It amazes me how many people are blissfully unaware of the rampant tether fraud
128 comments
The fact that Tether even counts as "crypto" shows that "crypto" is not about trustless decentralization, but about get-rich-quick schemes and money laundering. The entire value of Tether depends on putting blind trust in a private company issuing it.
I wouldn’t say tether shows that trustless decentralization is irrelevant. Rather, the existence of tether proves the need for stable coins. What was interesting about LUNA is the attempt to create an unbacked stable coin. That would have been a true innovation had it worked.
Tether is decentralised in the sense that other stable coins can compete. In reality though a basket of even multiple of these coins would still feel too risky to me. Especially as I am already eating inflation on it! And banks can pay interest now.
Just like the USD then, you can take Yuans if you dare, freely. I live in Hong Kong where we all have multi currency accounts, and for me currencies dont feel centralized at all.
yes "crypto" is a scam. Bitcoin is the revolution.
And Bitcoin Cash is Bitcoin.
BCH is another well-positioned scam, that you have unfortunately fallen for.
It's the real bitcoin. Unfortunately that is more difficult to understand than a simple name.
People understand what you mean they just don't agree with you...
pornel(1)
I’m a long-time cryptocurrency “enthusiast” you might say, but I’ve been out of those circles since Bitcoin was <$1k. I still buy a bit every pay period but don’t do anything with it other than transfer it to cold storage periodically.
The whole community changed about the time Bitcoin hit $1k. Prior to that there were a lot of idealists around and a handful of “investors”. There were Ponzi schemes, but they were literally labeled “Ponzi schemes”, so no real harm was done. Since then, the proportions have flipped: the vast majority of people are “investors”, there’s a seemingly equal small number of idealists and scammers, and with few exceptions there’s not really anything exciting in the works that I know of.
I miss the old days :(.
FWIW, I still think cryptocurrencies will outlast all existing government-backed fiat currencies. The difference is that I don’t think it’s going to happen on any predictable timeframe.
The whole community changed about the time Bitcoin hit $1k. Prior to that there were a lot of idealists around and a handful of “investors”. There were Ponzi schemes, but they were literally labeled “Ponzi schemes”, so no real harm was done. Since then, the proportions have flipped: the vast majority of people are “investors”, there’s a seemingly equal small number of idealists and scammers, and with few exceptions there’s not really anything exciting in the works that I know of.
I miss the old days :(.
FWIW, I still think cryptocurrencies will outlast all existing government-backed fiat currencies. The difference is that I don’t think it’s going to happen on any predictable timeframe.
>I miss the old days :(.
There were no "old days".
0.0000001 femtoseconds after the bitcoin white paper dropped describing it, in the first sentence, as a peer-to-peer digital cash replacement the cryptobros descended-- hyping up the "smash the banksters" and "reject the fed" narrative in order to bilk gullible people out of their actual cash.
While muttering "arrrrrbitraaaaaaaaaaaaaage" in their sleep, they dreamed of setting up exchanges hoping to out-bankster the banksters at their own game.
With a dictionary in their left hand and and a YouTube playlist of investing videos in their right they quickly learned to frame crypto not as a "digital cash" but as a security, an investment, a lifestyle, a social statement, a religion. A crusade.
But it has always been, and will always be, a tool for allowing first-movers to scam the information-poor.
And I'm saying this as someone who received actual, entire, bitcoins from faucets and mined actual, entire bitcoins on my Radeon HD 6970.
There were no "old days".
0.0000001 femtoseconds after the bitcoin white paper dropped describing it, in the first sentence, as a peer-to-peer digital cash replacement the cryptobros descended-- hyping up the "smash the banksters" and "reject the fed" narrative in order to bilk gullible people out of their actual cash.
While muttering "arrrrrbitraaaaaaaaaaaaaage" in their sleep, they dreamed of setting up exchanges hoping to out-bankster the banksters at their own game.
With a dictionary in their left hand and and a YouTube playlist of investing videos in their right they quickly learned to frame crypto not as a "digital cash" but as a security, an investment, a lifestyle, a social statement, a religion. A crusade.
But it has always been, and will always be, a tool for allowing first-movers to scam the information-poor.
And I'm saying this as someone who received actual, entire, bitcoins from faucets and mined actual, entire bitcoins on my Radeon HD 6970.
I heard someone from "a16z" describe cryptocurrencies as a "digital asset class".
Um, what?
That kind of talk flips bozo bits.
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I'm pretty sure it was this episode. (Totally not worth listening to.)
A Crypto Optimist and a Crypto Skeptic Walk Into a Podcast Studio The Ezra Klein Show
https://www.stitcher.com/show/the-ezra-klein-show-2/episode/...
Um, what?
That kind of talk flips bozo bits.
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I'm pretty sure it was this episode. (Totally not worth listening to.)
A Crypto Optimist and a Crypto Skeptic Walk Into a Podcast Studio The Ezra Klein Show
https://www.stitcher.com/show/the-ezra-klein-show-2/episode/...
I'm a fan of the ezra klein show, but this is probably the worst episode. I vaguely remember a torrent of nonsense from someone whose job it is to make cryptocurrency sound good with basically no pushback.
Agreed; mosdef.
IMHO, the rebuttal episode w/ Dan Olson, 6 months later, was spot on:
The Most Thorough Case Against Crypto I've Heard https://www.stitcher.com/show/the-ezra-klein-show-2/episode/...
IMHO, the rebuttal episode w/ Dan Olson, 6 months later, was spot on:
The Most Thorough Case Against Crypto I've Heard https://www.stitcher.com/show/the-ezra-klein-show-2/episode/...
Yep, here's[0] Hal Finney describing how rentier-ism was built into the network that he worked out just as it was released.
[0]: https://www.metzdowd.com/pipermail/cryptography/2009-January...
[0]: https://www.metzdowd.com/pipermail/cryptography/2009-January...
Not really. Some cryptos have their uses.
Really? what's your bitcoin address? can you sign a proof?
Kidnapping early bitcoiners is happening more and more. I'm fully out of that now, but if I weren't, I would be keeping it a secret from everyone.
I'm relieved you got out of the kidnapping business.
The work life balance really isn't the best. It's pretty lonely, and any friends you do make always are short lived.
The probability that the Internet and supporting infrastructure remains stable and available in a world in which government fiat, or even just USD, stop existing is virtually zero, rendering cryptocurrency worthless in every sense of the word.
Specific governments - even all existing ones - are likely to fall before electronic networking.
Not stable, persistent, global networking, which is absolutely mandatory for cryptocurrency to function.
Ad hoc local networking may still exist sporadically in a world in which the USD or fiat in general completely collapses, but that's woefully inadequate for supporting cryptocurrency usage.
It also completely defeats the point of decentralization and trust less transactions. If an isolated community is ad hoc networking, they are, by definition, centralized, and extremely likely to be a high trust community. It's much more likely they have a far better means of transacting with one another.
Ad hoc local networking may still exist sporadically in a world in which the USD or fiat in general completely collapses, but that's woefully inadequate for supporting cryptocurrency usage.
It also completely defeats the point of decentralization and trust less transactions. If an isolated community is ad hoc networking, they are, by definition, centralized, and extremely likely to be a high trust community. It's much more likely they have a far better means of transacting with one another.
> FWIW, I still think cryptocurrencies will outlast all existing government-backed fiat currencies. The difference is that I don’t think it’s going to happen on any predictable timeframe.
Nothing about this prediction gives Bitcoin any value. If you/early buyers hoard it all, that means starting a new chain is less effort than buying it from you. There isn’t scarcity here, let alone use value.
(Read “blockchain” as “Google Docs spreadsheet” and “Bitcoin wallet” as “spreadsheet cell”.)
Nothing about this prediction gives Bitcoin any value. If you/early buyers hoard it all, that means starting a new chain is less effort than buying it from you. There isn’t scarcity here, let alone use value.
(Read “blockchain” as “Google Docs spreadsheet” and “Bitcoin wallet” as “spreadsheet cell”.)
Bitcoin will have value as long as it is exchanged. For example overseas transfers are often abusive.
I agree with your first statement about hoarding by early buyers.
However, the smug "write-only database meme" is getting a bit old. Cryptocurrencies, and even other crypto-payment systems (e.g. chaumian cash) obviously have different characteristics than centralized money. Come to think of it, you could just mockingly describe any computer program that has structured data as a database.
Cryptocurrency has almost nothing to do with databases or storing data. At its core, cryptocurrency is a system of distributing signed transactions that uses hashcash as a sybil-resistance and (order) synchronisation mechanism.
Google spreadsheets need not apply. The whole point is that you don't require a single party to sign transactions. The problem that cryptocurrency deals with concerns co-operation between adversarial parties. Centralization leaves you hopping from platform to platform forever.
However, the smug "write-only database meme" is getting a bit old. Cryptocurrencies, and even other crypto-payment systems (e.g. chaumian cash) obviously have different characteristics than centralized money. Come to think of it, you could just mockingly describe any computer program that has structured data as a database.
Cryptocurrency has almost nothing to do with databases or storing data. At its core, cryptocurrency is a system of distributing signed transactions that uses hashcash as a sybil-resistance and (order) synchronisation mechanism.
Google spreadsheets need not apply. The whole point is that you don't require a single party to sign transactions. The problem that cryptocurrency deals with concerns co-operation between adversarial parties. Centralization leaves you hopping from platform to platform forever.
A blockchain is a kind of transaction log, but if you evaluate all the transactions you get a database at the end.
A Google Docs spreadsheet also has a transaction log (a CRDT) while you have it open to do the updates. (Well, I assume it does, anyway.) Of course the security models are different, but you could say the log is a dual of the database.
A Google Docs spreadsheet also has a transaction log (a CRDT) while you have it open to do the updates. (Well, I assume it does, anyway.) Of course the security models are different, but you could say the log is a dual of the database.
But this resistance is against a problem it creates: yes if all your stakeholders are anonymous and distributed you cannot trust them, but why not make a network of licensed operators you can trust ? Like I dunno, a savings account with international bank transfers...
The need for trust increases risk. Higher risk is higher cost.
breaking the monopoly of govt-controlled money, one of my dreams.
The Bitcoin SV people are the only idealists left.
Who isn't aware of it?
The question is are you willing to short it? I've been expecting Tether to collapse for 3-4 years now. Had I shorted it back then (it costs about 12% to borrow last I checked), I'd be out a lot of money.
The question is are you willing to short it? I've been expecting Tether to collapse for 3-4 years now. Had I shorted it back then (it costs about 12% to borrow last I checked), I'd be out a lot of money.
This "why don't you short it"-meme is stupid.
If the broker have the money you sold the loan for as collateral for the loan, in their controll, they will keep your money if they collapses or in general scam you. They probably did not even sell the cryptocoins in the first place and just makes up the balance you have.
Shorting is very risky even if you time it perfectly.
Where I live it is not even legal for me to do it.
If the broker have the money you sold the loan for as collateral for the loan, in their controll, they will keep your money if they collapses or in general scam you. They probably did not even sell the cryptocoins in the first place and just makes up the balance you have.
Shorting is very risky even if you time it perfectly.
Where I live it is not even legal for me to do it.
Ultimately it's a false dichotomy. Tether can be a scam and have enough assets to back each USDT with a dollar. They've had a massive interest free loan for half a decade in a (until recently) huge bull market. You'd have to try really hard for there to be a significant shortfall.
It's hard to time the end of delusion and/or the speed of government bureaucracy
As they say, markets can stay irrational longer than you can stay solvent.
Exactly. I'm very pro-ethereum tech but still think it's been overpriced for some time. I "shorted" (via compound borrow/leverage) some and am still waiting for it to go down . Around $600 I feel is the correct price, i would close my positions at $800.
But even with all the crap that's been happening, it doesn't go sub $1000... I'll keep waiting.
But even with all the crap that's been happening, it doesn't go sub $1000... I'll keep waiting.
The effect of Tether was to massively inflate the price of crypto so as to suck in more dollars(even if they despise fiat currency). It's an unbelievable fraud and I'm somewhat surprised that it is tolerated considering how strict laws in other areas are(gambling for example)
You say that many people are unaware but I would say that many are perfectly fine with the imaginary riches these schemes provide.
You say that many people are unaware but I would say that many are perfectly fine with the imaginary riches these schemes provide.
The NY AG was unable to shut them down but they are banned from doing any business with US customers, directly at least.
If Tether are committing massive fraud, and it may be true, it will eventually collapse. Truth is, I don't know how, but they've been incredibly resilient so far.
If Tether are committing massive fraud, and it may be true, it will eventually collapse. Truth is, I don't know how, but they've been incredibly resilient so far.
Not too amazing to me.
Fraud is a crime, defined by a statute, with case law, and police and a prison system to enforce it.
Crypto folks don't really believe in governance, the state, regulation, accountancy, and all that stuff.
For many folks, the whole point of crypto is to opt out of the whole government, state, regulation system, with its strange rules like "fraud" and all the rest.
Fraud is a crime, defined by a statute, with case law, and police and a prison system to enforce it.
Crypto folks don't really believe in governance, the state, regulation, accountancy, and all that stuff.
For many folks, the whole point of crypto is to opt out of the whole government, state, regulation system, with its strange rules like "fraud" and all the rest.
I agree with this.
However there are things that could constitute fraud for all of us.
However, the whole govt. system is a fraud IMHO in Spain at least. I just want them the further, the better.
However there are things that could constitute fraud for all of us.
However, the whole govt. system is a fraud IMHO in Spain at least. I just want them the further, the better.
Government is theft by definition. They get your money just because they have guns and you're going to jail.
I don't think most crypto projects are fraud. I don't think most ponzi schemes are fraud. They're just terribly poor investments and people who are too stupid to understand or people who want to gamble their money hoping the greater fool will pay, fall into it.
I know people who got rich with crypto shitcoins, I know people who got rich with MLM schemes. I never joined any.
Crypto is a technical solution to a political problem: governments own you, can do virtually whatever they want and they can print money at will. You won't solve a political problem with tech, even if the tech is really ingenious.
I don't think most crypto projects are fraud. I don't think most ponzi schemes are fraud. They're just terribly poor investments and people who are too stupid to understand or people who want to gamble their money hoping the greater fool will pay, fall into it.
I know people who got rich with crypto shitcoins, I know people who got rich with MLM schemes. I never joined any.
Crypto is a technical solution to a political problem: governments own you, can do virtually whatever they want and they can print money at will. You won't solve a political problem with tech, even if the tech is really ingenious.
>theft by definition
Enforced by death threat. People forget in our comfortable 1st world that if you resist the demands of your government long or loud enough eventually the will dispatch SWAT police or military to take care of you. Both which are authorized to kill you if you resist.
Enforced by death threat. People forget in our comfortable 1st world that if you resist the demands of your government long or loud enough eventually the will dispatch SWAT police or military to take care of you. Both which are authorized to kill you if you resist.
This whole idea of decentralized finance—This idea that crypto currencies will be so ubiquitous that world powers will just have to roll over to them. That is so stupid. That would never happen, and why should you want it to happen? Why would you want to abandon the Keynesian tools of the central bank? Why would you not want an intermediary who could step in during a dispute and give you a refund? I just don’t get it. It’s like the lust for money just completely takes over and changes your view of the future.
I guess I can’t criticize. I’ve gotten all gung ho about XR since meta crashed and I scooped a few shares. But at least that company is a productive enterprise, low P/E, real prospects for the future, etc.
I guess I can’t criticize. I’ve gotten all gung ho about XR since meta crashed and I scooped a few shares. But at least that company is a productive enterprise, low P/E, real prospects for the future, etc.
I attribute what is going on right now with inflation and exhorbently high home prices to Keynesian economics, particularly the central banks policy during covid. I don't believe this system works for the people. It serves corporations.
I am genuinely curious why you have such faith in this system.
I am genuinely curious why you have such faith in this system.
Because it saved us from ruin during the financial crisis, and signs are showing cooling inflation with the tools in place now
Homes are at the most unreasonable price ever. Mass Layoffs are starting to happen for high paying jobs. Gas and oil will go back up now that the petroleum reserves are depleted. Prices on everything have increased dramatically.
What exactly has this saved us from?
What part of this was worth it to you?
One CPI report below expectations, at 7.7% mind you nothing to snivel at, is not a trend that this is letting up.
What exactly has this saved us from?
What part of this was worth it to you?
One CPI report below expectations, at 7.7% mind you nothing to snivel at, is not a trend that this is letting up.
The economy goes up and down. That’s normal. It’s been that way since the history of commerce.
And why wouldn't such systems be build up from ground up if they were adopted. I'm pretty certain that big players that is nation states would not take Bitcoin or Ethereum. But instead launch new one.
Ofc the greed blinded them, look even you cant resist pushing a random stock completely out of context.
Crypto democratized penny stock gambling.
Crypto democratized penny stock gambling.
I don't know a single knowledgable IT person who is into cryptocurrencies (and all of them were curious in the beginning).
This might also be why people like them and me just ignore most discussion about cryptocurrencies. It is not my job to convince idiots that what they are doing is stupid and they lie to themselves because they already invested a lot of time and money into this.
But that also means in any cryptocurrency-discussion you will always hear those invested people and rarely people like you and me. This distorts the picture of course.
This might also be why people like them and me just ignore most discussion about cryptocurrencies. It is not my job to convince idiots that what they are doing is stupid and they lie to themselves because they already invested a lot of time and money into this.
But that also means in any cryptocurrency-discussion you will always hear those invested people and rarely people like you and me. This distorts the picture of course.
Not knowledgeable:
https://scholar.google.com/citations?user=M93Auk4AAAAJ&hl=en
https://people.csail.mit.edu/silvio/
https://www.semanticscholar.org/author/Steven-Goldfeder/2642...
3 different founders of startups working in crypto.
https://scholar.google.com/citations?user=M93Auk4AAAAJ&hl=en
https://people.csail.mit.edu/silvio/
https://www.semanticscholar.org/author/Steven-Goldfeder/2642...
3 different founders of startups working in crypto.
I still don't know them personally so I cannot judge whether they involve themselves in crypto because they are... ethically flexible.. and in it for the money or whether they truly have a rationale why this a useful way forward for society.
As far as the latter goes, I have yet to hear a vision of a crypto-currency-future that not the wet dream of a neo-liberal born-into-riches person or the wet dream of someone doing scams and selling illegal stuff habitually.
I mean they are trying to replace currency systems that have been around since thousands of years, so you better have more going on than "it is on computers" and "I know/am the person who is in control of the system" or "I know/am the person who invested a ton into this so it must work".
As far as the latter goes, I have yet to hear a vision of a crypto-currency-future that not the wet dream of a neo-liberal born-into-riches person or the wet dream of someone doing scams and selling illegal stuff habitually.
I mean they are trying to replace currency systems that have been around since thousands of years, so you better have more going on than "it is on computers" and "I know/am the person who is in control of the system" or "I know/am the person who invested a ton into this so it must work".
Similar, I know lots of people who were interested & curious, but none who are now involved. That's a small sample, but it's what I see.
> the same people who own Binance, the world's largest crypto exchange own Tether
Do you have a source for this? Because Binance has its own stablecoin (BUSD)…I think the correct exchange is Bitfinex, not Binance
Do you have a source for this? Because Binance has its own stablecoin (BUSD)…I think the correct exchange is Bitfinex, not Binance
Correct. Also, BUSD is run by Paxos.
>Tl;Dr: Paxos issues something called BUSD on Ethereum, which is regulated. Binance issues something that's kinda sorta related but not really, that's fully unregulated, only usable in their private chain, ALSO called BUSD, that is just monopoly money. They happen to have the same name, but hey, you fell for it!
>Related quote from the link:
>"Paxos issues two US dollar-backed stablecoins – Pax Dollar (USDP) and Binance USD (BUSD) – that are overseen by the NYDFS. These two tokens are very similar in design and reserve operations because they are regulated. Paxos and NYDFS agreed to the terms of the token in advance of issuing – this includes the stipulation that USDP and BUSD only be issued by Paxos on the ethereum blockchain at this time.
>Our marketing partner for BUSD – Binance – issues a token on its BNB smart chain called Binance-Peg BUSD ... Note that Binance-Peg BUSD is strictly a Binance product; it is not issued by Paxos nor regulated by the NYDFS."
> https://paxos.com/2022/04/07/busd-issued-by-paxos-on-ethereu...
[1] https://news.ycombinator.com/item?id=33540628
>Related quote from the link:
>"Paxos issues two US dollar-backed stablecoins – Pax Dollar (USDP) and Binance USD (BUSD) – that are overseen by the NYDFS. These two tokens are very similar in design and reserve operations because they are regulated. Paxos and NYDFS agreed to the terms of the token in advance of issuing – this includes the stipulation that USDP and BUSD only be issued by Paxos on the ethereum blockchain at this time.
>Our marketing partner for BUSD – Binance – issues a token on its BNB smart chain called Binance-Peg BUSD ... Note that Binance-Peg BUSD is strictly a Binance product; it is not issued by Paxos nor regulated by the NYDFS."
> https://paxos.com/2022/04/07/busd-issued-by-paxos-on-ethereu...
[1] https://news.ycombinator.com/item?id=33540628
this should be enough to discount nearly all of this FUD - a bunch of errors in the OP...
The issue is that the entire concept and sector is all scams and gambling. Every part of it, every nook and cranny.
There are literally no exceptions to this rule and no core kernel of something important and enduring that will remain when this all blows over.
Maybe some visible remnants will be visible here and there, in the sense that there’s still people that enjoy planting tulips now and then.
But really there’s nothing under it all, there’s no productive enterprise that has ever been created by the entire sector.
This isn’t just a rant it’s a direct answer to your question. The reason nobody cares about Tether, specifically, is because it’s not really notably distinguishable from any other part of the crypto “industry” in any meaningful way.
Nobody wants to believe it but it’s happening at a pretty predictable pace and by now the inflection point has clearly passed. It’s all going to zero and many key players are going to jail.
Some people who were savvy like the Coinbase guys will walk away permanently rich. Every dollar involved in making people rich from crypto, of course, will have come from those who lost money to this ultimately fraudulent craze, as at no time has anything of enduring value been created.
Every single one.
There are literally no exceptions to this rule and no core kernel of something important and enduring that will remain when this all blows over.
Maybe some visible remnants will be visible here and there, in the sense that there’s still people that enjoy planting tulips now and then.
But really there’s nothing under it all, there’s no productive enterprise that has ever been created by the entire sector.
This isn’t just a rant it’s a direct answer to your question. The reason nobody cares about Tether, specifically, is because it’s not really notably distinguishable from any other part of the crypto “industry” in any meaningful way.
Nobody wants to believe it but it’s happening at a pretty predictable pace and by now the inflection point has clearly passed. It’s all going to zero and many key players are going to jail.
Some people who were savvy like the Coinbase guys will walk away permanently rich. Every dollar involved in making people rich from crypto, of course, will have come from those who lost money to this ultimately fraudulent craze, as at no time has anything of enduring value been created.
Every single one.
You can use bitcoin etc to transfer money so maybe it's only 99% scams and gambling.
> It seems all anyone cares about with crypto is how much richer they get in dollar terms when cryptos go up.
As I reckon it, people haven't, on net, been getting richer from crypto since around March of 2021. That isn't the all time high of Bitcoin but so far it has set the high water mark. People in it for easy money have probably been flushed out of the market by now, the high-hype gains are long gone.
> It amazes me how many people are blissfully unaware of the rampant tether fraud and the effect it could have on the whole ecosystem.
Which people? These aren't people on HN. I haven't seen anyone here who is unaware of what is going on.
As I reckon it, people haven't, on net, been getting richer from crypto since around March of 2021. That isn't the all time high of Bitcoin but so far it has set the high water mark. People in it for easy money have probably been flushed out of the market by now, the high-hype gains are long gone.
> It amazes me how many people are blissfully unaware of the rampant tether fraud and the effect it could have on the whole ecosystem.
Which people? These aren't people on HN. I haven't seen anyone here who is unaware of what is going on.
>People in it for easy money have probably been flushed out of the market by now, the high-hype gains are long gone.
Need no fear, the users of r/cryptocurrency are still somehow filling that niche.
Need no fear, the users of r/cryptocurrency are still somehow filling that niche.
There are only two mistakes in joining a Ponzi scheme:
1. Coming late to the party
2. Getting caught
1. Coming late to the party
2. Getting caught
> The small amount of cash in the Ponzi runs out and the Ponzi collapses.
I think this is not actually what has been happening to bitcoin. Things like FTX books show that there's so much opportunity that surrounding ponzi schemes must emerge that don't actually buy in to bitcoin 1-1 despite the purchaser's belief, so bitcoin value is probably actually a lot lower than the demand at this stage, the resulting plunge has greatly accelerated its demise as a pyramid scheme.
In theory, I think bitcoin could have been as valid as any fiat currency but of a country that moves a lot of money in banking and has no other industry of its own. That seems to be the manifesto's thesis and its not really wrong.
Yet, as other mechanisms for transactions come online, designed to be more efficient to compete, they should take away a percentage of the finite number of transactions that are useful to the corresponding real economy, so any worldwide transaction networks value, like Visa and MasterCards value are nearer their highest possible value than their most likely future value.
I think this is not actually what has been happening to bitcoin. Things like FTX books show that there's so much opportunity that surrounding ponzi schemes must emerge that don't actually buy in to bitcoin 1-1 despite the purchaser's belief, so bitcoin value is probably actually a lot lower than the demand at this stage, the resulting plunge has greatly accelerated its demise as a pyramid scheme.
In theory, I think bitcoin could have been as valid as any fiat currency but of a country that moves a lot of money in banking and has no other industry of its own. That seems to be the manifesto's thesis and its not really wrong.
Yet, as other mechanisms for transactions come online, designed to be more efficient to compete, they should take away a percentage of the finite number of transactions that are useful to the corresponding real economy, so any worldwide transaction networks value, like Visa and MasterCards value are nearer their highest possible value than their most likely future value.
While your concerns may have some merit, your take here is a bit lazy. There are certainly some things about tether that could be done better, but it is far from the picture you are trying to paint here. They've been in the business since 8+ years, and have weathered many storms and done billions in redemptions. I don't know what kind of audit you are expecting, but they have certainly done a fair few[1]. They are also not related to Binance in any way.
But more importantly, talk is cheap. If you really believe in what you are saying, there are plenty of USDT futures available in crypto markets. Go ahead and short - if you are right, you'll win big, and the downside is fairly limited.
[1] https://tether.to/en/transparency/#reports
But more importantly, talk is cheap. If you really believe in what you are saying, there are plenty of USDT futures available in crypto markets. Go ahead and short - if you are right, you'll win big, and the downside is fairly limited.
[1] https://tether.to/en/transparency/#reports
Those are not audits, they're attestations.
They've been resisting being audited. I wonder why.
https://blockworks.co/tether-pushes-back-timeline-on-audit-r...
They've been resisting being audited. I wonder why.
https://blockworks.co/tether-pushes-back-timeline-on-audit-r...
> downside is fairly limited.
Since it's not going to $1.95 per Tether, the downside is just the cost of time. The poster can short it and blog about their journey while providing their pubkey to prove it.
Since it's not going to $1.95 per Tether, the downside is just the cost of time. The poster can short it and blog about their journey while providing their pubkey to prove it.
Redemption with who, may I ask: Alameda received 40% of all Tether issued: https://protos.com/tether-papers-crypto-stablecoin-usdt-inve...
Mind blown ?
Mind blown ?
Nice find, but wait, if they have/had 60B of Tether, how come they're bankrupt now?
[deleted]
It's because Alameda played the wrong bet: they liked the degen yield farming, got caught with a big hole once the musical chairs stopped (400M loan to Voyager, for instance), printed fake assets to reshore their finances, got caught by CZ who said fuck it, burn, I sell everything you ever gave me, and now whatever USDT they had is slowly being redeemed, but I dont know how much deltec can process.
Thank God, I guess, that they're neighbours in Nassau.
Thank God, I guess, that they're neighbours in Nassau.
Whats your point here, exactly?
that the next domino that will fall is USDT?
Pretty much everyone in crypto has done business with Alameda. That doesn't automatically make them insolvent.
rereead the article
its 40% of Tether issued on Tron
and you have to understand that Alameda was one of the licensced brokers of USDT. Institutions could mint USDT from Tether via Alameda by using dollars. This is not a loan. Its a 1:1 conversion.
its 40% of Tether issued on Tron
and you have to understand that Alameda was one of the licensced brokers of USDT. Institutions could mint USDT from Tether via Alameda by using dollars. This is not a loan. Its a 1:1 conversion.
Yup, 1:1 conversion: 1 USD fresh from the fed goes directly to sleep into deltec's savings account and a beautiful USDT is born.
This system is as pure and honest as the virgin mary and there's no way USDT could have been given against shaky IOUs.
This system is as pure and honest as the virgin mary and there's no way USDT could have been given against shaky IOUs.
I’ve struggled to find a straightforward way to short tether for those who live in the US. Got any pointers?
Not financial advice. Numbers are just examples.
0: Buy 10000 USDC with $10000
1: Deposit 10000 USDC on AAVE
2: Borrow 5000 USDT
3: Sell 5000 USDT for 5000 USDC
4: Wait for USDT to drop to $0.5
5: Buy 5000 USDT with 2500 USDC
6: Repay 5000 USDT and get back 10000 USDC
7: Profit: $2500
0: Buy 10000 USDC with $10000
1: Deposit 10000 USDC on AAVE
2: Borrow 5000 USDT
3: Sell 5000 USDT for 5000 USDC
4: Wait for USDT to drop to $0.5
5: Buy 5000 USDT with 2500 USDC
6: Repay 5000 USDT and get back 10000 USDC
7: Profit: $2500
While Tether seems quite iffy they have so far failed to collapse, keeping going through the 2017/18 crash without major issues. There isn't really proof that they don't have assets backing the tokens as they say they do.
The Bloomberg article "Anyone Seen Tether’s Billions?" was quite entertaining https://www.bloomberg.com/news/features/2021-10-07/crypto-my...
The Bloomberg article "Anyone Seen Tether’s Billions?" was quite entertaining https://www.bloomberg.com/news/features/2021-10-07/crypto-my...
I've thought about this a bit and my conclusion is similar. Basically that hodl needs to change or there will be a long"crypto winter." The idea of crypto is good but it has become a get rich scheme. No one not even millionaire's are trying to use crypto for anything and that has to change. Anyone with crypto needs to start spending it, maybe shoot for 10% of your total HODL amount? I was thinking how to sell it to the masses. HODL+SPEND?
I've started paying for online services where possible with my measly amount of crypto.
I've started paying for online services where possible with my measly amount of crypto.
Tether is used to route around the restrictions on leverage and money transfers in the US, and when it finally goes, Bitcoin will crash as most of the inflows into that market are through Tether.
tether is a mind blowingly large amount of money to siphon to just 13 people, a massive scam. its amazing.
To be fair, crypto as a technology has some merit. I think IPFS and Filecoin (Helium?), count for something more than a Ponzi scheme (as their primary goal is not simply being a store of value). It’s when crypto tries to replace all of finance buoyed by nothing other than people’s interest in crypto that stuff hits the fan.
Not really… it's too wasteful to operate.
There are alternatives to proof of work.
Do you mean proof of stake? The one where rich people decide?
[deleted]
I envy your carefree life.
About crypto, ask people, why appeared travel checks, and where they gone.
About crypto, ask people, why appeared travel checks, and where they gone.
The deeper problem is that even the major part of the whole modern financial system (be it IPOs or mortgage bonds etc) — turned into a giant casino.
Where nobody win in the long term except the casino.
And everybody is kinda okay with that.
Where nobody win in the long term except the casino.
And everybody is kinda okay with that.
everyone already knows, it’s a open secret kept by those who think they’ll benefit from the fraud
"cRyPTo" is a scam, focus on Bitcoin only.
If crypto is a scam, why isn’t Bitcoin also a scam? It’s the same technology right?
You asked the obvious question - you already know the obvious answer ... the only difference is bitcoin got there first and that scheme grew bigger than the other schemes.
glad you asked. only Bitcoin is really decentralized. i recommend this blog for further education: https://dergigi.com/
There is no universe where this is true. Not only are there verbatim clones of bitcoin, there are many variations with only tiny changes that have the exact same mechanics. Bitcoin at this point is unique because it was first and it is uniquely limited to the throughput of a dialup modem.
> Verbatim
Anyone can fork bitcoin, swap out icons, and change the genesis block. By definition, that is not "verbatim".
Your comment is like someone being angry that their WordPress site isn't as popular as WordPress.org.
Anyone can fork bitcoin, swap out icons, and change the genesis block. By definition, that is not "verbatim".
Your comment is like someone being angry that their WordPress site isn't as popular as WordPress.org.
The parent comment was saying bitcoin is the only decentralized cryptocurrency, which is ridiculous and has nothing to do with ledgers, it is about the mechanics of synchronization. If someone told you anything different than this, you might want to diversify your sources of information on how these things work. Saying bitcoin is the only decentralized cryptocurrency is like saying yahoo is the only website that exists.
I believe "only really decentralized" meant, where important components are concerned (minings, nodes, development, adoption, marketing, etc) bitcoin sets the standards and maintains a balance. Cant have a second immaculate conception where this particular template is concerned.
Again, nothing about what you are saying makes sense. Mechanics of the system and some mining dictate decentralization. Non mining nodes only help relay blocks, development is a matter of syncing the source code with other people and trying to lump in adoption and marketing is completely detached from reality. You might love bitcoin (and its dialup speed throughput of a few kilobytes a second for the whole world), but somehow trying to backward rationalize decentralization as only bitcoin is some 1984 level propaganda and reality denial. This is beyond just not understanding some aspects of cryptocurrency and into flat earth style actively ignoring easily provable facts.
I disagree.
1. There is no founder directing the project (big plus). "Dear leader" doesnt direct development which is unique compared to almost 100% of the shitcoins in the space.
1b. You think adoption rate and the decentralized movement that pushes/promotes adoption is irrelevant? I'm sure all the centralized shitcoin (aka unregistered security) founders would find your view on this hilarious.
2. Non mining nodes ensure transactions/blocks followed certain rules. When attached to wallets and services, that means much more than "just relaying blocks".
3. Layer 1 scaling is poor design. Larger blockchain = less nodes due to more expensive hardware requirements = more centralization. BSV and BCH are mostly dead because of getting this wrong, no debate about it.
The original poster is more right than wrong in his view.
1. There is no founder directing the project (big plus). "Dear leader" doesnt direct development which is unique compared to almost 100% of the shitcoins in the space.
1b. You think adoption rate and the decentralized movement that pushes/promotes adoption is irrelevant? I'm sure all the centralized shitcoin (aka unregistered security) founders would find your view on this hilarious.
2. Non mining nodes ensure transactions/blocks followed certain rules. When attached to wallets and services, that means much more than "just relaying blocks".
3. Layer 1 scaling is poor design. Larger blockchain = less nodes due to more expensive hardware requirements = more centralization. BSV and BCH are mostly dead because of getting this wrong, no debate about it.
The original poster is more right than wrong in his view.
This all reads like straight propaganda from /r/bitcoin and none of it is true.
Decentralization of a currency doesn't mean or have to do with development, that is a separate issue. Still, whoever controls github commits is going to control the reference implementation and that isn't many people.
Decentralization refers to being able to use money electronically without any third party's permission. All the rest of this are obvious talking points to try to redefine bitcoin as more unique than it is. It was always completely possible to copy everything and modify any part of it. Part of the excitement is that there is actual competition in currencies.
Non mining nodes ensure transactions/blocks followed certain rules. When attached to wallets and services, that means much more than "just relaying blocks".
This part is just a straight lie and someone has grossly mislead you. Non mining blocks have nothing to do with making blocks or deciding anything. All they can do is relay blocks that the miner decide. This is like someone printing books, those books being sold on amazon and a hundred other stores, then someone arguing that a single library deciding not to carry a book has any bearing on that book being created.
3. Layer 1 scaling is poor design. Larger blockchain = less nodes due to more expensive hardware requirements = more centralization. BSV and BCH are mostly dead because of getting this wrong, no debate about it.
When people say things like this it's obvious that they only get information from /r/bitcoin and don't have understanding beyond the heavily curated narrative there. Do you ever stop to think about why other cryptocurrencies don't need a second layer? Do you think the optimal throughput is a few kilobytes per second worth of transactions for the whole world? It all has to be synced on the main chain anyway. A second layer is a solution in search of a problem.
Larger blockchain = less nodes due to more expensive hardware requirements
Have you ever done the math on this? I can never believe people keep repeating something so obviously wrong. Bitcoin runs at dialup speed. A $10 per month VPS literally runs at 50,000 times the speed that the bitcoin network does. There have been times when average transaction costs spiked so high one transaction fee could pay for the hard drive space and vps time to host a node for months. The craziest thing here is that nodes don't even really matter. The miners can broadcast blocks themselves and anyone can sync with the chain if they want.
Decentralization of a currency doesn't mean or have to do with development, that is a separate issue. Still, whoever controls github commits is going to control the reference implementation and that isn't many people.
Decentralization refers to being able to use money electronically without any third party's permission. All the rest of this are obvious talking points to try to redefine bitcoin as more unique than it is. It was always completely possible to copy everything and modify any part of it. Part of the excitement is that there is actual competition in currencies.
Non mining nodes ensure transactions/blocks followed certain rules. When attached to wallets and services, that means much more than "just relaying blocks".
This part is just a straight lie and someone has grossly mislead you. Non mining blocks have nothing to do with making blocks or deciding anything. All they can do is relay blocks that the miner decide. This is like someone printing books, those books being sold on amazon and a hundred other stores, then someone arguing that a single library deciding not to carry a book has any bearing on that book being created.
3. Layer 1 scaling is poor design. Larger blockchain = less nodes due to more expensive hardware requirements = more centralization. BSV and BCH are mostly dead because of getting this wrong, no debate about it.
When people say things like this it's obvious that they only get information from /r/bitcoin and don't have understanding beyond the heavily curated narrative there. Do you ever stop to think about why other cryptocurrencies don't need a second layer? Do you think the optimal throughput is a few kilobytes per second worth of transactions for the whole world? It all has to be synced on the main chain anyway. A second layer is a solution in search of a problem.
Larger blockchain = less nodes due to more expensive hardware requirements
Have you ever done the math on this? I can never believe people keep repeating something so obviously wrong. Bitcoin runs at dialup speed. A $10 per month VPS literally runs at 50,000 times the speed that the bitcoin network does. There have been times when average transaction costs spiked so high one transaction fee could pay for the hard drive space and vps time to host a node for months. The craziest thing here is that nodes don't even really matter. The miners can broadcast blocks themselves and anyone can sync with the chain if they want.
> Decentralization refers to being able to use money electronically without any third party's permission.
Decentralization refers to many things, it depends on the discussion. I explained the scope of my statements in the parent.
> Non mining nodes...All they can do is relay blocks that the miner decide.
You are wrong here, they also do validation which is why its important for wallet owners and services to run their own nodes even if they dont mine.
>Do you ever stop to think about why other cryptocurrencies don't need a second layer?
Yes, it is because they are highly centralized chains that might as well run on sql and/or ghost chains with no users.
>Do you think the optimal throughput is a few kilobytes per second worth of transactions for the whole world?
Yes, offchain transaction batching is a good scaling strategy. Satoshi recommended it as a solution.
>Have you ever done the math on this?
Yes, bitcoin full nodes are much cheaper to host on a vps than ethereum full nodes for that reason. Larger blocks = more bandwidth and hd space = more time to download and fully validate. I assure you, running one costs a lot more than 10$/month. Perhaps you should check the math on your claim.
Decentralization refers to many things, it depends on the discussion. I explained the scope of my statements in the parent.
> Non mining nodes...All they can do is relay blocks that the miner decide.
You are wrong here, they also do validation which is why its important for wallet owners and services to run their own nodes even if they dont mine.
>Do you ever stop to think about why other cryptocurrencies don't need a second layer?
Yes, it is because they are highly centralized chains that might as well run on sql and/or ghost chains with no users.
>Do you think the optimal throughput is a few kilobytes per second worth of transactions for the whole world?
Yes, offchain transaction batching is a good scaling strategy. Satoshi recommended it as a solution.
>Have you ever done the math on this?
Yes, bitcoin full nodes are much cheaper to host on a vps than ethereum full nodes for that reason. Larger blocks = more bandwidth and hd space = more time to download and fully validate. I assure you, running one costs a lot more than 10$/month. Perhaps you should check the math on your claim.
Decentralization refers to many things, it depends on the discussion.
No it doesn't. Decentralization in cryptocurrency always meant being able to make transactions without a central controlling authority. Someone has mislead you to a strange backwards rationalization to say bitcoin is unique.
they also do validation which is why its important for wallet owners and services to run their own nodes even if they dont mine.
They might validate blocks before rebroadcasting them. This is not the same as miners dictating the ordering of transactions that goes in to a block. These are two different things. One is vital, one is a very minor convenience. Have you read the actual bitcoin pdf? Have you read about cryptocurrencies outside of /r/bitcoin ?
It actually isn't crucial for someone to run their own node, someone just needs a way to query the current state of the chain.
Yes, it is because they are highly centralized chains that might as well run on sql and/or ghost chains with no users.
Where are you getting nonsense like this? This is circular logic, your 'evidence ' is just saying the same thing over and over. Ethereum has had more transactions than bitcoin for the last four years. Here is actual evidence:
https://bitinfocharts.com/comparison/transactions-btc-eth.ht...
Yes, offchain transaction batching is a good scaling strategy. Satoshi recommended it as a solution.
Satoshi recommended lifting the block size limit and having relatively few nodes that could handle huge amounts of on chain traffic. I don't remember anything about stopping at 1.166 KB/s as throughput.
I assure you, running one costs a lot more than 10$/month. Perhaps you should check the math on your claim.
Your evidence is "I assure you" ? I'll show you actual evidence and you can check my math.
Here you can see a 700KB average block size roughly every 10 minutes. That is 1.166.66 KB/s
https://bitinfocharts.com/comparison/size-btc.html#3m
A $10/month VPS will have a 1 gigabit connection. That is going to be 125 megabytes per second. That is 107,204 times faster than the bandwidth of the bitcoin network. The entire bitcoin blockchain is only 437 gigabytes. That VPS could download the entire chain from the last 13 years in about an hour. To give you some reference of how much faster that is than what is needed, an SR71 blackbird at a top speed of mach 3.3 is only 75,600 times faster than a slug.
As for drive space, the entire chain will fit on a 512 GB thumb drive. These can be bought for $40 USD. Here is where the average fee for a single transaction was over $62 USD. A average single transaction cost more than storing the entire chain on an SSD because of the terrible bitcoin throughput.
https://bitinfocharts.com/comparison/bitcoin-transactionfees...
https://www.amazon.com/SanDisk-512GB-Ultra-Flash-Drive/dp/B0...
I would check your math, but you didn't give any at all. You have been taken in by a complete lack of real information. Try asking about it on /r/bitcoin and watch your comment be deleted or shadow banned. There is a reason you aren't getting any real information.
No it doesn't. Decentralization in cryptocurrency always meant being able to make transactions without a central controlling authority. Someone has mislead you to a strange backwards rationalization to say bitcoin is unique.
they also do validation which is why its important for wallet owners and services to run their own nodes even if they dont mine.
They might validate blocks before rebroadcasting them. This is not the same as miners dictating the ordering of transactions that goes in to a block. These are two different things. One is vital, one is a very minor convenience. Have you read the actual bitcoin pdf? Have you read about cryptocurrencies outside of /r/bitcoin ?
It actually isn't crucial for someone to run their own node, someone just needs a way to query the current state of the chain.
Yes, it is because they are highly centralized chains that might as well run on sql and/or ghost chains with no users.
Where are you getting nonsense like this? This is circular logic, your 'evidence ' is just saying the same thing over and over. Ethereum has had more transactions than bitcoin for the last four years. Here is actual evidence:
https://bitinfocharts.com/comparison/transactions-btc-eth.ht...
Yes, offchain transaction batching is a good scaling strategy. Satoshi recommended it as a solution.
Satoshi recommended lifting the block size limit and having relatively few nodes that could handle huge amounts of on chain traffic. I don't remember anything about stopping at 1.166 KB/s as throughput.
I assure you, running one costs a lot more than 10$/month. Perhaps you should check the math on your claim.
Your evidence is "I assure you" ? I'll show you actual evidence and you can check my math.
Here you can see a 700KB average block size roughly every 10 minutes. That is 1.166.66 KB/s
https://bitinfocharts.com/comparison/size-btc.html#3m
A $10/month VPS will have a 1 gigabit connection. That is going to be 125 megabytes per second. That is 107,204 times faster than the bandwidth of the bitcoin network. The entire bitcoin blockchain is only 437 gigabytes. That VPS could download the entire chain from the last 13 years in about an hour. To give you some reference of how much faster that is than what is needed, an SR71 blackbird at a top speed of mach 3.3 is only 75,600 times faster than a slug.
As for drive space, the entire chain will fit on a 512 GB thumb drive. These can be bought for $40 USD. Here is where the average fee for a single transaction was over $62 USD. A average single transaction cost more than storing the entire chain on an SSD because of the terrible bitcoin throughput.
https://bitinfocharts.com/comparison/bitcoin-transactionfees...
https://www.amazon.com/SanDisk-512GB-Ultra-Flash-Drive/dp/B0...
I would check your math, but you didn't give any at all. You have been taken in by a complete lack of real information. Try asking about it on /r/bitcoin and watch your comment be deleted or shadow banned. There is a reason you aren't getting any real information.
Bitcoin went up and down certainly. But remember that:
- it cannot be confiscated by govts. - afaik we arehaving inflation. so yes it changes the value but so do dollars and can be confiscated.
I do not see as crazy buying some bitcoins in the future. It is guaranteed to not be at the expense of irresponsible govts. doing policies.
- it cannot be confiscated by govts. - afaik we arehaving inflation. so yes it changes the value but so do dollars and can be confiscated.
I do not see as crazy buying some bitcoins in the future. It is guaranteed to not be at the expense of irresponsible govts. doing policies.
> it cannot be confiscated by govts.
Say what? The US government alone has confiscated _billions_ in Bitcoin. Use search term “confiscated bitcoin” and you’ll find thousands of examples trivially.
Say what? The US government alone has confiscated _billions_ in Bitcoin. Use search term “confiscated bitcoin” and you’ll find thousands of examples trivially.
Curious: how did they do it? I mean, they emitted a law? Because in theory if you keep them safe and anonymous noone should be able to do it.
Maybe it is not impossible but more difficult than alternatives?
Maybe it is not impossible but more difficult than alternatives?
Oh my goodness - they're acting just like the federal reserve!
How dare they!
How dare they!
Well one could say USD is at least backed by a real economy and a massive military.
Moreover the Fed does not claim that the U.S. Dollar is still backed by gold.
Tether is not a stablecoin if it is not backed by USD and if this is the case, then it has no value as a bridge between fiat currencies and crypto.
People paid with real money to buy crypto which was heavily inflated by this USDT out of nothing scheme. Because it was real money it also was real fraud in my opinion.
Moreover the Fed does not claim that the U.S. Dollar is still backed by gold.
Tether is not a stablecoin if it is not backed by USD and if this is the case, then it has no value as a bridge between fiat currencies and crypto.
People paid with real money to buy crypto which was heavily inflated by this USDT out of nothing scheme. Because it was real money it also was real fraud in my opinion.
You're correct! The US government doesn't claim that their currency is backed by gold - they merely strongarm the rest of the world into using dollars to pay for oil.
This effectively pins the dollar to the value of a barrel of oil - without having any formal accountability of having to pay up.
Meanwhile they made corporations in charge of the money supply, which they use to erode the generational wealth of the middle classes.
If you're mad at what tether is doing, you ought to be mad at what the federal reserve is doing as well. That was my only point.
Edit: Upon rereading my original comment - I can see how someone could take it as just snark. But we gotta keep these snakes out of controlling the money supply.
This effectively pins the dollar to the value of a barrel of oil - without having any formal accountability of having to pay up.
Meanwhile they made corporations in charge of the money supply, which they use to erode the generational wealth of the middle classes.
If you're mad at what tether is doing, you ought to be mad at what the federal reserve is doing as well. That was my only point.
Edit: Upon rereading my original comment - I can see how someone could take it as just snark. But we gotta keep these snakes out of controlling the money supply.
-Probability of Tether ever collapsing is incredibly low-
Tether has nearly $50b of cash or cash equivalents.
Tether charges 0.1% on redemptions, and min size is 100k.
It would take $50b + $50M in redemptions before we find out if this "hole" exists or not.
-Commercial Paper backing Tether-
https://tether.to/en/transparency/#reports Currently Tether states their commercial paper exposure to be 0.07% That doesnt seem to be any significant amount.
Now you can complain that there has not been an audit. That's fair. There could be a hole. But most of the stuff you are saying makes no sense, and if there is a hole we will probably never know.
Tether has nearly $50b of cash or cash equivalents.
Tether charges 0.1% on redemptions, and min size is 100k.
It would take $50b + $50M in redemptions before we find out if this "hole" exists or not.
-Commercial Paper backing Tether-
https://tether.to/en/transparency/#reports Currently Tether states their commercial paper exposure to be 0.07% That doesnt seem to be any significant amount.
Now you can complain that there has not been an audit. That's fair. There could be a hole. But most of the stuff you are saying makes no sense, and if there is a hole we will probably never know.
Another crap. My friend told me...read first.
Last year, Tether revealed that it held some cash but also bought a large amount of commercial paper, which is short-term corporate debt. This raised concerns given that Tether does not disclose exactly which companies it holds commercial paper from, and where those entities are based.
But the company has been reducing the amount of commercial paper in its reserves. In the fourth quarter of 2021, commercial paper made up just over 30% of Tether’s total reserves, down from more than 44% in the third quarter.
“Over time we will keep reducing the commercial paper, we aren’t finished yet with the reduction,” Paolo Ardoino, chief technology officer of Tether and affiliated cryptocurrency exchange Bitfinex, told CNBC on Wednesday at the Paris Blockchain Week Summit.
Last year, Tether revealed that it held some cash but also bought a large amount of commercial paper, which is short-term corporate debt. This raised concerns given that Tether does not disclose exactly which companies it holds commercial paper from, and where those entities are based.
But the company has been reducing the amount of commercial paper in its reserves. In the fourth quarter of 2021, commercial paper made up just over 30% of Tether’s total reserves, down from more than 44% in the third quarter.
“Over time we will keep reducing the commercial paper, we aren’t finished yet with the reduction,” Paolo Ardoino, chief technology officer of Tether and affiliated cryptocurrency exchange Bitfinex, told CNBC on Wednesday at the Paris Blockchain Week Summit.
Bloomberg News once tried to track down Tether's supposed commercial paper holdings [0]. It's a small market with just over a dozen major players, and Tether's claimed holdings would put them in the top 10. Bloomberg called a few of those firms, nobody had ever heard of or transacted with them. This smells of Maddoff 10 miles against the wind.
[0] https://www.bloomberg.com/news/features/2021-10-07/crypto-my...
[0] https://www.bloomberg.com/news/features/2021-10-07/crypto-my...
Another good read: https://slate.com/technology/2021/10/tether-crypto-danger-be...
And yes, those who were busy explaining why Ethereum is garbage, **coin, etc, and why only they know better, would have been 10% richer in just 2 days.
If crypto is supposed to replace other currencies, then you don't get richer if it is worth more in dollars. The entire point is to not use dollars. But nothing is priced in crypto. If it was, there wouldn't be enough supply. Also nobody would ever buy anything with it, because why spend 100 on something today when 50 will buy it tomorrow.
So crypto has devolved into nothing more than a scheme to bid up whatever coin of the day becomes a MEME darling and FOMO kicks in. You don't want to lose out on getting rich, do you?
Don't give me the crap that DeFi everything is around the corner. It's the same thing as automated driving. It's been right around the corner for years.
Windows 95 hit and the entire world was online with email and www everything within three years. Crypto is going on more than a decade with no better use case than day one. Other than a few thousand whales who got super rich when they got the masses to bid up the coins.
It amazes me how many people are blissfully unaware of the rampant tether fraud and the effect it could have on the whole ecosystem. This is a view from a good friend of mine who is an expert on the subject and well in the know.
Nobody knows where the USD supposedly backing it goes. Most of it is in “commercial paper” they said, but the investors who work in that industry say they’ve never heard of them.
This seems impossible because at their scale, that would make them, like, the 5th largest commercial paper investor on Wall Street. How could commercial paper investors not heard of them?
Unlike Bitcoin, Eth, and other coins, Tether was always claimed to be backed by something which ensured its's stable value. Tether the company claims that their tether coins are each worth $1.
There are now >$60Bn worth of Tether coin issued. With that much money they'd be a very serious private financial institution, and yet they only have 13 employee's. They have never been audited by any independent third party. They have repetitively lied about who owns the company (the same people who own Binance, the world's largest crypto exchange own Tether, and yet did not disclose that until it was found out). They have receptively changed their story on what backs Tether coin (originally each coin had $1 in a bank account to back it, now it's majoritively unspecified "commercial paper"). There is nothing which proves that Tether actually is backed by anything and the billions in new Tether coin which are minted could very well be worthless. Institutionalized investors allegedly sending billions of dollars to Tether, despite tether lying about their reserves, committing fraud by claiming to be fully backed when they were not, and reported by Bloomberg to be under DOJ criminal investigation for bank fraud.
There was never anywhere near a trillion dollars put into the crypto system. The miners created multi-millions of imaginary tokens without putting any dollars into the system. Those miner imaginary tokens came out of thin air, not from people investing dollars into the system.
If only 10% of those tokens are cashed out instead of "hodl", the $50 billion in tethers and few other dollars would instantly be depleted. The miners have a lot more than 10% to sell.
It is a classic Ponzi. All is fine when more people are sucked into putting in dollars (to pay the miners who put in zero dollars). But when people want to cash out, there is not enough dollars in the entire Ponzi to pay 10% of the imaginary tokens. The small amount of cash in the Ponzi runs out and the Ponzi collapses. It is very simple and does not require any complex conspiracy theory.