when you're anxiously waiting for tether to gox the whole market and their critical announcement is ... not that bad
Tether Critical Announcement
81–90 of 327 posts
Re: Tether Critical Announcement
#82Earlier quoted context omitted.
This also illustrates the absurdity of so called "money laundering". Just moving money around between private parties is somehow a serious crime. Hint: It's not. Money laundering is just a cheat code for prosecutors to get easy points when they can't actually find real wrongdoing. The funny part is that Tethers came into being after Bitfinex was hacked, right, as a way to help them out? Sometimes we say after someone…
moving money around without record-keeping to prove it wasn't criminally obtained is a serious crime.
We know. The point was that it's malum prohibitum (a crime because it's forbidden), not malum in se (evil by itself). [1]
Re: Tether Critical Announcement
#83I 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 solving this since they have fiat trading pairs for each trusted exchange on their network. In the future that could mean issuance from hundreds of banks.
Here is the paper if anyone is interested: https://www.gogreenmango.com/whitepapers/Bitcoin-Volatility-...
Re: Tether Critical Announcement
#84Earlier quoted context omitted.
Could you go into more detail on what happened to Mt. Gox during final months?
I suppose I could: https://news.ycombinator.com/item?id=7304479 The short version: Mt. Gox stopped paying out USD-denominated claims, because (as was correctly perceived by many people) they were insolvent. They continued paying out BTC-denominated claims. The only way to get value out of Mt. Gox was to either go through yen (which the vast majority of customers couldn't do [0]) or buy Bitcoin and withdraw, which cau…
Can you explain how this would be "good for Bitcoin" though?
Didn't the price crash after the extreme rise? Or was this because the BTC was stolen and unrelated to the USD insolvency? Was the "good for BTC" tongue in cheek?
Re: Tether Critical Announcement
#85If 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…
> Bitfinex has an order book filled with something people want. A way to get access to that orderbook is to say "Bitfinex, I want some tether, how do you sell them to me if you can't accept a wire?" Bitfinex might say "Are you a trustworthy US VC? Spiffy. Move $20 million from your left hand pocket to your right hand pocket. The right hand pocket is now ours; here's $20 to $21 million in Tether, which are good for BTC at your favorite exchanges. At some time in the future, a trustworthy US VC other than yourself is going to ask you to buy some tether from them at par value. You will do that, and pay them from your right pocket. If a regulator asks you about this transaction, you bat your eyes and say 'Oh, sophisticated investors doing a cryptocurrency transaction, nothing to see here.'"
I feel like I'm missing something here -- doesn't the first VC end up with more in tether than the right-pocket money?
Re: Tether Critical Announcement
#86Earlier quoted context omitted.
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.
It's time for a new kind of bank - a transparent bank. Exchanges could publish a daily report of their bank account balances for each currency along with a daily message signed by each cold-storage key. And the transparent bank would publish a daily record of balances for each account, which ties out to the bank's balance sheet. We wouldn't need to rely on historical audits, because we could do our own automated audi…
Or we could just create a globally shared auditable ledger on which we could record transactions and balances... The bigger point here is that Tether and the issues here are not crypto problems but rather traditional money problems. When enough people just accept crypto like BTC or ETH the need for Tether, as well as USD goes away. We are just now in a transition period.
Re: Tether Critical Announcement
#87Earlier quoted context omitted.
Who gave them all that USD? Where are they keeping it? They've been shunned by their US banking partners. They've basically been printing Tethers 50m at a time. The only thing they've released which attempted to show that they actually had the USD was something they called an "audit" which explicitly said "this is not an audit" [0] on the second page. When you go to withdraw from Tethers it basically says "if you don…
> When you go to withdraw from Tethers it basically says "if you don't have more than $50k in claims, go away" [1]. Suffice it to say that most of their customers don't have that. This is not how most people redeem tether, they go to any of a wide range of exchanges (kraken, poloniex, bittrex, etc) and trade whatever amount (from a dollar or whatever the minimum trade amount is).
Do you not see that inability to redeem for Dollars (AND the fact that most people aren't doing this but rather pumping these so-called-$-backed-tokens into other cryptos) could potentially be catastrophic if they were created without organic investment? They would literally be fake money priced at $1 buying $1 of BTC.
It is the definition of inflation: increased money supply. Except it's priced in $, which hasn't actually inflated. So if the bubble pops and the money is found to be fraudulent, then it equates to money supply shrinking. Artificial demand removed..
Re: Tether Critical Announcement
#88If 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…
> Bitfinex has an order book filled with something people want. A way to get access to that orderbook is to say "Bitfinex, I want some tether, how do you sell them to me if you can't accept a wire?" Bitfinex might say "Are you a trustworthy US VC? Spiffy. Move $20 million from your left hand pocket to your right hand pocket. The right hand pocket is now ours; here's $20 to $21 million in Tether, which are good for BT…
>I feel like I'm missing something here -- doesn't the first VC end up with more in tether than the right-pocket money?
Well, yeah. People don't just participate in schemes without getting "paid" for it.
Re: Tether Critical Announcement
#89If 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…
Isn't the "having access to USD" part of their dollar-backing credible as long as they can buy or sell dollars in the global market?
How do we verify they USD exists? Trust them? In their terms they state that there's no guarantee that they're redeemable for USD. The whole debate depends on whether the USD exists or not.
Certainly you won't believe it does without some strong verification right?
Re: Tether Critical Announcement
#90Earlier quoted context omitted.
has anyone checked to see if this money has already spread to downstream addresses? It's possible the damage is already done and exchanges have accepted money from the poisoned address.
Check yourself. It has not moved yet: http://omniexplorer.info/lookupadd.aspx?address=16tg2RJuEPtZ...
Thanks for the link, very useful for those of us who don't really know what to do with addresses posted in these stories.