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It’s the in-market ramp because exchanges can’t afford to cash you out with the dollars you put in. And this is where it becomes a scam. People need/want the
by cwhiz 6y ago
It’s the in-market ramp because exchanges can’t afford to cash you out with the dollars you put in.
And this is where it becomes a scam.
People need/want the ability to cash out to sit on the sidelines during periods of extreme volatility, market declines, etc. Crypto exchanges can’t literally cash you out, because they don’t have the dollars.
So here’s a brilliant idea. I’ll just print a Tether and give it to you. It’s pegged to the dollar, and so you don’t care.
But wait, aren’t there obvious flaws with this plan? Isn’t this just punting the actual problem down the road? Who controls how many tethers are printed? What if everyone wants to convert their tethers to dollars? Are the tethers actually backed by dollars?
And, most importantly, can’t the price of crypto be artificially manipulated upward by the printing of additional tethers?
If you want the answer to these questions, get in line with the rest of us.
- gruez 6y ago>Crypto exchanges can’t literally cash you out, because they don’t have the dollars. Why not? For every seller there must be a buyer, so the money has to be around somewhere.
- cwhiz 6y agoMoney laundering, scams, insolvency, lack of regulations, lack of clearinghouses, etc. Lots of reasons. Tether wouldn't exist if Bitfinex was able to cash out dollars on demand.
- gruez 6y ago> Tether wouldn't exist if Bitfinex was able to cash out dollars on demand. Is there evidence of this, ie. mass reports of bitfinex clients not being able to withdraw?
- cwhiz 6y agohttps://www.forbes.com/sites/stevenehrlich/2019/05/02/after-an-850-million-controversy-what-everyone-should-know-about-bitfinex-tether-and-stablecoins/?sh=46384aa8492f https://www.forbes.com/sites/stevenehrlich/2019/05/02/after-... Bitfinex, and Tether, are under scrutiny from multiple state attorneys general.
- gruez 6y agoThat doesn't answer my question. There's definitely shady stuff happening at bitfinex/tether and they should be investigated, but that's not evidence for your claim that bitfinex issued tethers because they couldn't service withdraws.
- lubesGordi 6y agoIf you're a miner, then you've got bitcoin no one's ever bought.
- gruez 6y agoThat's true, but how is this relevant to this discussion? We're talking about exchanges, not the bitcoin system as a whole.
- thebean11 6y agoCan you give an example where you can put real dollars in and only get tether out? The major American exchanges have ACH withdrawals (obviously). Coinbase + Kraken + Gemini have massive liquidity in real dollars. You could cash out millions per day without moving the needle.
- arcticbull 6y agoBitfinex.
- thebean11 6y agoYou can withdraw USD on Bitfinex if you verify you identity, 10k minimum.
- deleted 6y ago[deleted]