11 ms·

One Tether Trader Didn't Cause the Bitcoin Bubble

157 points by felixbraun 7y ago

3solarmasses 7y ago
Thank you for bringing some basic logic back to the table. People love to imagine that odd phenomenon have simple solutions. This whole "tether was the sole cause of the bitcoin bubble" theory is completely ridiculous. Go into a random bar in December of 2017 and you would hear people talking about btc and altcoins...
EGreg 7y ago
I was tired of hearing this crap! This is when everyone finally heard about Bitcoin after the runup. And continued it until the overexuberance ran out of steam. Not like it’s the first time that happened.
ftufek 7y ago
Having been through that bubble, I'm fairly confident FOMO had a huge effect. Every single person I know was asking how to buy some. You can even see it on Google Trends[1]. It's possible that the very first initial bump was manipulated (and crypto is definitely manipulated each and every day...), but the crazy increase afterwards probably wasn't due to a single entity. 1: https://trends.google.com/trends/explore?date=today%205-y&q=bitcoin https://trends.google.com/trends/explore?date=today%205-y&q=...
- safog 7y ago
  Yes, some of it was organic, but towards the end of the bubble, folks were looking at tether printing and using that as a signal to buy / sell. People even during the bull run called out tether for being the biggest risk to crypto markets and understood that without this well-timed injection of cash into the crypto markets, the price would fall flat. Given Crypto markets' propensity to scam, I'd be shocked if finex & co didn't engage in manipulation. Maybe not to the extent that the paper's authors claim - China, S. Korea, India all banned / tried to ban crypto and I think Chinese volume drying up was a major cause for the bubble popping.
- cwkoss 7y ago
  Next FOMO bubble is going to be exciting: it's getting much easier to acquire Bitcoin, so the conditions seem ripe for the next bubble to be even wilder. Keep an eye out for next spring, when Bitcoin block reward halves again. (don't invest more than you're willing to lose entirely it's very risky, but having skin in the game during a bubble is very fun in my experience and will quickly educate you in the emotionality of trading. Dollar cost averaging weekly seems like the best strategy: easy to feel dread at best entry points and greed at best sell points.)
  - ftufek 7y ago
    The way I look at it, Bitcoin is a historical experiment happening during our lifetimes and mid-May (the time of halving) will be a very interesting milestone in that experiment. It could go up or down, but either way, it will be interesting to watch.
    - rauchp 7y ago
      Is there any reason for it to go down because of the block halving? I've heard it might be already priced in, so would the lack of a pump be enough to cause a massive drop? Looking at the performance this year, I haven't seen any real patterns, except maybe the time Tether started printing again.
      - ftufek 7y ago
        There's a lot of other reasons why it can go down and it wouldn't necessarily go down because of halving. But when a lot of people expect something to go up, it can have reverse effects. A lot of people have this assumption that it will always go up after a halving, it very well might, but at the current price point, the average person can't even afford a single Bitcoin whereas at previous halving (in 2016) that was still doable (it was on the order of a few hundreds of dollars). At this stage, you would need big investors and probably that's what companies like Bakkt will allow.
        Terretta 7y ago
- tedk-42 7y ago
  Pretty much this. How could one whale pump so much money into the market? It was a societal thing more so than an individual person. People were speculating like crazy to the point where you had grandmas giving investment advice on this new thing called 'bitcoin' for their grandkids to get rich from. Tether's in the spotlight right now and journos will have a nice round of clickbait articles to keep the interest going. Reason will prevail!
  - dwd 7y ago
    It's the same as attributing the Sterling crash in '92 just to Soros. He had a large position and enough to move the market but he wasn't the only player, and probably small in comparison to all the retail investors who would have lost out late in the sell off panic.
  - jrochkind1 7y ago
    > How could one whale pump so much money into the market? Well, the allegation is, because they were printing it.
- andreygrehov 7y ago
  Agreed. During the 2017 run up, I had tons of non-technical folks asking me to buy Bitcoin for them. A doctor from Europe was ready to spend $100k, which is what he's making per year. A healthcare specialist from New York, with an annual salary about $40k, was ready to spend $10k. An athlete from Brazil was begging to spend his $300k on altcoins. Many people do not realize how strong FOMO can be.
rauchp 7y ago
On a ski trip I took in 2017, I was in line to buy a lift ticket one cold December morning. I remember overhearing the winter bros (the ones that usually talk about gnar and their steezy tricks) talking about installing Coinbase and buying Bitcoin. I wouldn't underestimate the amount of retail investors that speculated on Bitcoin during that time. It was on major news networks in America, but also on national networks outside the U.S. My uncles and aunts were calling me asking how to buy Bitcoin outside the USA. The FOMO was real back then. Did Tether play a part in the grand pump? I'm sure it did, but I imagine it was more of a catalyst, and not the primary driver as the original study suggested.
- pshc 7y ago
  Late 2017 was nuts. I recall my brother texting me “Hey should I buy XRP?” out of the blue. Wish I had had the presence of mind to realize it was time to get out.
  - helpPeople 7y ago
    Bitcoin has a usecase that makes sense, rare, government free money. Xrp, centralized money. Just as unreliable as government money. To this day, alt coins seem utterly useless. (Save privacy coins)
    - fock 7y ago
      good luck with all that government free infrastructure, but as your fellow coinhead told us, we should think about the poor people...
    - polotics 7y ago
      IMHO A lot is hanging on Monero's ASIC resistance, version coming up this month: true decentralised hashing power is essential to the concept.
  - k__ 7y ago
    I can remember Bitcoin going to $200 thinking it was nuts. I can also remember it going to $700 thinkin it was nuts. Now it's over $9000. So when was there really a reason to get out?
ganitarashid 7y ago
There was no bitcoin bubble. Bitcoin is currently 50% down from the high mark. That is not a bubble. After actual bubbles, the low mark is may be 90% or more below peak.
- Nition 7y ago
  Is the definition of a "bubble" invalidated if the stock goes back up some time after the crash? It did drop initially from $20K to a low of $3,200, which is 84%.
  - ganitarashid 7y ago
    Yes it is. If you had invested in the stock market at the height of the “””bubble””” in 2000 you would be off well now. In hindsight it was not a bubble. You may disagree but sadly you probably didn’t have that perspective at the time.
    - chrisco255 7y ago
      I prefer "boom" and "bust" cycles rather than bubble, to describe these scenarios.
40acres 7y ago
Tether sounds like the Federal Reserve's interface to Bitcoin.
rolltiide 7y ago
article titles are topic suggestions to espouse pre-existing beliefs, exhibit a yesterday had people saying “Aha! I knew it” alongside anecdotes that completely neglected the role of a crowd and media to support their fictional higher standard for a bitcoin pump over how literally any rally works today has different people saying “yeah this makes way more sense” because of the role of actual distinct buyers. this article is just using its platform to surface that explanation higher
bouncycastle 7y ago
Some great alternatives Tether and Bitfinex are MakerDAO and Uniswap. The first one offers a decentralised & transparent stable-coin called DAI. The second one is a decentralized exchange that is also 100% transparent. These are transparent because they're running as programs on top of of a blockchain (Ethereum). Each and every state change is recorded and the systems can be audited in real-time. The Maker DAI stablecoin currency is backed by collateral (Ether), and it's currently overcollateralized by about 350%. The system has been remarkably stable, even in the face of the bear market, which resulted on some crazy swings in the price of Ether. DAI also has a few fiat on-ramps, including Coinbase and Kraken. You can also mint DAI yourself - there's a tutorial on Coinbase where they give you $20 DAI for free, https://www.coinbase.com/earn https://www.coinbase.com/earn What's more is that since these systems are essentially programs (they can be used and called by other programs as "library" ) which means that they can be used as lego bricks to build new things. Some examples are "Pool Together - https://www.pooltogether.us" https://www.pooltogether.us", which is a no-loss lottery system. It combines MakerDao's DAI coin and a decentralized lending system called "Compound". Please be mindful that all the above projects are still considered experiments and cutting-edge stuff. It will probably still take a few years to mature - however, a lot of new opportunities seem to be opening up in this area.
- ShorsHammer 7y ago
  Are you saying Tether isn't run on a blockchain? Because it most certainly is. The SEC crypto tsar recently had quite negative comments about MakerDAO at SWSX, as in they may be in breach of securities law. Something to note. The decentralized nature still makes it far less riskier to the end consumer.
  - chrisco255 7y ago
    Well the Tether transactions are run on a centralized blockchain, but the underlying value of Tether is based entirely on trust in Bitfinex backing it with actual dollars. As for Maker, I really don't know how the SEC would begin to shut it down if it wanted to. It's entirely smart contract driven and it's live on the Ethereum blockchain, which is truly decentralized. Surely we need to update securities law for the 21st century as I'm not sure the Howey test had blockchain era in mind.
chrisco255 7y ago
From my perspective, watching the markets since 2013, the 2017 boom was caused by Ethereum. Before Bitcoin shot up, Ethereum had shot up from $8 in December 2016 to nearly $50 a couple months later. Now, Ethereum is a novel innovation on blockchain tech. The smart contract hype was very real at the time. (For the record, I still think smart contracts have tremendous potential) ETH had navigated a fork, secured corporate alliances, setup several foundations to promote work and was starting to generate a lot excitement around projects like Augur, Ox, etc. Then on top of that, the ICO boom happened when several projects raised tens of millions of dollars. That caused a run on ETH. ETH boomed and then BTC followed, at least for the 2017 boom. And then the speculators danced between altcoins, Tether, Bitcoin and ETH, trying to maximize their returns while paying little attention to fundamental adoption. I think we've seen certain technologies take over markets very quickly in the past couple decades, like desktops and wifi and mobile and then smart phones and social media...that we've gotten used to rapid disruption in tech. However, with financial tech like blockchain and crypto, it necessitates slow adoption. Why is this? Because it's real money on the line. It's cool to move fast and break things when it's an app or a fitness tracker, but when it's significant amounts of money on the line, maturity, trust, and security are tantamount. I still think blockchain will win in the long run against legacy tech. But it will be a slow disruption.
- grubles 7y ago
  Bitcoin has smart contracts, and has for many years now. Ethereum's marketing for the phrase is kind of misleading. Why the downvoting? Apparently a number of people haven't heard of Bitcoin Script, or are upset I pointed out this very factual item about Bitcoin? Seems somewhat odd.
  - bitcoinbutter 7y ago
    Ethereum's smart contracts are obviously more developer friendly and easier to implement. Ethereum smart contracts are the go-to for dapps, despite having a significantly smaller userbase and market cap than bitcoin. To say Bitcoin smart contracts are equal to Ethereum smart contracts would be akin to comparing Myspace to Facebook.
throwaway122378 7y ago
They ran the complete opposite article yesterday. Fake news
- roywiggins 7y ago
  This is an opinion column. Opinion columnists frequently disagree with each other, that's why they're called opinions.
  - fierarul 7y ago
    Then it sure is nice that HN shows (bloomberg.com) in there. Bloomberg can get hits by showing conflicting views or just about anything. I suggest HN be changed to show opinion sections of major sites differently.
    - buboard 7y ago
      It should first remove paywalls. The same opinions can be found in tens of blogs, most likely with the same arguments. IT's a bit rude to the publishers that we re posting paywalled content here, often with bypass links.
  - buboard 7y ago
    Alright, but i m expecting "Actually, it was only one Tether Trader" tomorrow.
askmike 7y ago
> Perhaps the takeaway is that when banks refuse to do business with crypto traders, or when a government bans trading altogether, it doesn’t stop traders from trading. It just forces them to find creative solutions. If it were easy for crypto exchanges to use the traditional banking system, there would be no need for Tether at all. This is a point not many seem to understand.
- EdwardDiego 7y ago
  The reason it's not easy is because of anti-money laundering/know your customer legislation - which directly contradicts the few currency uses Bitcoin has at this point.
deleted 7y ago
[deleted]
neonate 7y ago
http://archive.is/dhAsU http://archive.is/dhAsU
dnprock 7y ago
I find it difficult to defend Tether. I leave the investigation to regulators. But assume Tether team has good intention and try to do the right thing, it is easy to make mistake. Tether software may have had a bug that inflates Tether coin over reserve. This is a problem with permissioned money system. It is difficult to audit and verify transactions. I think Libra is an improvement. They use open source software. But it is still a permissioned money system. There's room for error. Who would be responsible for the damage? I think every participants need to share the responsibility. I've advocated for a new category: decentralized and digital native crypto with constant inflation. Permissionless is a key feature. It provides many advantages over permissioned. https://bitflate.org/post/2019/11/05/tether-problem-highlight-the-need-for-inflating-cryptocurrency.html https://bitflate.org/post/2019/11/05/tether-problem-highligh...
CRUDite 7y ago
The bitcoin "bubble" was caused by an invention in the ecosystem. Bitcoin was "stuck" for a long time around $300, because it is not much good @ 10 mins tx time. Then a solution was published, the lightning network whitepaper. A mere 5 days later volume exploded and a period of 6 months of accumulation occurred where price was contained by large bid / ask walls. Volume dropped off after this point and the price rocketed up. The ultimate destination was the joint mcap of visa and mastercard, which it would in theory now be able to compete with at some point, which worked out at 18k per coin at the time. The collapse afterward is due to the fact that it must be used in this way and at that tx magnitude to justify that valuation. Your basic buy the rumour sell the news variation. It might thus range around 10k for a long time. Whether those who accumulated used bots or tethers or both to drive the price up rather than it being organic price action is debatable, and it seems difficult to prove. What is interesting to me is how fast money went to work on this after the technical hurdle was overcome.

157 points by felixbraun 7y ago

Thank you for bringing some basic logic back to the table. People love to imagine that odd phenomenon have simple solutions. This whole "tether was the sole cause of the bitcoin bubble" theory is completely ridiculous. Go into a random bar in December of 2017 and you would hear people talking about btc and altcoins...

EGreg 7y ago

I was tired of hearing this crap! This is when everyone finally heard about Bitcoin after the runup. And continued it until the overexuberance ran out of steam. Not like it’s the first time that happened.

ftufek 7y ago

Having been through that bubble, I'm fairly confident FOMO had a huge effect. Every single person I know was asking how to buy some. You can even see it on Google Trends[1]. It's possible that the very first initial bump was manipulated (and crypto is definitely manipulated each and every day...), but the crazy increase afterwards probably wasn't due to a single entity. 1: https://trends.google.com/trends/explore?date=today%205-y&q=bitcoin https://trends.google.com/trends/explore?date=today%205-y&q=...

safog 7y ago
Yes, some of it was organic, but towards the end of the bubble, folks were looking at tether printing and using that as a signal to buy / sell. People even during the bull run called out tether for being the biggest risk to crypto markets and understood that without this well-timed injection of cash into the crypto markets, the price would fall flat. Given Crypto markets' propensity to scam, I'd be shocked if finex & co didn't engage in manipulation. Maybe not to the extent that the paper's authors claim - China, S. Korea, India all banned / tried to ban crypto and I think Chinese volume drying up was a major cause for the bubble popping.
cwkoss 7y ago
Next FOMO bubble is going to be exciting: it's getting much easier to acquire Bitcoin, so the conditions seem ripe for the next bubble to be even wilder. Keep an eye out for next spring, when Bitcoin block reward halves again. (don't invest more than you're willing to lose entirely it's very risky, but having skin in the game during a bubble is very fun in my experience and will quickly educate you in the emotionality of trading. Dollar cost averaging weekly seems like the best strategy: easy to feel dread at best entry points and greed at best sell points.)
- ftufek 7y ago
  The way I look at it, Bitcoin is a historical experiment happening during our lifetimes and mid-May (the time of halving) will be a very interesting milestone in that experiment. It could go up or down, but either way, it will be interesting to watch.
  - rauchp 7y ago
    Is there any reason for it to go down because of the block halving? I've heard it might be already priced in, so would the lack of a pump be enough to cause a massive drop? Looking at the performance this year, I haven't seen any real patterns, except maybe the time Tether started printing again.
    - ftufek 7y ago
      There's a lot of other reasons why it can go down and it wouldn't necessarily go down because of halving. But when a lot of people expect something to go up, it can have reverse effects. A lot of people have this assumption that it will always go up after a halving, it very well might, but at the current price point, the average person can't even afford a single Bitcoin whereas at previous halving (in 2016) that was still doable (it was on the order of a few hundreds of dollars). At this stage, you would need big investors and probably that's what companies like Bakkt will allow.
      - Terretta 7y ago
tedk-42 7y ago
Pretty much this. How could one whale pump so much money into the market? It was a societal thing more so than an individual person. People were speculating like crazy to the point where you had grandmas giving investment advice on this new thing called 'bitcoin' for their grandkids to get rich from. Tether's in the spotlight right now and journos will have a nice round of clickbait articles to keep the interest going. Reason will prevail!
- dwd 7y ago
  It's the same as attributing the Sterling crash in '92 just to Soros. He had a large position and enough to move the market but he wasn't the only player, and probably small in comparison to all the retail investors who would have lost out late in the sell off panic.
- jrochkind1 7y ago
  > How could one whale pump so much money into the market? Well, the allegation is, because they were printing it.
andreygrehov 7y ago
Agreed. During the 2017 run up, I had tons of non-technical folks asking me to buy Bitcoin for them. A doctor from Europe was ready to spend $100k, which is what he's making per year. A healthcare specialist from New York, with an annual salary about $40k, was ready to spend $10k. An athlete from Brazil was begging to spend his $300k on altcoins. Many people do not realize how strong FOMO can be.

rauchp 7y ago

On a ski trip I took in 2017, I was in line to buy a lift ticket one cold December morning. I remember overhearing the winter bros (the ones that usually talk about gnar and their steezy tricks) talking about installing Coinbase and buying Bitcoin. I wouldn't underestimate the amount of retail investors that speculated on Bitcoin during that time. It was on major news networks in America, but also on national networks outside the U.S. My uncles and aunts were calling me asking how to buy Bitcoin outside the USA. The FOMO was real back then. Did Tether play a part in the grand pump? I'm sure it did, but I imagine it was more of a catalyst, and not the primary driver as the original study suggested.

pshc 7y ago
Late 2017 was nuts. I recall my brother texting me “Hey should I buy XRP?” out of the blue. Wish I had had the presence of mind to realize it was time to get out.
- helpPeople 7y ago
  Bitcoin has a usecase that makes sense, rare, government free money. Xrp, centralized money. Just as unreliable as government money. To this day, alt coins seem utterly useless. (Save privacy coins)
  - fock 7y ago
    good luck with all that government free infrastructure, but as your fellow coinhead told us, we should think about the poor people...
  - polotics 7y ago
    IMHO A lot is hanging on Monero's ASIC resistance, version coming up this month: true decentralised hashing power is essential to the concept.
- k__ 7y ago
  I can remember Bitcoin going to $200 thinking it was nuts. I can also remember it going to $700 thinkin it was nuts. Now it's over $9000. So when was there really a reason to get out?

ganitarashid 7y ago

There was no bitcoin bubble. Bitcoin is currently 50% down from the high mark. That is not a bubble. After actual bubbles, the low mark is may be 90% or more below peak.

Nition 7y ago
Is the definition of a "bubble" invalidated if the stock goes back up some time after the crash? It did drop initially from $20K to a low of $3,200, which is 84%.
- ganitarashid 7y ago
  Yes it is. If you had invested in the stock market at the height of the “””bubble””” in 2000 you would be off well now. In hindsight it was not a bubble. You may disagree but sadly you probably didn’t have that perspective at the time.
  - chrisco255 7y ago
    I prefer "boom" and "bust" cycles rather than bubble, to describe these scenarios.

40acres 7y ago

Tether sounds like the Federal Reserve's interface to Bitcoin.

rolltiide 7y ago

article titles are topic suggestions to espouse pre-existing beliefs, exhibit a yesterday had people saying “Aha! I knew it” alongside anecdotes that completely neglected the role of a crowd and media to support their fictional higher standard for a bitcoin pump over how literally any rally works today has different people saying “yeah this makes way more sense” because of the role of actual distinct buyers. this article is just using its platform to surface that explanation higher

bouncycastle 7y ago

Some great alternatives Tether and Bitfinex are MakerDAO and Uniswap. The first one offers a decentralised & transparent stable-coin called DAI. The second one is a decentralized exchange that is also 100% transparent. These are transparent because they're running as programs on top of of a blockchain (Ethereum). Each and every state change is recorded and the systems can be audited in real-time. The Maker DAI stablecoin currency is backed by collateral (Ether), and it's currently overcollateralized by about 350%. The system has been remarkably stable, even in the face of the bear market, which resulted on some crazy swings in the price of Ether. DAI also has a few fiat on-ramps, including Coinbase and Kraken. You can also mint DAI yourself - there's a tutorial on Coinbase where they give you $20 DAI for free, https://www.coinbase.com/earn https://www.coinbase.com/earn What's more is that since these systems are essentially programs (they can be used and called by other programs as "library" ) which means that they can be used as lego bricks to build new things. Some examples are "Pool Together - https://www.pooltogether.us" https://www.pooltogether.us", which is a no-loss lottery system. It combines MakerDao's DAI coin and a decentralized lending system called "Compound". Please be mindful that all the above projects are still considered experiments and cutting-edge stuff. It will probably still take a few years to mature - however, a lot of new opportunities seem to be opening up in this area.

ShorsHammer 7y ago
Are you saying Tether isn't run on a blockchain? Because it most certainly is. The SEC crypto tsar recently had quite negative comments about MakerDAO at SWSX, as in they may be in breach of securities law. Something to note. The decentralized nature still makes it far less riskier to the end consumer.
- chrisco255 7y ago
  Well the Tether transactions are run on a centralized blockchain, but the underlying value of Tether is based entirely on trust in Bitfinex backing it with actual dollars. As for Maker, I really don't know how the SEC would begin to shut it down if it wanted to. It's entirely smart contract driven and it's live on the Ethereum blockchain, which is truly decentralized. Surely we need to update securities law for the 21st century as I'm not sure the Howey test had blockchain era in mind.

chrisco255 7y ago

From my perspective, watching the markets since 2013, the 2017 boom was caused by Ethereum. Before Bitcoin shot up, Ethereum had shot up from $8 in December 2016 to nearly $50 a couple months later. Now, Ethereum is a novel innovation on blockchain tech. The smart contract hype was very real at the time. (For the record, I still think smart contracts have tremendous potential) ETH had navigated a fork, secured corporate alliances, setup several foundations to promote work and was starting to generate a lot excitement around projects like Augur, Ox, etc. Then on top of that, the ICO boom happened when several projects raised tens of millions of dollars. That caused a run on ETH. ETH boomed and then BTC followed, at least for the 2017 boom. And then the speculators danced between altcoins, Tether, Bitcoin and ETH, trying to maximize their returns while paying little attention to fundamental adoption. I think we've seen certain technologies take over markets very quickly in the past couple decades, like desktops and wifi and mobile and then smart phones and social media...that we've gotten used to rapid disruption in tech. However, with financial tech like blockchain and crypto, it necessitates slow adoption. Why is this? Because it's real money on the line. It's cool to move fast and break things when it's an app or a fitness tracker, but when it's significant amounts of money on the line, maturity, trust, and security are tantamount. I still think blockchain will win in the long run against legacy tech. But it will be a slow disruption.

grubles 7y ago
Bitcoin has smart contracts, and has for many years now. Ethereum's marketing for the phrase is kind of misleading. Why the downvoting? Apparently a number of people haven't heard of Bitcoin Script, or are upset I pointed out this very factual item about Bitcoin? Seems somewhat odd.
- bitcoinbutter 7y ago
  Ethereum's smart contracts are obviously more developer friendly and easier to implement. Ethereum smart contracts are the go-to for dapps, despite having a significantly smaller userbase and market cap than bitcoin. To say Bitcoin smart contracts are equal to Ethereum smart contracts would be akin to comparing Myspace to Facebook.

throwaway122378 7y ago

They ran the complete opposite article yesterday. Fake news

roywiggins 7y ago
This is an opinion column. Opinion columnists frequently disagree with each other, that's why they're called opinions.
- fierarul 7y ago
  Then it sure is nice that HN shows (bloomberg.com) in there. Bloomberg can get hits by showing conflicting views or just about anything. I suggest HN be changed to show opinion sections of major sites differently.
  - buboard 7y ago
    It should first remove paywalls. The same opinions can be found in tens of blogs, most likely with the same arguments. IT's a bit rude to the publishers that we re posting paywalled content here, often with bypass links.
- buboard 7y ago
  Alright, but i m expecting "Actually, it was only one Tether Trader" tomorrow.

askmike 7y ago

> Perhaps the takeaway is that when banks refuse to do business with crypto traders, or when a government bans trading altogether, it doesn’t stop traders from trading. It just forces them to find creative solutions. If it were easy for crypto exchanges to use the traditional banking system, there would be no need for Tether at all. This is a point not many seem to understand.

EdwardDiego 7y ago
The reason it's not easy is because of anti-money laundering/know your customer legislation - which directly contradicts the few currency uses Bitcoin has at this point.

deleted 7y ago

[deleted]

neonate 7y ago

http://archive.is/dhAsU http://archive.is/dhAsU

dnprock 7y ago

I find it difficult to defend Tether. I leave the investigation to regulators. But assume Tether team has good intention and try to do the right thing, it is easy to make mistake. Tether software may have had a bug that inflates Tether coin over reserve. This is a problem with permissioned money system. It is difficult to audit and verify transactions. I think Libra is an improvement. They use open source software. But it is still a permissioned money system. There's room for error. Who would be responsible for the damage? I think every participants need to share the responsibility. I've advocated for a new category: decentralized and digital native crypto with constant inflation. Permissionless is a key feature. It provides many advantages over permissioned. https://bitflate.org/post/2019/11/05/tether-problem-highlight-the-need-for-inflating-cryptocurrency.html https://bitflate.org/post/2019/11/05/tether-problem-highligh...

CRUDite 7y ago

The bitcoin "bubble" was caused by an invention in the ecosystem. Bitcoin was "stuck" for a long time around $300, because it is not much good @ 10 mins tx time. Then a solution was published, the lightning network whitepaper. A mere 5 days later volume exploded and a period of 6 months of accumulation occurred where price was contained by large bid / ask walls. Volume dropped off after this point and the price rocketed up. The ultimate destination was the joint mcap of visa and mastercard, which it would in theory now be able to compete with at some point, which worked out at 18k per coin at the time. The collapse afterward is due to the fact that it must be used in this way and at that tx magnitude to justify that valuation. Your basic buy the rumour sell the news variation. It might thus range around 10k for a long time. Whether those who accumulated used bots or tethers or both to drive the price up rather than it being organic price action is debatable, and it seems difficult to prove. What is interesting to me is how fast money went to work on this after the technical hurdle was overcome.