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What's the current thoughts on Tether, and how its speculated potential collapse will affect the rest of the ecosystem? Also, what's the latest on scaling? The

What's the current thoughts on Tether, and how its speculated potential collapse will affect the rest of the ecosystem? Also, what's the latest on scaling? The last time I looked into it, Lightening was a thing, but I don't follow it closely.

jackmodern 6y ago
Ignore the tether fud, old news. Lots of stable coins out there now that are fully regulated and partnering with US government (USDC).
- rojeee 6y ago
  Tether's market cap is the largest of all the stable coins and it's unclear that Tether's liabilities are sufficiently collateralised and they can't/won't prove that they are. That's a problem for a product where the unique selling point is "stability". I've been in the Bitcoin/crypto space since 2009 and been through it all. My opinion now is that Bitcoin is an accidental Ponzi scheme - it started out with good intentions but got hijacked by tw*ts. Most of the discourse in the crypto community now looks like a carbon copy of any spread betting / gambling / day trading community. However, instead of a centralised market, there is a Rube Goldberg machine that provides the market infrastructure.
- albntomat0 6y ago
  I'm not looking for a different stablecoin. I think the more accurate way to phrase my concern is this "If I own some Bitcoin, what happens to it if the rumors regarding Tether are true?"
nwah1 6y ago
Tether is still a scam, and the music is still playing. Don't be the last guy. As for lightning, it adds a layer of trust into a system whose reason for existence is trustlessness. If you don't care about trustlessness, you can already have fast and scalable transactions through normal banking.
- ttul 6y ago
  One day, when Tether finally breaks, books will be written, trying to explain how something so plainly fraudulent was able to persist for so long. The game theory behind its persistence is fascinating: only the last guy in stands to lose anything, so each transaction moved through Tether is basically pricing in a tiny chance of collapse.
  - paulgb 6y ago
    I suspect that in retrospect it will seem obvious that a USD-equivalent that is effectively out of US jurisdiction (for the time being) will be seen as providing obvious value to money launderers and criminals, and that the counterparty risk they take is a small price to pay.
    - nwah1 6y ago
      I would personally love to see a writeup on that which shows some data on how big the market is for these illegal bitcoin transactions.
- johnpaulkiser 6y ago
  What do you mean by layer of trust? Bitcoin is definitely not "trustless" its trust minimized for sure. Lightning also minimizes trust in a very similar way. As a user you don't have to make any more assumptions when using lightning than you do already using the bitcoin base layer.
  - nwah1 6y ago
    With bitcoin you can send funds peer to peer. No trusted intermediaries. Routing through a network of exchanges is more like routing through SWIFT or ACH.
    - varajelle 6y ago
      There are no trusted intermediary in lightning. If an intermediary is not behaving, the worst that can happen is that your found are blocked for a small amount of time.
csomar 6y ago
My understanding as someone who trades these markets is that Tether issues has been addressed, although not transparently. We still don't know how the money moves around, and a big portion of its market cap is probably not used for trading bitcoin. They still have the risk of the government clamping down on them but I could hardly see it affecting bitcoin. Maybe a 5-10% price suppression at most.
- arez 6y ago
  how are they addressed? You don't know if it's 1:1 backed, if you don't know that it can collapse any moment
  - csomar 6y ago
    It's hard to fake because people can cash out of Tether. You can sustain a ponzi only if you had tight control of inflow-outflow until it collapses. For example, Okex froze withdrawals a month ago on its exchange. I had a 5 figures there that I was able to move by mirror trading on another exchange. If many people mirror traded (which they probably did), the prices will start to diverge. The prices very slightly diverged, which means a well capitalized third-party had strong conviction/guarantees that Okex is good for the coins/money, and played the reverse trade by injecting even more capital into Okex (they still allowed deposits). If you are trading and notice these patterns, this gives you an idea about the probability that the exchange is going back to business. Same thing for Tether, their liquidity and price stability is even better than USDC.
unixhero 6y ago
Forget Tether
carleverett 6y ago
This chart shows the amount of BTC that's locked into the Lightning Network over time, one measure of adoption: https://embed.theblockcrypto.com/data/on-chain-metrics/bitcoin/lightning-networks-capacity-daily/embed https://embed.theblockcrypto.com/data/on-chain-metrics/bitco... It hasn't grown much in the last year and a half. Personally I don't see Lightning Network winning the battle for high-bandwidth, low-cost transactions against all the other protocols.
- itsdsmurrell 6y ago
  When the block size got blocked at 1MB from those looking to profit from moving transactions to layer 2 options... I switched over to Bitcoin Cash. If you try it out, it operates like Bitcoin has operated for years until the fee market started.
- xur17 6y ago
  A few notes on that: * This only shows public channels. Most wallet apps that people install on their phone, etc open private channels * This shows capacity, it doesn't show throughput. I work at a company that accepts payments over lightning, and our volume has grown a lot over the past year, but our channel capacity really hasn't had to grow all that much (since we withdraw funds to layer 1 regularly)
  - carleverett 6y ago
    Neat! Would you mind sharing the company you work for?
    - xur17 6y ago
      https://foldapp.com https://foldapp.com
lawn 6y ago
The latest on scaling is that not much has happened for years. Lightning cannot scale on it's own as Bitcoin will be the bottleneck, and when fees rise Lightning will stop being efficient for small transactions (since you need to pay an expensive Bitcoin fee to open a channel). Even the Lightning Network whitepaper says it needs much larger blocks. Yet the Bitcoin devs are focusing on Segwit and Schnorr, which are woefully inadequate for any sort of scale. At this point it seems clear if you're looking for Bitcoin scaling, best look at other cryptocurrencies.
webinvest 6y ago
I think Tether is being replaced by USDC. Also I think if Tether was going to collapse, it would’ve done so years ago. Banks live fine with a 90% lending ratio and Tether was likely lending out only 20% of it’s assets. The general person doesn’t understand how a bank works.

jackmodern 6y ago

Ignore the tether fud, old news. Lots of stable coins out there now that are fully regulated and partnering with US government (USDC).

rojeee 6y ago
Tether's market cap is the largest of all the stable coins and it's unclear that Tether's liabilities are sufficiently collateralised and they can't/won't prove that they are. That's a problem for a product where the unique selling point is "stability". I've been in the Bitcoin/crypto space since 2009 and been through it all. My opinion now is that Bitcoin is an accidental Ponzi scheme - it started out with good intentions but got hijacked by tw*ts. Most of the discourse in the crypto community now looks like a carbon copy of any spread betting / gambling / day trading community. However, instead of a centralised market, there is a Rube Goldberg machine that provides the market infrastructure.
albntomat0 6y ago
I'm not looking for a different stablecoin. I think the more accurate way to phrase my concern is this "If I own some Bitcoin, what happens to it if the rumors regarding Tether are true?"

nwah1 6y ago

Tether is still a scam, and the music is still playing. Don't be the last guy. As for lightning, it adds a layer of trust into a system whose reason for existence is trustlessness. If you don't care about trustlessness, you can already have fast and scalable transactions through normal banking.

ttul 6y ago
One day, when Tether finally breaks, books will be written, trying to explain how something so plainly fraudulent was able to persist for so long. The game theory behind its persistence is fascinating: only the last guy in stands to lose anything, so each transaction moved through Tether is basically pricing in a tiny chance of collapse.
- paulgb 6y ago
  I suspect that in retrospect it will seem obvious that a USD-equivalent that is effectively out of US jurisdiction (for the time being) will be seen as providing obvious value to money launderers and criminals, and that the counterparty risk they take is a small price to pay.
  - nwah1 6y ago
    I would personally love to see a writeup on that which shows some data on how big the market is for these illegal bitcoin transactions.
johnpaulkiser 6y ago
What do you mean by layer of trust? Bitcoin is definitely not "trustless" its trust minimized for sure. Lightning also minimizes trust in a very similar way. As a user you don't have to make any more assumptions when using lightning than you do already using the bitcoin base layer.
- nwah1 6y ago
  With bitcoin you can send funds peer to peer. No trusted intermediaries. Routing through a network of exchanges is more like routing through SWIFT or ACH.
  - varajelle 6y ago
    There are no trusted intermediary in lightning. If an intermediary is not behaving, the worst that can happen is that your found are blocked for a small amount of time.

csomar 6y ago

My understanding as someone who trades these markets is that Tether issues has been addressed, although not transparently. We still don't know how the money moves around, and a big portion of its market cap is probably not used for trading bitcoin. They still have the risk of the government clamping down on them but I could hardly see it affecting bitcoin. Maybe a 5-10% price suppression at most.

arez 6y ago
how are they addressed? You don't know if it's 1:1 backed, if you don't know that it can collapse any moment
- csomar 6y ago
  It's hard to fake because people can cash out of Tether. You can sustain a ponzi only if you had tight control of inflow-outflow until it collapses. For example, Okex froze withdrawals a month ago on its exchange. I had a 5 figures there that I was able to move by mirror trading on another exchange. If many people mirror traded (which they probably did), the prices will start to diverge. The prices very slightly diverged, which means a well capitalized third-party had strong conviction/guarantees that Okex is good for the coins/money, and played the reverse trade by injecting even more capital into Okex (they still allowed deposits). If you are trading and notice these patterns, this gives you an idea about the probability that the exchange is going back to business. Same thing for Tether, their liquidity and price stability is even better than USDC.

unixhero 6y ago

Forget Tether

carleverett 6y ago

This chart shows the amount of BTC that's locked into the Lightning Network over time, one measure of adoption: https://embed.theblockcrypto.com/data/on-chain-metrics/bitcoin/lightning-networks-capacity-daily/embed https://embed.theblockcrypto.com/data/on-chain-metrics/bitco... It hasn't grown much in the last year and a half. Personally I don't see Lightning Network winning the battle for high-bandwidth, low-cost transactions against all the other protocols.

itsdsmurrell 6y ago
When the block size got blocked at 1MB from those looking to profit from moving transactions to layer 2 options... I switched over to Bitcoin Cash. If you try it out, it operates like Bitcoin has operated for years until the fee market started.
xur17 6y ago
A few notes on that: * This only shows public channels. Most wallet apps that people install on their phone, etc open private channels * This shows capacity, it doesn't show throughput. I work at a company that accepts payments over lightning, and our volume has grown a lot over the past year, but our channel capacity really hasn't had to grow all that much (since we withdraw funds to layer 1 regularly)
- carleverett 6y ago
  Neat! Would you mind sharing the company you work for?
  - xur17 6y ago
    https://foldapp.com https://foldapp.com

lawn 6y ago

The latest on scaling is that not much has happened for years. Lightning cannot scale on it's own as Bitcoin will be the bottleneck, and when fees rise Lightning will stop being efficient for small transactions (since you need to pay an expensive Bitcoin fee to open a channel). Even the Lightning Network whitepaper says it needs much larger blocks. Yet the Bitcoin devs are focusing on Segwit and Schnorr, which are woefully inadequate for any sort of scale. At this point it seems clear if you're looking for Bitcoin scaling, best look at other cryptocurrencies.

webinvest 6y ago

I think Tether is being replaced by USDC. Also I think if Tether was going to collapse, it would’ve done so years ago. Banks live fine with a 90% lending ratio and Tether was likely lending out only 20% of it’s assets. The general person doesn’t understand how a bank works.