Isn't that a good reason to get away from it? Since, it seems to just be a massively fraudulent vehicle that has been a direct cause of both booms and busts in Bitcoin?
This is from 2017: https://www.wsj.com/articles/large-bitcoin-player-manipulate...
Ya. It's crypto. Any and every aspect of crypto is at least partially deserving of such description.
can you trust the U.S. government to do the right thing/be efficient/effective? not really
therefore, lots of debt that'll never get paid back
corporations barely turning a profit. https://finviz.com/screener.ashx?v=111&f=idx_sp500&o=-pe ton of stocks with high P/E or no earnings in the S&P
wall street/robinhood "manipulating" markets, basically designing it almost like a casino to extract money from those who get addicted to "trading"
stock market is where wall street + U.S. corporations (greedy CEOs/boards) + government/politics (regulation, interest rates, etc.) all meet
and it's less fraudulent than crypto?
i'm not saying this is what i think. i read a lot of this (pretty much MAGA crazed conspiracy theorist weirdos) on stocktwits. a non zero amount of people think this.
You can find 10 posts in the past 30 days where people here are saying "omg, greedy corporation does greedy thing".
Just the other day we had a post saying "maybe the U.S. economy won't continue to grow forever and the stock market won't continue to return 7% a year"
Asked ChatGPT
> Is Wall Street known to be trustworthy and moral?
> Over the years there have been many instances of scandals, manipulation and fraud on Wall Street, which has damaged the reputation of the street.
Asked it this as well
> Are there instances of the U.S. government hiding the truth/lying to its citizens/being inefficient with taxpayer money?
> There have been instances in history where the U.S. government has been accused of hiding the truth, lying to its citizens, or being inefficient with taxpayer money.
I'm just trying to have a conversation. These MAGA people get a ton of power when you shut them down because they can point and say "see! listen! they don't want our points to be voiced! that means we're onto something"
"Argument from ChatGPT" is much worse than Argument from Authority. If you can't come up with your own arguments, then don't quote ChatGPT's arguments to me, just admit you're out of arguments.
Oh no, by shutting down and not listening to MAGA conspiracy theory parrots like you, I'm giving them power, because then they'll point fingers and lie, you threaten??!
Well they'll certainly point fingers and lie even if I listen to them too, so be it.
Hmm, now where have I heard that "I don't believe what I'm saying, I'm just askin' questions" line before, again and again?
Tucker “Just Asking Questions” Carlson Wants to Know What Putin Ever Did to You
https://www.vanityfair.com/news/2022/02/tucker-just-asking-q...
Fox News is 'Just Asking Questions' About the Safety of Vaccines
https://gizmodo.com/fox-news-is-just-asking-questions-about-...
Seth Meyers Nails Tucker Carlson’s ‘Just Asking Questions’ Nonsense
https://www.thedailybeast.com/seth-meyers-nails-tucker-carls...
How is me trying to discuss what somewhere between 0 and 50% of registered American voters believes in regards to "crypto fraud versus Wall Street fraud versus the stock market has been running on 0% interest rate money is basically fake fraud" whatever it is you're accusing me of doing?
I'm surprised somebody who has been on this site since 2014 with 20,000 karma is this rude/accusatory.
It's also not an appropriate place to post ChatGPT output instead of writing your own arguments.
Is it ChatGPT who told you to point fingers and play the victim of oppression if somebody tries to shut you down for spreading MAGA conspiracy theories, or did you come up with that yourself?
The point is that when you are spreading their conspiracy theories and telling people to let them speak and not silence them or else, that makes YOU one of those MAGA people you're warning us about. Witting or unwitting, you're useful to them.
"i read a lot of this (pretty much MAGA crazed conspiracy theorist weirdos)"
We’re not bulls, we don’t have to charge when we see red (hats).
And again I repeat, since you seem to be ignoring it: he tried to quote ChatGPT to support his lack of a valid argument. Nobody comes to this site to have arguments with ChatGPT, and ChatGPT and language models were certainly not the topic of this conversation. He might as well have been quoting his cat walking across the keyboard.
He was unsuccessfully trying to use ChatGPT output to prove his point. If he had a valid argument that he thought of himself to support his point, then he would have posted it instead of first parroting crazy MAGA conspiracy theory weirdos (which makes him their tool, witting or not), then parroting ChatGPT (which makes him a fool).
Even if he frames himself as merely a self-appointed ambassador to HN for crazy liars, he's still spreading their crazy lies. And if he trusts everything ChatGPT says so much, then he can PRIVATELY ask it "I’ve read X by conspiracy group Y. I think I believe it but I want to ask others first as I think they’re crazy weirdos." instead of trying to spread those crazy lies and conspiracy theories here.
Hacker News is not an appropriate forum for parroting crazy MAGA conspiracy theories or ChatGPT drivel as fact, or whining about how you're the victim of oppression and censorship for being downvoted and shut down when you're clearly breaking the rules.
And his threat not to shut him down or else he'll point fingers and claim to be the victim of censorship doesn't matter if crazy liars will spread crazy lies in retaliation for being shut down, because they spread crazy lies no matter what you do, so his threat that we should not shut him down for spreading crazy lies because it will make crazy liars spread crazy lies is tautological and meaningless.
In the interest of geopolitical curiosity and fairness, what exactly did Putin do to you?
It might repeat what some people have said. ChatGPT isn't designed to determine a consensus or to use a representative sample.
> the model predicts people would most likely say about the subject
Is that truly the design and the output? What "people"? Is "most likely" the goal or output? Is it structured by subject?
Maybe you know, but many people are leaping to conclusions.
Are you using ChatGPT as a source of truth? If so, what do you think about the obvious accuracy issues?
The last time the national government of an English speaking nation defaulted on its debt was on January 2 of 1672, with the Stop Of The Exchequer:
https://en.wikipedia.org/wiki/Stop_of_the_Exchequer
We've now seen 351 years of debts being paid on time, so why would you think the government is suddenly not going to pay its debt? You'd need a strong thesis to explain why the 351 year old trend is coming to an end.
IIRC the US government failed to pay pensions for Civil War or WW1 soldiers, and the British government did something similar regarding bonds or pensions for WW1 or WW2 soldiers.
https://fred.stlouisfed.org/series/GFDEGDQ188S
How will that not limit us going forward / is the current rate of "just add it to debt/never pay it back" sustainable?
Type "At what level does debt-to-GDP ratio hinder a nation?" into ChatGPT
I'm not talking about collapse, I'm talking about hinderance going forward
Raising debt, gotta service it, gotta raise taxes to pay for it or cut costs, no?
https://www.pewresearch.org/fact-tank/2019/07/24/facts-about...
The more important aspect is not that there's debt, but how it is spent and what is being spent on. If the spending is poor (aka, the spending is malinvestment), it doesn't matter that the current or projected future servicing is OK.
Using a metric like debt to GDP does not tell the whole story.
Wow, is this what we’ve come to? This is a valid thought process now?
I have no strong views on your point. But I really don’t think it’s safe to trust the very-convincing and very-possibly-incorrect responses generated by ChatGPT to inform your views (on anything).
To the best of my understanding, any answers to that question in extant literature are either going to be highly theoretical, or about situations that are not sufficiently similar to that of the modern US to be helpful.
https://www.bloomberg.com/news/articles/2021-05-24/belize-de...
In the first 20 companies you compare to scams is Amazon, a company with $500 Billion dollars in sales last year [1].
[1] https://www.macrotrends.net/stocks/charts/AMZN/amazon/revenu...
There are many use cases outside of these. See Cross-border payments, censorship-resistance, trust networks, access to credit, etc.
My impression is that cross-border payments are a pretty small use case, especially if you mean legal cross-border payments. I.e., “something the law allows you to do but you can’t find a financial institution to do it.”
> censorship-resistance
Sure, but again, fairly niche at this point in time in western countries. Most financial censorship cases I’ve heard of in the U.S. sounded pretty well deserved.
> trust networks
This is a niche of a niche outside. You could just say “cryptography enthusiasts” instead.
> access to credit
Example? As in, someone with bad credit can still borrow on crypto?
Both being illegal. If something is censored by government, the tools to bypass or defeat that censorship are likely illegal, especially if used to distribute uncensored copied of that material. If governments have regulated payments across a particular border, bypassing those regulations is also very likely illegal.
This was published as a result of the agreement Tether made with the NY State Attorney General. If the NYAG had not taken action against Tether, would they have ever released this infromation.
https://tether.to/wp-content/uploads/2021/05/march-31-2021-r...
Note the percentage of cash and the percentage of "commercial paper" for which none of the issuers are disclosed. Are those issuers banks. Are they other crypto startups. Are they affiliated crypto entities (like Alameda was to FTX).
Perhaps I have missed the other pages of this financial disclosure from Tether, where further details are found.
This PDF URL permanently redirects (HTTP 301) to https://tether.to/transparency
There's a separate line item for "Secured Loans" which is where money lent to affiliated crypto entities would go. Tether previously stated that these loans would also be wound down. [2]
[1] https://assets.ctfassets.net/vyse88cgwfbl/1Xfu4398CIoMiuKjPh...
[2] https://tether.to/en/tether-addresses-fud-around-secured-loa...
We can be pretty confident that they don't. If they did they would have a third party accounting firm provide an attestation that they did
The most recent was Sep 2022 by BDO.
They have a mix of assets (as you'd expect, because they have different liquidity requirements). But the majority is in short term (<45 day) US Treasury Bonds or Cash and Bank deposits. The other largest asset class is money-market funds, which is a pretty well understood asset class.
It's not nothing though - certainly more than FTX had.
But I am noting they do have 3rd-party attestations (NOT audits!) which is the same as what Circle does with USDC.
FTX used their FTT token to prop up their balance sheet. This attestations says USDT isn't like that.
(I don't trust any entities in the crypto space, but just for the record)
Oh well, probably nothing!
Did they say this? I thought it was quarterly (same as what Circle does with USDC)
> in December BDO said they were going to stop dealing with crypto companies.
Yeah who would blame them?
Issuing stable coin seems like an easy business on paper. You collect $$$, mint coins, collect interest on those $$$ in a bank and that's your profit. Does everyone become greedy and lose the treasury in gambling instead, or what?
If the other company makes good use of the loan and recovers to pay the original company back — great, you still have enough assets to cover your deposits. That may be what happened with Bitfinex. On the other hand, the other company might go tits up. Now the first company has no money to cover deposits, declares bankruptcy, and if all is right in the world the execs see some punishment.
Ideas: Greed, incompetence, a combination of the two.
Just guesses out of thin air: Collect $1b, don't just keep $1b sitting around in low-risk instruments 1:1. Take $200m for yourself. Try to turn it into $1.2b through risky investments.
For one, finding a bank that will hold your money will be tough. They’re taking on significant liability, for the AML officer, personal criminal liability.
Mechanically, what does this mean? When someone buys Tether from you, to which bank account do you have them wire the money? By the way, your suggestion is a reasonable leap. But it still involves handling U.S. dollars, and now you've added a new regulated area (wealth management).
It's easy to imagine the transgressions starting small. Say you have someone ready to wire you $100mm. You don't yet have a bank account, but you're working on it. Do you tell them to pound sand? Or do you temporarily use a side account, to hold the funds until the main one is ready?
I'm not very familiar with how treasuries get bought/sold/transferred between parties. But they seem pretty cash-equivalent, Uncle Sam will sell as much as you want, and your profit margin is baked into it.
This is better! But a couple issues. One, this means the U.S. Treasury has an open book into your in and outflows. Not sure that's Tether's vibe. Two, you've limited yourself to people who can transfer Treasuries. Given Tether doesn't provide consumer redemption, this isn't a huge issue. But transferring Treasuries takes more financial savvy than wiring cash, and that savvy is likely to ask for their interest (as is common in collateral arrangements).
It's relevant to the difficulty of launching and operating a U.S. dollar stablecoin.
What I meant by saying 'it seems easy on paper' is that the need to be profitable shouldn't force you to make decisions which eventually lead your treasury to not being valuable enough to back the minted coins.
Also: Perhaps I don't understand how tether works, but I don't see why they need to be liable for holding customer funds. Why do they need a deposit/withdrawal process at all? Can't they just do the following?
IF USDT on open markets is <$1 THEN buy coins and burn them
IF USDT on open markets is >$1 THEN mint coins and sell them
And then they can do whatever they want with the treasury, no? Store it in banks or buy US treasury bonds, etc. Just don't lose it.
So now there's a business where the only way to make money is to break the regulations that exist to stop banks from doing exactly what they're doing. It's in the cryptocurrency environment, where the entire culture is made up of scammers, chumps, and chumps who aspire to be scammers. And in that environment, there's a big pile of money that could be transferred out without any oversight at all.
At that point, it isn't just that people "become greedy", but that every single aspect of the situation is aligned to select greedy people and create a situation that rewards theft.
so it worked for uber & AirBNB, i'm sure these companies doing this are asking why not for them?
You're assuming an intent to make (all) customers whole.
In Ponzi Scheme you collect $$$, mint coins or forge other confirmation, move money to Panama or spend it and when asked to pay out, you use other investors money. The only reason for making some customers whole is to keep the scheme going.
The problem for Ponzi operator starts when too many victims want they money back and there is no big enough source of it to cover payouts.
Take a trivial example - a person with no debts. You have to concede such people do exist in the world.
They are by definition not insolvent, and cannot be. Even if the currency completely collapsed and USD had zero value this would not make them insolvent because they have o debt and therefore no financial obligations.
Insolvent companies usually fail anyway. It's better to catch them early before they can make things even worse for their customers and investors.
But it begs the question, is Tether meant to be a viable stablecoin, or is it a fractional reserve piggy bank for the Tether owners to earn interest from?
Clearly they're running it like the latter. Why would the crypto industry consolidate on something scammy like that?
Ideally a stablecoin would be non-profit and run strictly for quality purposes with audits etc. Why would you ever need more than one? The desire to skim some off the top is far too pervasive in crypto
Tether has short term liabilities (tokens) and short term assets (T-bills, money market funds, bank deposits, etc.). Because most of their assets are in short term "cash equivalent" assets with lots of liquidity, Tether can more easily deal with large redemptions as they did in April - July when their market cap went from $83B to $66B.
they claim.... We don't actually know what assets they really decided to hold.
Curve protocol has a ton of decentralized usdt pools with massive liquidity. Most people on this thread aren't really into defi, you can tell..
Or did mean that the implied trade is direct USDT -> USDC?
P.S. Genuine question; I don't dabble in crypto.
I find it very strange that crypto exchanges don't handle execution, confirmation and settlement in the same way as traditional markets.
Also, wasn't the major sell point of stablecoins to enable direct crypto-to-crypto transactions without ever needing to first settle in fiat currency, e.g. USDT -> USDC, as opposed to USDT -> USD -> USDC?
I'm not sure what he is talking about. On centralized exchangers execution, confirmation, and settlement happen nearly instantly. Unlike with stocks there is no 2 day settlement time.
For decentralized exchanges you can do it in 1 transaction executing both trades atomically. Modern token swaps will look for the optimal series of trades to make from available DEXs to give you the best rate. It can automatically check if it's better to go straight from USDT to USDC or if it's better to swap to bitcoin first. Sometimes it makes sense to split it up so some of it is direct swap and the other part of it uses an extra leg to get a better deal.
I’m not a big trader, but people send me BTC about once per week. It takes 30 minutes easily to get the transaction confirmed on the blockchain. Before that, it’s not clear the transaction is legit. And I have had one or two transactions that don’t reach the magic number of 6 confirmations. I’m not sure how the sender pulls that off, but I alert them of it, don’t deliver the goods, and they haven’t complained (knowing they sent a fraudulent transaction? I don’t know)
It’s my understanding those confirmations are being done by miners who get a small fee that me or the sender’s pay.I see this labeled as “network fee”.
The 30 minute wait would only make sense if you were to trade USDT for bitcoin on a CEX, then send that money using bitcoin to another CEX to execute the next trade to USDC.
Precisely.
> find it very strange that crypto exchanges don't handle execution, confirmation and settlement in the same way as traditional markets
You don’t have to use an exchange to trade crypto. You can send crypto from one wallet to another without any exchange or anyone else in the middle (Except miners who are paid to confirm the transaction)
It would look amazing.
The bank run on Tether exposes Tether's systematic lies and inherently unworkable business model.
I'd take it a step further and say that we know Tether's USD coffers aren't deep enough to cover withdrawals. They've fully and publicly accounted for the assets that back UST and it's almost entirely in cryptocurrency which will nose dive the second people start divesting.
You seem to think that ignoring this glaring liability will somehow make it go away or will buy enough time for people to safely divest. It simply won't. The only cure for this cancer is sunlight and an ugly haircut for Tether holders.
The only way to fix this is for unstable stablecoins to fail hard and have it serve as a warning for future investors not to play with fire.
In the stock world, you can't have an ETF without credible audits, regulatory checks etc. Generally speaking that means if I have an ETF which someone says will track the SPX, it has an underlying asset basket comprising the stocks in the SPX and a redemption/creation mechanism where creating new units is contingent on assets being added to the basket to ensure redemption is later possible. Vice versa, redemption involves selling those assets to give back cash.
You don't get to just say "don't look behind the curtain. Your gold is there but you don't get to look at it".
[1] Which I have said for a very long time that it very likely _is_ simply on the basis of logic. If it's not a fraud there really is no reason whatsoever not to allow an audit and have full transparency about underlying assets. They don't do this and therefore are most likely a fraud. The reason they have always given (that giving transparency about their list of assets would allow others to duplicate their strategy) is the epitome of weaksauce and reason for concern in itself. For the people creating an ETF, the ETF is a source of funding because you have the ability to swap basket assets for units and do creative things when you see units available for purchase in the market. The edge doesn't come from having super seekrit strats about what goes in the asset basket. Any alpha from teh basket contents would cause undue volatility and the ETF not to track the reference index properly.
We know (from chats that were made public by FTX employees) that they are working with Tether to make sure that everything looks backed and solid and regain confidence.
It is not impossible that Binance is already in the hole, and using some of Tether's cash, or that such a position is imminent.
If we give Binanace time to stabilize before there is a run on Tether, then their combined coffers will be much larger, thus preventing the crash.