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> Sure, tether wasn’t backed at all times (probably is now), Even Tether admitted that they weren’t backed by funds, and that was before they printed most of t

> Sure, tether wasn’t backed at all times (probably is now), Even Tether admitted that they weren’t backed by funds, and that was before they printed most of their current supply: https://www.coindesk.com/tether-lawyer-confirms-stablecoin-74-percent-backed-by-cash-and-equivalents https://www.coindesk.com/tether-lawyer-confirms-stablecoin-7... I don’t understand why anyone would be in a rush to take them at their word when every new piece of evidence demonstrates that Tether’s operators are not interested in behaving honestly. > Also banks do this all the time, every time they issue a loan for instance. The bank only keeps 10-30% collateral on your home. Fractional reserve banking doesn’t mean banks can simply print more money than they have on the books. Regardless, if a bank loses funds due to fraud or government intervention or whatever, they can’t simply continue pretending they had the money all along. I don’t understand the desire to pretend that what Tether is doing is normal or good for the crypto community. It’s not.

wpietri 6y ago
I think it has a pretty simple explanation. The crypto community started with a few dedicated idealists. But it quickly attracted loons, fantasists, scammers, and get-rich-quick dreamers, along with some reasonable people interested in the hype. Over time, as the space has produced almost no actual utility and generated billions in theft, fraud, and losses, the reasonable people generally got out, often with fingers burned. A few idealists remain. But by now the dominant group are the people low on sense and scruples who are hoping to Make Money Fast, so anything that keeps the industry aloft is great by them. That's how bubbles work, alas. The dot-com bubble was less extreme, but still at the end there was all sorts chicanery that made no sense to a vaguely rational actor. We saw it again in the mortgage bubble. There was one bank CEO who stayed out of the more dubious mortgages; when questioned, he said, "If something grows too fast, it's a weed." But there were plenty of hucksters saying that everything was normal and good. The good news is that bubbles eventually pop. I loved the post dot-com bubble period! Most of the MBA-holding locusts who had rushed in went away again. I hope the people truly interested in digital financial innovation enjoy a similar period of quiet soon.
- 35fbe7d3d5b9 6y ago
  > so anything that keeps the industry aloft is great by them. Bingo. Tether being less than 100% backed isn't a surprise. Heck, they've admitted it publicly for over a year now - this is, however, the first time we've seen how big the gap truly is. But the peg is still holding, which means that 1) the market had already priced in the risk of USDT being 14% rather than 100% backed, or 2) the market for USD:USDT is not rational.

wpietri 6y ago

I think it has a pretty simple explanation. The crypto community started with a few dedicated idealists. But it quickly attracted loons, fantasists, scammers, and get-rich-quick dreamers, along with some reasonable people interested in the hype. Over time, as the space has produced almost no actual utility and generated billions in theft, fraud, and losses, the reasonable people generally got out, often with fingers burned. A few idealists remain. But by now the dominant group are the people low on sense and scruples who are hoping to Make Money Fast, so anything that keeps the industry aloft is great by them. That's how bubbles work, alas. The dot-com bubble was less extreme, but still at the end there was all sorts chicanery that made no sense to a vaguely rational actor. We saw it again in the mortgage bubble. There was one bank CEO who stayed out of the more dubious mortgages; when questioned, he said, "If something grows too fast, it's a weed." But there were plenty of hucksters saying that everything was normal and good. The good news is that bubbles eventually pop. I loved the post dot-com bubble period! Most of the MBA-holding locusts who had rushed in went away again. I hope the people truly interested in digital financial innovation enjoy a similar period of quiet soon.

35fbe7d3d5b9 6y ago
> so anything that keeps the industry aloft is great by them. Bingo. Tether being less than 100% backed isn't a surprise. Heck, they've admitted it publicly for over a year now - this is, however, the first time we've seen how big the gap truly is. But the peg is still holding, which means that 1) the market had already priced in the risk of USDT being 14% rather than 100% backed, or 2) the market for USD:USDT is not rational.