It's not that different than if we had a "cat picture" coin that anyone with a cat could manufacture cat pictures at will and sell them.
Granted Bitcoin is a little bit more governed in terms of technical difficulty and cryptographic security, but that doesn't change the fact that it's printed out of thin air in a decentralized fashion.
If I developed some hardware in secret that could mine Bitcoin 10X faster, there would be nothing illegal about using it to my advantage. If I had a hypothetical device that could print it 1000X faster, I could do that too. Maybe I do. You wouldn't know if I did.
Bitcoin is a Ponzi scheme as well.
That $1T market cap of Bitcoin? Was there really $1T USD put into it? I don't think so.
But a private entity (based in Bahamas) can do that with Tether. And you can use those to buy 'real' Bitcoins. It works perfectly until somebody tries to convert a big enough amount of those Tethers to real USD.
In real world, I'm not sure it's a very good example, so feel free to challenge it, would be:
- somebody prints perfect fake 100$ bills and floods the market with them
- prices of real goods go up significantly
- at one point somebody notice that those fake dollars have a small red dot in a corner
- they become instantly worthless, and all prices crash as there is suddenly much less real dollars than everybody thought
It's not a great analogy as there is nobody guaranteeing the conversion of those fake dollars to true dollars in the first place. Tether pretends to be doing that - but it appears more and more that they are just printing them out of thin air.
Sure you can. If your "counterfeit miner" secretly works 1000X faster than the miners everyone uses, you can still most certainly say "here is my Bitcoin" and it will be usable.
If the hashes you generate are indistinguishable from the hashes generated by an AntMiner, you have made Bitcoin out of thin air.
Yes, creating such a "counterfeit miner" would involve technological feats. But that shouldn't be the deciding factor here. It's still a PoW coin and assuming you are a super-powered genius hardware inventor with an insanely advanced lab, you can do the work much more efficiently without anyone knowing. And the coins would be actually legal to use.
Which is VASTLY different from USD in that if you have a secret lab to create USD bills that are indistinguishable from the real thing, it's still illegal.
With Bitcoin, it's still decentralized, i.e. printed out of thin air. If the coins you generate work with the system, they're legal and valid, it doesn't matter how you generate them or how much work you really did.
I have no idea where 'counterfeit miner' even comes into this. If you're the best at mining, you get the most coins. That's not controversial, it's a decentralised system, who would even be deeming you counterfeit? Were the first ASICs 'counterfeit'?
Exactly, so I'm demonstrating that Bitcoins are printed out of thin air by doing some arithmetic. The fact that a concept of "counterfeit" doesn't even exist demonstrates that ALL of them are printed out of thin air. You don't need to pan for gold, you don't need to save a kitten, nothing. All you need is to punch some numbers into a GPU or ASIC and voila you have thin air printed Bitcoin.
As opposed to USD, where the person who has the most coins isn't the one who can print a physical dollar bill most efficiently. There is a notion of counterfeit, there is centralized governance, and thin air printing is not allowed at the threat of arrest by that governance.
Besides, why is panning for gold or saving a kitten fundamentally any different? A difficult physical process must take place, the fact it happens to be digital does not make it magic, despite how complex these devices may seem.
> Sure you can. If your "counterfeit miner" secretly works 1000X faster than the miners everyone uses
You can in theory but not in practice. The person you're responding to was talking about practice, not theory. Practice is what matters in this case.
I know Ponzi schemes are bad. I think your money is bad. Therefore, your money is a Ponzi scheme. That’s the entirety of the logic employed by the comparison.
Just wait until you hear what they’ve done with the term “market capitalization”.
Even the staunchest believer in crypto will have a hunch there's something funny going on with Tether, but so far most people have been willing to look the other way as Tether and other stablecoins answer a genuine need: how to represent fiat money in the crypto ecosystem when centralized banks refuse to play along with their own downfall.
It seems to me the crypto folks on one hand complain about the governance of USD, but then also "need" it to stabilize their own currency. I thought crypto was the currency of the future.
1. is paying influencers USDT going to increase liquidity or decrease it? From a maker-taker model, I'd think that will decrease liquidity because those influencers are probably going to place a market order which reduces liquidity.
2. Is the typical influencers (or the average influencer they hired) going to have trouble converting USDT to USD? My profile of them would be 18-35 year old, middle to upper class, living in a developed country (or at least not a country that's subject to USD sanctions). It doesn't seem hard for those people to accept a USD wire transfer.
>Even the staunchest believer in crypto will have a hunch there's something funny going on with Tether, but so far most people have been willing to look the other way as Tether and other stablecoins answer a genuine need: how to represent fiat money in the crypto ecosystem when centralized banks refuse to play along with their own downfall.
Agreed, I avoid holding USDT where possible.
Yes. You print USDT and pay someone then lie about not printing it.
For the love of god, don't hold any USDT. Its really convenient to exchange cryptos but don't be holding it when the cards fall.
1. bitfinex asks some influencer to do some influencer things for them
2. bitfinex hands them a $100 bill
but the following isn't fine:
2. bitfinex hands them 100 USDT tokens
But hold on, corporations don't often pay people using paper bills, they pay them using ACH, so is the following fine?
2. bitfinex transfers $100 to their bank using ACH
Probably fine right, given that there isn't really a difference between getting paid in ACH vs paper bills. But some companies are old fashioned and don't do ACH transfers, they issue checks instead. So is the following fine?
2. bitfinex writes them a check for $100
Well, a check is just an IOU right? It's only a promise to pay them something. If you try to deposit the check and the check bounces it's not like the FDIC will save you. You'll have to chase after them for it. Given that fact, and recognizing that USDT is just an IOU, is there any difference between the above and
2. bitfinex gives them 100 USDT tokens
?
Bitfinex could either issue some USDT, convert it to USD and hand that to the influencer, or issue some USDT and hand that to the influencer. Can't really see the difference here, except if they hand over USDT that will hype the market a bit as well? As long as the conversion works they two are functionally the same.
However, I wasn't even aware (not trading crypto at all) that Binance offer 'affiliate' programs where influencers can earn Tethers. It's kind of funny - it works literally like a ponzi scheme - influencers bring in new 'investors' and earn 'tethers' (which are just printed out of thin air) - they can buy crypto with those tethers - and then guess what ? They sell them to the new 'investors' they just brought in.
It works until it doesn't.