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No one puts a gun to anyone's head to use it. There are many stablecoins now, with various properties. USDC trades at the same value as USDT https://www.circle.

No one puts a gun to anyone's head to use it. There are many stablecoins now, with various properties. USDC trades at the same value as USDT https://www.circle.com/en/usdc https://www.circle.com/en/usdc Traders value Bitcoin the same in USDT or USDC, and USDT / USDC trades at parity. That implies the market trusts USDT. It doesn't matter what people on HN say, as long as the market agrees.

arcticbull 6y ago
Frankly it's really strange to hear on the one hand: 1. ...that "the feds are debasing our currency through their relentless printing" It is producing a measured, consistent, relatively small 2% rate of inflation over decades and decades. They are of course acting on behalf of an elected body, and ultimately accountable to that body. They're also audited. 2. ...that Tether's relentless, un-audited, 70%-at-most backed printing is fine because the "market trusts it" and "nobody's forcing you to use it." The market trusts it because number go up, and it's in the interest of exactly zero market participants to show the world the emperor has no clothes. It's also not fair to say that "nobody's forced to use it" when everyone is forced to use it. In 2018, 80% of all crypto exchange transactions were conducted in Tether. That makes USD transactions by far the minority. Since arbitrage bots keep the prices in sync, and the majority is USDT, even the USD exchanges follow the USDT prices so long as there exists sufficient liquidity to balance the books. [1] [1] https://www.wsj.com/articles/the-mystery-behind-tether-the-crypto-worlds-digital-dollar-1534089601 https://www.wsj.com/articles/the-mystery-behind-tether-the-c...
- csomar 6y ago
  I'm not sure what is that you are missing? Many exchanges now offer a set of Stable coins. If you had concerns with USDT then you should switch to USDC which so far functions the same as USDT. I did. Many people probably also did. USDT still holds its peg and did hold its peg through some bad price swings. So either it's fully backed or they are doing some magic there. > The market trusts it because number go up, and it's in the interest of exactly zero market participants to show the world the emperor has no clothes. Wouldn't work on extreme market fluctuations. Bitcoin dropped 50% and USDT still hold the peg. Bitcoin then almost tripled in a short period and USDT still hold the peg. I'm not sure if they have full reserves or running some magic; but whatever they are doing is working very well.
  - arcticbull 6y ago
    > I'm not sure if they have full reserves or running some magic; but whatever they are doing is working very well. We know they don't have full reserves because we know 30% of them were seized. [1] > ...but whatever they are doing is working very well. Frauds work until they don't. [1] https://cointelegraph.com/news/head-of-crypto-capital-arrested-in-connection-with-money-laundering https://cointelegraph.com/news/head-of-crypto-capital-arrest...
    - GoblinSlayer 6y ago
      Better call it economics. Not like there's difference, but economics is better for PR.
      - arcticbull 6y ago
        No, there's a big difference lol, the economy is managed and administered at the will of the people to benefit the people. This fraud is being administered by a shady cabal in the BVI with offices in Hong Kong to the benefit of themselves.
    - mtrower 6y ago
      >>> We know they don't have full reserves because we know 30% of them were seized. [1] You suspect they don't have full reserves because you know 30% of them were seized. Presuming "full reserves" means 1:1 backing (what else could it mean, here?), your statement assumes they had exactly 1:1 reserves before the seizure. If they had more than that, your assumption could end up false. So sure, you suspect. From what I've read in this thread, I tend to agree. But I fail to see how you know.
  - javert 6y ago
    > I'm not sure if they have full reserves or running some magic Presumably they buy tether when it's under $1 and sell it when it's over $1 to maintain the peg. Not magic.
- kyuudou 6y ago
  >They are of course acting on behalf of an elected body, and ultimately accountable to that body. That body being whom? >They're also audited. By whom?
  - arcticbull 6y ago
    The Fed determines monetary policy. The president of the United States appoints the Fed board. Ergo the fed is accountable to the people of the United States. [1] [1] https://www.newyorkfed.org/aboutthefed/fedpoint/fed46.html https://www.newyorkfed.org/aboutthefed/fedpoint/fed46.html
    - jkhdigital 6y ago
      But don’t you want to know how the sausage is made? If you truly buy into the “stable, consistent 2% inflation” story then you are eating a very, very large sausage.
      - arcticbull 6y ago
        The whole point of inflation is to disincentivize people from holding money in the first place. Money only has value when it moves, not when it's stuffed under a mattress. I really think we need to bring back mandatory economics classes in high school. The idea is that you use it to invest: into real estate, into equities, into bonds, heck even a savings account collateralizes mortgages. Yes, even your magic beans represent the system working. The system is designed to encourage the continued survival of the most economically fit companies, etc, by your picking winners. Don't hold money. Certainly not more than you need in the event of an emergency.
        jkhdigital 6y ago
        Guess what? Someone, somewhere, is holding every dollar in existence. Someone has to hold it. They don’t just vanish after being used in a transaction. Saying “don’t hold money” tells me everything I need to know about your understanding of economics.
arthurcolle 6y ago
Agreed - some find it useful to have this instrument in order to move dollars to crypto, so it's really no worse than the fiat currencies that we are forced to use, and that many are deciding to move away from. It is a fact that at present, you can't replace your entire life with cryptocurrency transactions, but the actions of the Federal Reserve over the last few months demonstrate how useful it is to have a parallel construct that actually represents an asset that isn't immediately able to be transmogrified by actions of a shadowy cabal (JPow in particular, who with his 50mm nest egg stuck in a hole at BlackRock, has a direct incentive to keep markets afloat) Just my $0.02
wpietri 6y ago
> It doesn't matter what people on HN say, as long as the market agrees. "It doesn't matter what those crazy geologists say, as long volcano hasn't exploded yet."
occamsrazorwit 6y ago
> It doesn't matter what people on HN say, as long as the market agrees. The market can never overvalue or undervalue? Hmm...
- GoblinSlayer 6y ago
  If there was an objective way to assign value, wouldn't it make speculation impossible?

arcticbull 6y ago

Frankly it's really strange to hear on the one hand: 1. ...that "the feds are debasing our currency through their relentless printing" It is producing a measured, consistent, relatively small 2% rate of inflation over decades and decades. They are of course acting on behalf of an elected body, and ultimately accountable to that body. They're also audited. 2. ...that Tether's relentless, un-audited, 70%-at-most backed printing is fine because the "market trusts it" and "nobody's forcing you to use it." The market trusts it because number go up, and it's in the interest of exactly zero market participants to show the world the emperor has no clothes. It's also not fair to say that "nobody's forced to use it" when everyone is forced to use it. In 2018, 80% of all crypto exchange transactions were conducted in Tether. That makes USD transactions by far the minority. Since arbitrage bots keep the prices in sync, and the majority is USDT, even the USD exchanges follow the USDT prices so long as there exists sufficient liquidity to balance the books. [1] [1] https://www.wsj.com/articles/the-mystery-behind-tether-the-crypto-worlds-digital-dollar-1534089601 https://www.wsj.com/articles/the-mystery-behind-tether-the-c...

csomar 6y ago
I'm not sure what is that you are missing? Many exchanges now offer a set of Stable coins. If you had concerns with USDT then you should switch to USDC which so far functions the same as USDT. I did. Many people probably also did. USDT still holds its peg and did hold its peg through some bad price swings. So either it's fully backed or they are doing some magic there. > The market trusts it because number go up, and it's in the interest of exactly zero market participants to show the world the emperor has no clothes. Wouldn't work on extreme market fluctuations. Bitcoin dropped 50% and USDT still hold the peg. Bitcoin then almost tripled in a short period and USDT still hold the peg. I'm not sure if they have full reserves or running some magic; but whatever they are doing is working very well.
- arcticbull 6y ago
  > I'm not sure if they have full reserves or running some magic; but whatever they are doing is working very well. We know they don't have full reserves because we know 30% of them were seized. [1] > ...but whatever they are doing is working very well. Frauds work until they don't. [1] https://cointelegraph.com/news/head-of-crypto-capital-arrested-in-connection-with-money-laundering https://cointelegraph.com/news/head-of-crypto-capital-arrest...
  - GoblinSlayer 6y ago
    Better call it economics. Not like there's difference, but economics is better for PR.
    - arcticbull 6y ago
      No, there's a big difference lol, the economy is managed and administered at the will of the people to benefit the people. This fraud is being administered by a shady cabal in the BVI with offices in Hong Kong to the benefit of themselves.
  - mtrower 6y ago
    >>> We know they don't have full reserves because we know 30% of them were seized. [1] You suspect they don't have full reserves because you know 30% of them were seized. Presuming "full reserves" means 1:1 backing (what else could it mean, here?), your statement assumes they had exactly 1:1 reserves before the seizure. If they had more than that, your assumption could end up false. So sure, you suspect. From what I've read in this thread, I tend to agree. But I fail to see how you know.
- javert 6y ago
  > I'm not sure if they have full reserves or running some magic Presumably they buy tether when it's under $1 and sell it when it's over $1 to maintain the peg. Not magic.
kyuudou 6y ago
>They are of course acting on behalf of an elected body, and ultimately accountable to that body. That body being whom? >They're also audited. By whom?
- arcticbull 6y ago
  The Fed determines monetary policy. The president of the United States appoints the Fed board. Ergo the fed is accountable to the people of the United States. [1] [1] https://www.newyorkfed.org/aboutthefed/fedpoint/fed46.html https://www.newyorkfed.org/aboutthefed/fedpoint/fed46.html
  - jkhdigital 6y ago
    But don’t you want to know how the sausage is made? If you truly buy into the “stable, consistent 2% inflation” story then you are eating a very, very large sausage.
    - arcticbull 6y ago
      The whole point of inflation is to disincentivize people from holding money in the first place. Money only has value when it moves, not when it's stuffed under a mattress. I really think we need to bring back mandatory economics classes in high school. The idea is that you use it to invest: into real estate, into equities, into bonds, heck even a savings account collateralizes mortgages. Yes, even your magic beans represent the system working. The system is designed to encourage the continued survival of the most economically fit companies, etc, by your picking winners. Don't hold money. Certainly not more than you need in the event of an emergency.
      - jkhdigital 6y ago
        Guess what? Someone, somewhere, is holding every dollar in existence. Someone has to hold it. They don’t just vanish after being used in a transaction. Saying “don’t hold money” tells me everything I need to know about your understanding of economics.

arthurcolle 6y ago

Agreed - some find it useful to have this instrument in order to move dollars to crypto, so it's really no worse than the fiat currencies that we are forced to use, and that many are deciding to move away from. It is a fact that at present, you can't replace your entire life with cryptocurrency transactions, but the actions of the Federal Reserve over the last few months demonstrate how useful it is to have a parallel construct that actually represents an asset that isn't immediately able to be transmogrified by actions of a shadowy cabal (JPow in particular, who with his 50mm nest egg stuck in a hole at BlackRock, has a direct incentive to keep markets afloat) Just my $0.02

wpietri 6y ago

> It doesn't matter what people on HN say, as long as the market agrees. "It doesn't matter what those crazy geologists say, as long volcano hasn't exploded yet."

occamsrazorwit 6y ago

> It doesn't matter what people on HN say, as long as the market agrees. The market can never overvalue or undervalue? Hmm...

GoblinSlayer 6y ago
If there was an objective way to assign value, wouldn't it make speculation impossible?