Maybe I'm missing something obvious, but exchanges like Kraken actually offer margin trading on pairs such as USDT/USD and USDT/EUR. https://support.kraken.com/hc/en-us/articles/227876608-Margi... If somebody (probably a non-US-person who is allowed to do margin trading there) is convinced that Tether will tank, why can't they just go on such exchanges and initiate a short? Is the fear that the exchange itself will become insolvent after the crash, and you won't be able to withdraw your fiat out of it in the end?
Report on Stablecoins [pdf]
671–680 of 697 posts
Re: Report on Stablecoins [pdf]
#672Earlier quoted context omitted.
After that hedge fund issued a $1M reward on Tether backing I did some more investigation and the thing I realized is that 1) Tether is inherently backed by BS and 2) crafting any sort of Tether short is near impossible because everyone in the game - Tether, the exchanges, etc. - will all be against you if you're winning in the short. There's that scene in "The Big Short" where Mark Baum and crew know the subprime bo…
I’ve been shorting a few bitcoin-related public companies on the theory that in a run on Tether they will have to liquidate large bitcoin holdings and bring down the rest of the market. It’s not as direct, but I’m less worried about counterparty risk. I wrote up my thesis here: https://paulbutler.org/2021/betting-against-bitcoin/
Interesting idea. On the topic of shorting Tether itself, maybe I'm missing something obvious, but exchanges like Kraken actually offer margin trading on pairs such as USDT/USD and USDT/EUR. https://support.kraken.com/hc/en-us/articles/227876608-Margi... If somebody (probably a non-US-person who is allowed to do margin trading there) is convinced that Tether will tank, why can't they just go on such exchanges and initiate a short? Is the fear that the exchange itself will become insolvent after the crash, and you won't be able to withdraw your fiat out of it in the end? I'd be curious to hear thoughts on this.
Re: Report on Stablecoins [pdf]
#673Earlier quoted context omitted.
I'm sure the government would love to throw Edward Snowden in jail, but he is out of their reach. They would love to shut down Wikileaks and Sci-Hub too. On the other hand, governments can very easily weaponize financial services to deny people the ability to send individuals and organizations money - which is how Wikileaks found itself digitally embargoed by Visa, PayPal and Mastercard. Not so with cryptocurrencies.…
Yes, cryptocurrencies are good if you want to finance illegal activity. However, since the vast majority of people are unable or unwilling to become international fugitives like Snowden, cryptocurrencies aren't especially useful as a way to post freely on twitter while retain your money against seizure by a hypothetical dystopian government.
You're assuming that financial censorship primarily targets illegal activity - it doesn't. The vast majority of financial censorship targets legal activity and persons, businesses and corporations who have not been charged by any government with any crime. And it's done by corporations pursuing political interests.
Re: Report on Stablecoins [pdf]
#674Earlier quoted context omitted.
Easy: bypassing financial censorship. Hint: try buying a 4chan pass without cryptocurrency.
Is that a joke? Your one example of real world value of crypto is that you can buy something on 4chan?
I could give you more examples if I needed to, but considering the argument always made here is that cryptocurrencies have precisely zero use cases, one example should suffice. If you want a better response, don't leave yourself open with sweeping generalizations.
Re: Report on Stablecoins [pdf]
#675Earlier quoted context omitted.
There is a very important aspect of opposite pressure. If DAI price ever loses peg and goes to eg 0.90 anyone with open positions immediately starts buying a shitton of them and closing their position, because they just got a 10% discount on paying off their debt, sending the peg back. If the price ever goes to 1.10, anyone with free capital around immediately starts minting new coins and floods the market with them,…
That’s true if there’s faith it comes back up from $.90. If it starts falling to $.99 then $.98 then $.95 then $.90.. you have to decide if it’s really a dip or the end.
If you really believed that Dai was on a crash course to $0, you would be very wise to buy ASAP to pay your dai debts and retrieve your collateral before the crash in Dai crashed Ethereum in tandem causing you to get liquidated.
Re: Report on Stablecoins [pdf]
#676Earlier quoted context omitted.
Even less than people want to hear that gold is just shiny dirt, people don't want to hear that almost all perceptions of value are inherently subjective and meaningless. That social credit, and money, and everything we hold dear and true is just narrative we've crafted around ourselves to cope with the uncaring void that is the cosmos. So -- my guess -- people are probably going to keep thinking that things are valu…
Where do you get that people “don’t want to hear” this? I find it’s a tedious revelation that people seem to love having. Yes, things are only valuable if people believe they’re valuable. Deep. So what though?
So every emotion except confusion is inherently just a person over-simplifying their reality.
All the fighting: it's fucking stupid.
Re: Report on Stablecoins [pdf]
#677Earlier quoted context omitted.
AIUI, the negative-sum game breaks down like this: consider a black box around the entire bitcoin ecosystem. This black box is consuming $20B/year worth of real resources, which (given that you can't generally buy electricity or generation assets with bitcoin) means $20B/year is flowing out of it. Now to be sure there are some customers of the bitcoin system, using bitcoin as an intermediary to move money across bord…
You mentioned transaction fees, the other is "inflation" or mined coins. As mentioned above, this is the same as gold and many other things. I guess it is just a matter of definition if you want to say that is a negative sum game. It is not unique to bitcoin though.
It's important to realise that when I'm talking about transaction costs I'm not referring to the inbuilt transaction fees in the protocol - those are bitcoin-denominated and so are an internal transfer within the ecosystem (likewise for the block rewards).
I'm taking about examples like when someone uses bitcoin to transfer money, by converting an external currency into bitcoin, sending the bitcoin somewhere then converting it back into an external currency. Whatever loss of value they see from that overall transaction has been transferred into the bitcoin system as a whole.
Re: Report on Stablecoins [pdf]
#678Earlier quoted context omitted.
Please show me a real world use case that's better than the status quo and is not speculation or gambling. It's been over 12 years and I'm still looking. Cryptoclowns can't use the it's too early excuse anymore. But they choose to listen to a handful of man children running around promising world peace via a distributed database.
Money transfers across borders. I have friends who live internationally and crypto has become our defacto way to transfer money. But frankly, your presentation of the question leaves me doubtful you are looking for a meaningful answer here. The reality, as others have pointed out, is that there are lots of platforms in the space offering plenty of compelling services. You personally may not desire those services, but…
If I was presenting the question more completely, I would have included financial fraud alongside speculation/gambling, which is exactly what you're doing by sending $ across borders without AML/Forex regulatory checks on the txn.
Re: Report on Stablecoins [pdf]
#679Earlier quoted context omitted.
No there won’t be a big long term correction from Tether because there are dozens of other stable coins now for people to temporarily sell into. There’s also the ability to short crypto and buy puts on crypto. All of that provides ways for speculators, investors, middle class savers, and early technology adopters to stay in the game. You’re like a doomsday predictor that will never see a doomsday happen. No real valu…
The Quito stock exchange consists of over 300 companies in farming, forestry, power generation, medical care etc. They have physical and human capital and earn profits from their paying customers, whether or not people want to buy stocks which offer them a share of this profit The AAVE platform consists of individuals lending recently printed tokens to each other to buy other recently printed tokens in what is essent…
You could make the same argument about any number of over valued VC funded startups.
Re: Report on Stablecoins [pdf]
#680From a Coinbase exec: "Tether is a ticking time bomb. Whenever it goes off, it'll be a 70-80% market correction for 2-3 years" Crypto continues to help nobody and achieve nothing in the real world. This administration has been criminally slow in shutting it down, lobby is strong.
I run a globally, distributed company funded solely operated based on smart contracts and cryptocurrency/equity. We got 50 investors from around the world. Most of hackernews is exclusively focused on the United States, which is a very limited point of view. Try travel and see other parts of the world and you might understand it better.
Crypto as a fundraising mechanism is an existential risk to YC and its peers.
Explains the constant bullshit you see on this forum whenever crypto is mentioned.