: post #31

alpha_squared wrote: post #11

Every time there's a tether story here, the inevitable discussion of fraudulent activity comes up because Tether seems like an outright scam. I'm inclined to believe all that from what I've read and however little I can make sense of. However, I can't really tell how this ends. They seem confident that there will be no repercussions to minting money out of thin air and, so far, they've been right. Eventually, that's…

Beyond the fraud allegations, the idea that an organisation can just print extra money as they see fit, doesn’t that go against the principles of crypto finance? I am genuinely curious why people think that is a sustainable idea.

The principles of crypto finance? Cryptocurrencies are not built on principles, they are built on technologies. The only unifying principle across all cryptocurrencies that I've noticed is that you access your assets through a cryptographic hash. You could launch USD+SEPA+your banks online banking interface today and call it a cryptocurrency, it's as much a cryptocurrency as for example Ripple is.

edit: ok the other "principle" might be that all (most?) cryptocurrencies are independent from government, they are owned and managed by individuals, companies and groups of people/devices (if you're lucky).

Re: Approx. 24 hours ago, Tether printed 1B $USDT out of thin air

#62

Post by AnthonyMouse » Sun, Dec 05, 2021, 9:31 PM UTC

atdrummond wrote: post #46

secondcoming wrote: post #28

Earlier quoted context omitted.

A loaf of bread would cost $100

A UBI doesn’t necessarily result in inflation. The later is a combination of monetary policy and expectations. UBIs can be paid by means other than printing money.

They're also the best (and possibly only equitable) way of distributing money that you're going to print anyway for e.g. economic stimulus.

Re: Approx. 24 hours ago, Tether printed 1B $USDT out of thin air

#63

Post by tonguez » Sun, Dec 05, 2021, 9:31 PM UTC

sombremesa wrote: post #29

peakaboo wrote: post #23

Earlier quoted context omitted.

Of course but you could give people some free money nevertheless and it would make the world a better place. What do you think would happen if you gave 1000 dollars to each person in America every month? I think a lot of good would come from that and not much bad.

> I think a lot of good would come from that and not much bad. Here something that'd happen - the homeless in encampments would get hoovered up by slumlords who put them in squalor and consume their $1k checks. Poor people would have more children because each child = $1k/mo, even if they have to wait 18 years. Abduction would be easy - the ransom pays itself over time. Fraud would be rampant. The ultra poor undercla…

Your first sentence is grammatically incorrect and incoherent.

"Poor people would have more children because each child = [$$$]"

A lot of poor people already do this for this exact reason.

"The ultra poor underclass who are undocumented would still get nothing"

Should a person be allowed to enter Japan, refuse to leave and then demand the Japanese people pay them $1k a month?

Re: Approx. 24 hours ago, Tether printed 1B $USDT out of thin air

#64

Post by rglullis » Sun, Dec 05, 2021, 9:33 PM UTC

csomar wrote: post #35

To put this into perspective 1. 1 billion is just 1.33% of the total USD Tether has issued. 2. USDC also issued 1bn in the last 24 hours.

Circle has passed multiple audits. Coinbase is a company that managed to at least convince the SEC they are doing things correctly. Also important, no one from Circle/Coinbase leadership is missing, incommunicado or in hiding.

Re: Approx. 24 hours ago, Tether printed 1B $USDT out of thin air

#65

Post by pezzana » Sun, Dec 05, 2021, 9:33 PM UTC

And? So what?

If that quantity of Tether (1/75 of the float) were dumped into the open market for USD, you'd expect to see the USD change rate fall. That clearly hasn't happened. The rate has been very close to 1:1 forever.

There's this unsubstantiated conspiracy theory that as I gather goes like this: Tether prints tokens, uses them to buy bitcoin when the USDBTC exchange rate falls. These Tether issuance spikes always happen after BTC corrections, and this is taken as evidence of pumping USDBTC.

The problem is that if there were legitimate buying of BTC with Tether, which is plausible after the ass-whooping USDBTC has taken recently, new Tether would need to be issued to keep the 1:1 peg.

Sources critical of Tether IMO don't provide the evidence needed to distinguish the two scenarios.

Re: Approx. 24 hours ago, Tether printed 1B $USDT out of thin air

#66

Post by thaumasiotes » Sun, Dec 05, 2021, 9:33 PM UTC

SantalBlush wrote: post #60

opinion-is-bad wrote: post #50

Earlier quoted context omitted.

That’s not free money; it’s money taken from people under threat of violence.

Not agreeing with the parent comment, but I fail to see how printing money and distributing it involves violence.

The USA actually does have laws against creating anything that might be interpreted as competing with the official currency. This is the most likely avenue for violence to come in, as people try to resist devalued money by using substitutes.

Re: Approx. 24 hours ago, Tether printed 1B $USDT out of thin air

#67

Post by graeme » Sun, Dec 05, 2021, 9:33 PM UTC

aaronax wrote: post #52

josefrichter wrote: post #37

I wonder what would happen if this proved to be scam. Would that kill the whole crypto market?

Anyone holding Tether will be stuck selling it for the equivalent of $0.05 or whatever. This alone would have no effect on crypto prices. However, it will become harder to get various government-type currencies in to exchanges so presumably purchasing demand will fall, which seems like it would make crypto prices fall too.

80% of crypto trades are against USDT

Re: Approx. 24 hours ago, Tether printed 1B $USDT out of thin air

#68

Post by spuz » Sun, Dec 05, 2021, 9:34 PM UTC

poetically wrote: post #16

babyshake wrote: post #6

When it says out of thin air, it means that is some verifiable confirmation of no collateral? Or is the "out of thin air" part just means normal minting?

No one has seen any of their collateral or knows how much of it they actually have. I believe the finance people call this being over-leveraged but I'm not an expert. Seems kinda weird that the SEC hasn't looked into it.

The US treasury released a report on stablecoins last month warning that a run on them could disrupt the wider financial system:

> In addition to market integrity, investor protection, and illicit finance concerns, the potential for the increased use of stablecoins as a means of payment raises a range of prudential concerns. If stablecoin issuers do not honor a request to redeem a stablecoin, or if users lose confidence in a stablecoin issuer’s ability to honor such a request, runs on the arrangement could occur that may result in harm to users and the broader financial system. Further, to the extent stablecoins are widely used to facilitate payments, disruptions to the payment chain that allows stablecoins to be transferred among users could lead to a loss of payments efficiency and safety and undermine the functioning of the broader economy. The potential for stablecoin arrangements to scale rapidly raises additional issues related to systemic risk and concentration of economic power.

I see this as the government equivalent of shouting from the rooftops. It's just a shame no one will treat it that way.

https://home.treasury.gov/system/files/136/StableCoinReport_...

Re: Approx. 24 hours ago, Tether printed 1B $USDT out of thin air

#69

Post by josefrichter » Sun, Dec 05, 2021, 9:36 PM UTC

aaronax wrote: post #52

josefrichter wrote: post #37

I wonder what would happen if this proved to be scam. Would that kill the whole crypto market?

Anyone holding Tether will be stuck selling it for the equivalent of $0.05 or whatever. This alone would have no effect on crypto prices. However, it will become harder to get various government-type currencies in to exchanges so presumably purchasing demand will fall, which seems like it would make crypto prices fall too.

That for sure. But I am more wondering about the collateral damage to other coins. Coz it would likely trigger sell off of many other coins to cover loses.

On the other hand, the market cap is 75B, while ETH is 488B and BTC is 919B. So the impact maybe wouldn't be too drastic and too long lasting.

I wonder if it's worth converting USDC and DAI loans to USDT, would be easier to repay if it did crash..

Re: Approx. 24 hours ago, Tether printed 1B $USDT out of thin air

#70

Post by throwvirtever » Sun, Dec 05, 2021, 9:36 PM UTC

pezzana wrote: post #65

And? So what? If that quantity of Tether (1/75 of the float) were dumped into the open market for USD, you'd expect to see the USD change rate fall. That clearly hasn't happened. The rate has been very close to 1:1 forever. There's this unsubstantiated conspiracy theory that as I gather goes like this: Tether prints tokens, uses them to buy bitcoin when the USDBTC exchange rate falls. These Tether issuance spikes alw…

> [I]f there were legitimate buying of BTC with Tether, which is plausible after the ass-whooping USDBTC has taken recently, new Tether would need to be issued to keep the 1:1 peg.

Can you explain in detail why new Tether would need to be issued?