7 ms·

When it removes the peg to the dollar, how it's supposed to be stabilized? "bunch of random collateral" isn't quite convincing. How are people going to trust th

by Geee 6y ago

When it removes the peg to the dollar, how it's supposed to be stabilized? "bunch of random collateral" isn't quite convincing. How are people going to trust that the collateral, like tokenized bonds, are actually valuable? I'm not going to trust such a system. Money based on trust is dead. The only purpose of this currency is to enrich those who invented it.

rglullis 6y ago
On one hand, yes, you are right. This "it's turtles all the way down" approach regarding valuation of tokenized assets is a huge source of systemic risk and those that want to be able to get greenbacks will be better off by using centralized stable tokens (like Circle's USDC or STASIS' EURS) On the other hand, any project that can be transparent about its reserves (whether though "smart contracts" or plain old armies of bean counters writing actual compliant reports to Uncle Sam) is welcome by my book. Anything that can take the influence and dominance from Tether in the crypto market should be brought to the table and considered for analysis. > The only purpose of this currency is to enrich those who invented it. Isn't that exactly what's happening with the existing relationship between governments, their central banks and the financial elites? I'm not a fan of Reserve either, much less of this Silicon Valley idea of governance, but as long as they they make good on their deals and make their money by providing stability in exchange of absorbing risks, I don't see anything immoral or unethical about the fact that private individuals and organizations can go on to try to create an alternative to central banks.
- codebolt 6y ago
  Remove the unconstrained supply of Mickey Mouse money (Tether) and eliminate wash trading, and you will watch Bitcoin descend into the abyss rather quickly.
  - rglullis 6y ago
    Codebolt calls for the death of BTC, news at 11. Yeah, yeah, I get it. No one can really know the true price of BTC. It's all speculation. Nothing to back it up... what else do you have? Understand this: there is a large number of people that will keep working with BTC (and crypto) regardless of price and current market conditions. There is a large number of people that don't care about the price. People will keep building things on crypto, regardless of price and it will become more and more of an alternative to existing financial/economical systems.
    - codebolt 6y ago
      Speculation? You can look at the raw market data right here and see several things that should make any critically minded person go 'hmmm': https://coinmarketcap.com/currencies/tether/ https://coinmarketcap.com/currencies/tether/ How can Tether have a daily trading volume of almost 100 bln on a supply of 'just' 24 bln? Seems rather obvious that the vast majority of crypto trades are done by HFT algos and not people (or worse, that the actual supply of Tether is much higher than the reported supply). You can't deny that Tether is a very essential component in the crypto markets. It is also an unregulated, unaudited private entity operating outside western jurisdictions, with a long history of controversies: https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/ https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/ Hardly the group you'd want managing a global currency system.
      - rglullis 6y ago
        You do know what you are saying may be new to a few naive or ignorant newcomers, but that is already priced in by any reasonable person involved in the space, right? [0] Yes, I completely agree what Tether is doing is criminal and that they will likely be responsible for the next crash. The question is: so what? The important thing about crypto is its anti-fragility. Every crash brought a correction that made the system more robust and less prone to be extinct. It's not going to be crypto's first crash and it is certainly not going to be the last. [0]: https://www.reddit.com/r/UniSwap/comments/l43yka/what_happens_to_my_lp_tokens_if_thr_value_of_one/gknihc4/ https://www.reddit.com/r/UniSwap/comments/l43yka/what_happen...
        codebolt 6y ago
        > already priced in Nothing can be effectively priced in as long as you have an artificial and illegitimate source of liquidity pushing the price up. Such a market doesn't allow for rational pricing mechanisms to manifest.
        rglullis 6y ago
        You are right, my term was not correct. What perhaps I would say is that those are aware of the issue are already putting Tether in their risk calculations and their exposures. If it were not for Tether, I'd be way holding way more non-stable crypto that I am now. Right now the only non-stable token that I am buying is BAT, and mostly because their projects has a clear/transparent way to see where their money is coming from.
  - mlthoughts2018 6y ago
    Personally, I see these issues purely as “buy the dip” investment opportunities. For many speculative investors, the crazy volatility from factors like these is what makes crypto attractive. I see a deeply undervalued long-term value proposition for cryptocurrency, where the big risks for today involve the minefield of manipulation issues that have to be survived to get to the other side where the assets appreciate hugely due to a true valuation mechanism, no longer wanton speculation. In other words, I’ll be happy if bitcoin crashes from Tether (I believe it will, probably to well under $20,000) - that is nothing more than a huge buying opportunity.
    - rglullis 6y ago
      There is a huge moral issue here. You have a company that is manipulating the market like crazy convincing people to put more and more of their savings in crypto, all of it to be taken away. This asymmetry in information alone should be reason to have them eliminated from the market as soon as possible.
      - mlthoughts2018 6y ago
        Totally agree. Getting rid of Tether and holding them responsible sounds great. But that has nothing to do with the long-term valuation of cryptocurrency. The part I object to, which is what many of the earlier comments are trying to say, is some version of “Tether & wash trading is bad, therefore bitcoin is nothing but hype / fake scams.”
arcticbull 6y ago
> The only purpose of this currency is to enrich those who invented it. As is tradition in crypto. It's kind of implicit. [edit] I mean, think about this rationally. You're creating a new token, that doesn't have revenue, a business model, or any way of generating income. And yet it is "100% asset backed, and funded by top Silicon Valley investors." Those investors aren't in it for their health. They don't care about decentralization and trustless whatever. They want to make an ROI. How can you make an honest ROI if you don't have income?
- pmorici 6y ago
  I assume these stable coins are making interest off the assets they hold to back the stable coin. Isn’t that the obvious play here?
  - rglullis 6y ago
    Precisely. Provide stability in exchange of absorbing the risks from the underlying assets. It's what every bank could do, even without fractional reserve. I've had my share of discussions with arcticbull, it's amazing how smart he can be when he wants and how clueless he makes himself to be when it comes to acknowledging the upside of crypto projects.
    - arcticbull 6y ago
      It's always a pleasure though! :) I certainly learn a lot from y'all. I should say, I freely acknowledge I don't have all the answers - clueless in some cases even, to borrow a turn of phrase. I find crypto fascinating, like many folks, from a technical perspective. I remain unconvinced about it's practical real-world applications.
      - rglullis 6y ago
        > I remain unconvinced about it's practical real-world applications. When your idea of "real-world" is one where all people have access to stable, robust and functional institutions, it's no surprise that you don't see the necessity of alternatives. Consider it a privilege. And I don't mean it in a derogatory way.

by Geee 6y ago

rglullis 6y ago

On one hand, yes, you are right. This "it's turtles all the way down" approach regarding valuation of tokenized assets is a huge source of systemic risk and those that want to be able to get greenbacks will be better off by using centralized stable tokens (like Circle's USDC or STASIS' EURS) On the other hand, any project that can be transparent about its reserves (whether though "smart contracts" or plain old armies of bean counters writing actual compliant reports to Uncle Sam) is welcome by my book. Anything that can take the influence and dominance from Tether in the crypto market should be brought to the table and considered for analysis. > The only purpose of this currency is to enrich those who invented it. Isn't that exactly what's happening with the existing relationship between governments, their central banks and the financial elites? I'm not a fan of Reserve either, much less of this Silicon Valley idea of governance, but as long as they they make good on their deals and make their money by providing stability in exchange of absorbing risks, I don't see anything immoral or unethical about the fact that private individuals and organizations can go on to try to create an alternative to central banks.

codebolt 6y ago
Remove the unconstrained supply of Mickey Mouse money (Tether) and eliminate wash trading, and you will watch Bitcoin descend into the abyss rather quickly.
- rglullis 6y ago
  Codebolt calls for the death of BTC, news at 11. Yeah, yeah, I get it. No one can really know the true price of BTC. It's all speculation. Nothing to back it up... what else do you have? Understand this: there is a large number of people that will keep working with BTC (and crypto) regardless of price and current market conditions. There is a large number of people that don't care about the price. People will keep building things on crypto, regardless of price and it will become more and more of an alternative to existing financial/economical systems.
  - codebolt 6y ago
    Speculation? You can look at the raw market data right here and see several things that should make any critically minded person go 'hmmm': https://coinmarketcap.com/currencies/tether/ https://coinmarketcap.com/currencies/tether/ How can Tether have a daily trading volume of almost 100 bln on a supply of 'just' 24 bln? Seems rather obvious that the vast majority of crypto trades are done by HFT algos and not people (or worse, that the actual supply of Tether is much higher than the reported supply). You can't deny that Tether is a very essential component in the crypto markets. It is also an unregulated, unaudited private entity operating outside western jurisdictions, with a long history of controversies: https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/ https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/ Hardly the group you'd want managing a global currency system.
    - rglullis 6y ago
      You do know what you are saying may be new to a few naive or ignorant newcomers, but that is already priced in by any reasonable person involved in the space, right? [0] Yes, I completely agree what Tether is doing is criminal and that they will likely be responsible for the next crash. The question is: so what? The important thing about crypto is its anti-fragility. Every crash brought a correction that made the system more robust and less prone to be extinct. It's not going to be crypto's first crash and it is certainly not going to be the last. [0]: https://www.reddit.com/r/UniSwap/comments/l43yka/what_happens_to_my_lp_tokens_if_thr_value_of_one/gknihc4/ https://www.reddit.com/r/UniSwap/comments/l43yka/what_happen...
      - codebolt 6y ago
        > already priced in Nothing can be effectively priced in as long as you have an artificial and illegitimate source of liquidity pushing the price up. Such a market doesn't allow for rational pricing mechanisms to manifest.
        rglullis 6y ago
        You are right, my term was not correct. What perhaps I would say is that those are aware of the issue are already putting Tether in their risk calculations and their exposures. If it were not for Tether, I'd be way holding way more non-stable crypto that I am now. Right now the only non-stable token that I am buying is BAT, and mostly because their projects has a clear/transparent way to see where their money is coming from.
- mlthoughts2018 6y ago
  Personally, I see these issues purely as “buy the dip” investment opportunities. For many speculative investors, the crazy volatility from factors like these is what makes crypto attractive. I see a deeply undervalued long-term value proposition for cryptocurrency, where the big risks for today involve the minefield of manipulation issues that have to be survived to get to the other side where the assets appreciate hugely due to a true valuation mechanism, no longer wanton speculation. In other words, I’ll be happy if bitcoin crashes from Tether (I believe it will, probably to well under $20,000) - that is nothing more than a huge buying opportunity.
  - rglullis 6y ago
    There is a huge moral issue here. You have a company that is manipulating the market like crazy convincing people to put more and more of their savings in crypto, all of it to be taken away. This asymmetry in information alone should be reason to have them eliminated from the market as soon as possible.
    - mlthoughts2018 6y ago
      Totally agree. Getting rid of Tether and holding them responsible sounds great. But that has nothing to do with the long-term valuation of cryptocurrency. The part I object to, which is what many of the earlier comments are trying to say, is some version of “Tether & wash trading is bad, therefore bitcoin is nothing but hype / fake scams.”

arcticbull 6y ago

> The only purpose of this currency is to enrich those who invented it. As is tradition in crypto. It's kind of implicit. [edit] I mean, think about this rationally. You're creating a new token, that doesn't have revenue, a business model, or any way of generating income. And yet it is "100% asset backed, and funded by top Silicon Valley investors." Those investors aren't in it for their health. They don't care about decentralization and trustless whatever. They want to make an ROI. How can you make an honest ROI if you don't have income?

pmorici 6y ago
I assume these stable coins are making interest off the assets they hold to back the stable coin. Isn’t that the obvious play here?
- rglullis 6y ago
  Precisely. Provide stability in exchange of absorbing the risks from the underlying assets. It's what every bank could do, even without fractional reserve. I've had my share of discussions with arcticbull, it's amazing how smart he can be when he wants and how clueless he makes himself to be when it comes to acknowledging the upside of crypto projects.
  - arcticbull 6y ago
    It's always a pleasure though! :) I certainly learn a lot from y'all. I should say, I freely acknowledge I don't have all the answers - clueless in some cases even, to borrow a turn of phrase. I find crypto fascinating, like many folks, from a technical perspective. I remain unconvinced about it's practical real-world applications.
    - rglullis 6y ago
      > I remain unconvinced about it's practical real-world applications. When your idea of "real-world" is one where all people have access to stable, robust and functional institutions, it's no surprise that you don't see the necessity of alternatives. Consider it a privilege. And I don't mean it in a derogatory way.