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An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange

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Re: An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange

#91

Post by empath75 »

mancerayder wrote: post #84

Can anyone with a more studied background in economics help hypothesize the after-effects on Bitcoin and other altcoins if this 814M 'digital counterfeiting' for lack of a better term, is true? For example, 800M has been artificially pumped into the Bitcoin and general crypto ecosystem, like air in a bicycle tire. And this is a game theory sort of question, too: If this is true: now, what?

If people want to pull dollars out of bitfinex, and can't redeem tethers, then the price of bitcoin will skyrocket on bitfinex due to tether hyperinflation (we're probably already seeing that, and have been for months). People will be buying bitcoin at basically any price on usdt denominated exchanges, and start moving them to other exchanges to sell. At that point, you'll start to see price differences between usdt and usd exchanges, as the bitcoin price skyrockets up on bitfinex and drops on gdax.

Probably at some point, bitfinex will become insolvent and shutdown withdrawals entirely. Not sure what will happen then-- probably the price of bitcoin collapses in a general panic.

Re: An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange

#92

Post by mancerayder »

koolba wrote: post #87

> Neither Tether nor Bitfinex disclose on their websites or in any public documents where they’re located or who’s in charge, but information is available elsewhere. > Jan Ludovicus van der Velde is CEO of both Bitfinex and Tether, Torossian said by email on Dec. 3. A LinkedIn page for someone named J. L. van der Velde, who identifies himself as Bitfinex’s CEO, says he speaks Dutch, English, German, Italian and Chine…

Well, they're also on the regulatory radar, now, almost certainly. Now if they try to run off, that turns into a fugitive-like situation versus a potentially just oops-type one. There's a lot of leeway for business fuckups in most jurisdictions. Although in this case, there seems to be a strong case for fraud, so who knows.

Re: An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange

#93

Post by mancerayder »

empath75 wrote: post #91
mancerayder wrote: post #84

Can anyone with a more studied background in economics help hypothesize the after-effects on Bitcoin and other altcoins if this 814M 'digital counterfeiting' for lack of a better term, is true? For example, 800M has been artificially pumped into the Bitcoin and general crypto ecosystem, like air in a bicycle tire. And this is a game theory sort of question, too: If this is true: now, what?

If people want to pull dollars out of bitfinex, and can't redeem tethers, then the price of bitcoin will skyrocket on bitfinex due to tether hyperinflation (we're probably already seeing that, and have been for months). People will be buying bitcoin at basically any price on usdt denominated exchanges, and start moving them to other exchanges to sell. At that point, you'll start to see price differences between usdt…

Bittrex also uses USDT as their base, though.

And I don't know who else. I think this is bigger than Bitfinex.

Re: An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange

#94

Post by brndnmtthws »

lawlessone wrote: post #69
brndnmtthws wrote: post #25

Earlier quoted context omitted.

Feel free to troll through my internet presence. There's a link to my bio in my HN profile. I have never used Bitfinex, and do not own any USDT.

All bitfinex has to do is prove they have the money. but they can't do that.

They have publicly refuted the claims, but people are still running around with pitchforks.

Re: An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange

#95

Post by paulcole »

trqx wrote: post #86
slazaro wrote: post #8

WARNING: Auto-playing video with possibly loud sound.

"do not link sites with autoplay videos" should be added to the guidelines imo. When I encounter interesting articles on such anti-user sites, I don't bother browsing the site, I use a script to extract the article and rehost it on a public pastebin. I'd rather avoid them at all, and that wouldn't even be necessary if everyone used atom/rss feeds. see example for this one: https://0x1a4.1337.cx/o_27/ You can blacklis…

Watch the ad. If you want to read the article it’s the cost of doing so. Otherwise don’t read it.

Re: An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange

#96

Post by 659087 »

brndnmtthws wrote: post #80
_jal wrote: post #75

Earlier quoted context omitted.

Just so that I'm clear: - Skepticism about the tether reserves is FUD, - meaning that we should believe it is there. - But we cannot ask for proof of an easily verifiable claim that the money exists, because certainty that it exists is a trade secret. Is this an accurate reflection of your position?

I'm merely pointing out that the majority of the fear surrounding this issue seems to originate from one person with an axe to grind.

In other words, "let's ignore the message and shoot the messenger"?

Re: An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange

#97

Post by goialoq »

greenleafjacob wrote: post #53
thisisit wrote: post #49

Aside from the discussion on Tethers I am sure this is not going to stop cryptocurrency buffs from talking/selling another round of "stable" coins. The unfortunate thing is time and again same old story is presented about either: how the company releasing the coins will act as lender/buyer of last resort or how "markets" will prevent the peg from going out of whack. The former logic forgets about how it puts a lot of…

> how "markets" will prevent the peg from going out of whack. One only needs to read about Long-Term Capital Management to see how flawed this is.

"_Long-Term_ Capital Management": established 1994, collapsed 1998. It's like the "_People's_ _Republic_ of China" or the "Union of Soviet _Socialist_ _Republics_" of "fake it till you make it" names.

Re: An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange

#98

Post by StavrosK »

imglorp wrote: post #89
StavrosK wrote: post #68

Earlier quoted context omitted.

Yes, but I do want YouTube and other sites to autoplay.

There's also addons that let you remember a choice per site. https://addons.mozilla.org/en-US/firefox/addon/disable-autop...

That's a great idea (especially disabling preloading as well). Unfortunately, it doesn't seem to actually do anything on FF 58.

Re: An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange

#99

Post by goialoq »

down wrote: post #58

all the "safeguards" the financial instruments have, didn't stopped them from crashing the economy in 2008, bitcoin is actually a response to that, I did lost my job then and had quite a hard time, now the same bankers tell me what is fraud and what is not. In my country banks moved away from their social propose lending, and they just take high commissions for everything (eg. ATM commission for seeing how much I hav…

If you had securities investments in 2008, your money is fine, as long as you held it for a few years before or after 2008. Only if you cashed out stocks in 2009 or sold your last house in 2010 would you be hurting.

For the larger economy, there's no reason to expect Bitcoin would promote general economic health/growth more than national fiat currency.

Re: An $814M Mystery Near the Heart of the Biggest Bitcoin Exchange

#100

Post by sailfast »

This whole discussion reminds me of the Argentine peso. Pegged to the dollar, economy slumps, harder and harder to back with actual dollars, then government decides to float the currency.

US did this moving off the Gold standard as well. I guess these backing commitments are useful for some stability? But it won't entirely eliminate risk, so instead of relying on the wild swings of the market you're now relying on a single institution's trustworthiness / solubility.

Take the risk you're willing to accept and hedge the others? A market for all kinds I guess! Either way, this model feels like it's already been run at scale a few times.

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