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I too believe it's a massive ponzi scheme. However, I wasn't even aware (not trading crypto at all) that Binance offer 'affiliate' programs where influencers c

I too believe it's a massive ponzi scheme. However, I wasn't even aware (not trading crypto at all) that Binance offer 'affiliate' programs where influencers can earn Tethers. It's kind of funny - it works literally like a ponzi scheme - influencers bring in new 'investors' and earn 'tethers' (which are just printed out of thin air) - they can buy crypto with those tethers - and then guess what ? They sell them to the new 'investors' they just brought in. It works until it doesn't.

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gruez 5y ago
Is there a meaningful difference between them paying the influencers in USDT compared to paying them in USD? It doesn't seem hard to convert the USDT to USD at par so I can't see the difference.
- throayobviousl 5y ago
  >Is there a meaningful difference between them paying the influencers in USDT compared to paying them in USD? Yes. You print USDT and pay someone then lie about not printing it. For the love of god, don't hold any USDT. Its really convenient to exchange cryptos but don't be holding it when the cards fall.
  - gruez 5y ago
    So the following is okay: 1. bitfinex asks some influencer to do some influencer things for them 2. bitfinex hands them a $100 bill but the following isn't fine: 2. bitfinex hands them 100 USDT tokens But hold on, corporations don't often pay people using paper bills, they pay them using ACH, so is the following fine? 2. bitfinex transfers $100 to their bank using ACH Probably fine right, given that there isn't really a difference between getting paid in ACH vs paper bills. But some companies are old fashioned and don't do ACH transfers, they issue checks instead. So is the following fine? 2. bitfinex writes them a check for $100 Well, a check is just an IOU right? It's only a promise to pay them something. If you try to deposit the check and the check bounces it's not like the FDIC will save you. You'll have to chase after them for it. Given that fact, and recognizing that USDT is just an IOU, is there any difference between the above and 2. bitfinex gives them 100 USDT tokens ?
    - kmonsen 5y ago
      Hmm, was writing a longer answer to you, but ended up agreeing without expecting to. Bitfinex could either issue some USDT, convert it to USD and hand that to the influencer, or issue some USDT and hand that to the influencer. Can't really see the difference here, except if they hand over USDT that will hype the market a bit as well? As long as the conversion works they two are functionally the same.
      - fbernier 5y ago
        They control the issuance of USDT, something they can't do with USD. They sure hope influencers don't immediately convert it to USD and buy other bitcoin or other cryptos with it instead. That way, they keep the USD and the influencer helps pumping the price.
    - dheera 5y ago
      If I were that influencer I would cash the check and then provide services. Same with USDT. Cash it for Bitcoin and then provide services.
    - belltaco 5y ago
      It's a crime to write bad checks. That's what the article is all about.
- kemonocode 5y ago
  The difference is, of course, that exchanges want to encourage liquidity in USDT and they might not have the means to offer USD, especially if they're based in regions with tighter regulations so bank wires are out of the question. Just because they can convert USDT to USD doesn't necessarily mean they can offer the same means to everybody else. Even the staunchest believer in crypto will have a hunch there's something funny going on with Tether, but so far most people have been willing to look the other way as Tether and other stablecoins answer a genuine need: how to represent fiat money in the crypto ecosystem when centralized banks refuse to play along with their own downfall.
  - gruez 5y ago
    > The difference is, of course, that exchanges want to encourage liquidity in USDT and they might not have the means to offer USD, especially if they're based in regions with tighter regulations so bank wires are out of the question. Just because they can convert USDT to USD doesn't necessarily mean they can offer the same means to everybody else. 1. is paying influencers USDT going to increase liquidity or decrease it? From a maker-taker model, I'd think that will decrease liquidity because those influencers are probably going to place a market order which reduces liquidity. 2. Is the typical influencers (or the average influencer they hired) going to have trouble converting USDT to USD? My profile of them would be 18-35 year old, middle to upper class, living in a developed country (or at least not a country that's subject to USD sanctions). It doesn't seem hard for those people to accept a USD wire transfer. >Even the staunchest believer in crypto will have a hunch there's something funny going on with Tether, but so far most people have been willing to look the other way as Tether and other stablecoins answer a genuine need: how to represent fiat money in the crypto ecosystem when centralized banks refuse to play along with their own downfall. Agreed, I avoid holding USDT where possible.
  - bb88 5y ago
    > how to represent fiat money in the crypto ecosystem when centralized banks refuse to play along with their own downfall. It seems to me the crypto folks on one hand complain about the governance of USD, but then also "need" it to stabilize their own currency. I thought crypto was the currency of the future.
dheera 5y ago
I mean, Bitcoin is printed out of thin air as well. Just because you compute some hashes you can get something that people value at $40K? It's not that different than if we had a "cat picture" coin that anyone with a cat could manufacture cat pictures at will and sell them. Granted Bitcoin is a little bit more governed in terms of technical difficulty and cryptographic security, but that doesn't change the fact that it's printed out of thin air in a decentralized fashion. If I developed some hardware in secret that could mine Bitcoin 10X faster, there would be nothing illegal about using it to my advantage. If I had a hypothetical device that could print it 1000X faster, I could do that too. Maybe I do. You wouldn't know if I did. Bitcoin is a Ponzi scheme as well. That $1T market cap of Bitcoin? Was there really $1T USD put into it? I don't think so.
- viraptor 5y ago
  People like to say Ponzi scheme, but that's got a specific meaning. Having secret hardware which can mine it faster is not it. Being worth more money than was put in is not it. (Otherwise almost every stock market ticker would be a Ponzi scheme)
  - yqe78 5y ago
    I’m amused that you expect someone who openly thinks money is a joke to grasp the subtleties of what constitutes a Ponzi scheme. I know Ponzi schemes are bad. I think your money is bad. Therefore, your money is a Ponzi scheme. That’s the entirety of the logic employed by the comparison. Just wait until you hear what they’ve done with the term “market capitalization”.
    - dheera 5y ago
      Ponzi schemes mathematically just reduce to a lottery with slightly better odds than most lotteries.
- TheAlchemist 5y ago
  You can't just 'create' a Bitcoin out of thin air and say - hi guys, here is my Bitcoin. But a private entity (based in Bahamas) can do that with Tether. And you can use those to buy 'real' Bitcoins. It works perfectly until somebody tries to convert a big enough amount of those Tethers to real USD. In real world, I'm not sure it's a very good example, so feel free to challenge it, would be: - somebody prints perfect fake 100$ bills and floods the market with them - prices of real goods go up significantly - at one point somebody notice that those fake dollars have a small red dot in a corner - they become instantly worthless, and all prices crash as there is suddenly much less real dollars than everybody thought It's not a great analogy as there is nobody guaranteeing the conversion of those fake dollars to true dollars in the first place. Tether pretends to be doing that - but it appears more and more that they are just printing them out of thin air.

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gruez 5y ago

Is there a meaningful difference between them paying the influencers in USDT compared to paying them in USD? It doesn't seem hard to convert the USDT to USD at par so I can't see the difference.

throayobviousl 5y ago
>Is there a meaningful difference between them paying the influencers in USDT compared to paying them in USD? Yes. You print USDT and pay someone then lie about not printing it. For the love of god, don't hold any USDT. Its really convenient to exchange cryptos but don't be holding it when the cards fall.
- gruez 5y ago
  So the following is okay: 1. bitfinex asks some influencer to do some influencer things for them 2. bitfinex hands them a $100 bill but the following isn't fine: 2. bitfinex hands them 100 USDT tokens But hold on, corporations don't often pay people using paper bills, they pay them using ACH, so is the following fine? 2. bitfinex transfers $100 to their bank using ACH Probably fine right, given that there isn't really a difference between getting paid in ACH vs paper bills. But some companies are old fashioned and don't do ACH transfers, they issue checks instead. So is the following fine? 2. bitfinex writes them a check for $100 Well, a check is just an IOU right? It's only a promise to pay them something. If you try to deposit the check and the check bounces it's not like the FDIC will save you. You'll have to chase after them for it. Given that fact, and recognizing that USDT is just an IOU, is there any difference between the above and 2. bitfinex gives them 100 USDT tokens ?
  - kmonsen 5y ago
    Hmm, was writing a longer answer to you, but ended up agreeing without expecting to. Bitfinex could either issue some USDT, convert it to USD and hand that to the influencer, or issue some USDT and hand that to the influencer. Can't really see the difference here, except if they hand over USDT that will hype the market a bit as well? As long as the conversion works they two are functionally the same.
    - fbernier 5y ago
      They control the issuance of USDT, something they can't do with USD. They sure hope influencers don't immediately convert it to USD and buy other bitcoin or other cryptos with it instead. That way, they keep the USD and the influencer helps pumping the price.
  - dheera 5y ago
    If I were that influencer I would cash the check and then provide services. Same with USDT. Cash it for Bitcoin and then provide services.
  - belltaco 5y ago
    It's a crime to write bad checks. That's what the article is all about.
kemonocode 5y ago
The difference is, of course, that exchanges want to encourage liquidity in USDT and they might not have the means to offer USD, especially if they're based in regions with tighter regulations so bank wires are out of the question. Just because they can convert USDT to USD doesn't necessarily mean they can offer the same means to everybody else. Even the staunchest believer in crypto will have a hunch there's something funny going on with Tether, but so far most people have been willing to look the other way as Tether and other stablecoins answer a genuine need: how to represent fiat money in the crypto ecosystem when centralized banks refuse to play along with their own downfall.
- gruez 5y ago
  > The difference is, of course, that exchanges want to encourage liquidity in USDT and they might not have the means to offer USD, especially if they're based in regions with tighter regulations so bank wires are out of the question. Just because they can convert USDT to USD doesn't necessarily mean they can offer the same means to everybody else. 1. is paying influencers USDT going to increase liquidity or decrease it? From a maker-taker model, I'd think that will decrease liquidity because those influencers are probably going to place a market order which reduces liquidity. 2. Is the typical influencers (or the average influencer they hired) going to have trouble converting USDT to USD? My profile of them would be 18-35 year old, middle to upper class, living in a developed country (or at least not a country that's subject to USD sanctions). It doesn't seem hard for those people to accept a USD wire transfer. >Even the staunchest believer in crypto will have a hunch there's something funny going on with Tether, but so far most people have been willing to look the other way as Tether and other stablecoins answer a genuine need: how to represent fiat money in the crypto ecosystem when centralized banks refuse to play along with their own downfall. Agreed, I avoid holding USDT where possible.
- bb88 5y ago
  > how to represent fiat money in the crypto ecosystem when centralized banks refuse to play along with their own downfall. It seems to me the crypto folks on one hand complain about the governance of USD, but then also "need" it to stabilize their own currency. I thought crypto was the currency of the future.

dheera 5y ago

I mean, Bitcoin is printed out of thin air as well. Just because you compute some hashes you can get something that people value at $40K? It's not that different than if we had a "cat picture" coin that anyone with a cat could manufacture cat pictures at will and sell them. Granted Bitcoin is a little bit more governed in terms of technical difficulty and cryptographic security, but that doesn't change the fact that it's printed out of thin air in a decentralized fashion. If I developed some hardware in secret that could mine Bitcoin 10X faster, there would be nothing illegal about using it to my advantage. If I had a hypothetical device that could print it 1000X faster, I could do that too. Maybe I do. You wouldn't know if I did. Bitcoin is a Ponzi scheme as well. That $1T market cap of Bitcoin? Was there really $1T USD put into it? I don't think so.

viraptor 5y ago
People like to say Ponzi scheme, but that's got a specific meaning. Having secret hardware which can mine it faster is not it. Being worth more money than was put in is not it. (Otherwise almost every stock market ticker would be a Ponzi scheme)
- yqe78 5y ago
  I’m amused that you expect someone who openly thinks money is a joke to grasp the subtleties of what constitutes a Ponzi scheme. I know Ponzi schemes are bad. I think your money is bad. Therefore, your money is a Ponzi scheme. That’s the entirety of the logic employed by the comparison. Just wait until you hear what they’ve done with the term “market capitalization”.
  - dheera 5y ago
    Ponzi schemes mathematically just reduce to a lottery with slightly better odds than most lotteries.
TheAlchemist 5y ago
You can't just 'create' a Bitcoin out of thin air and say - hi guys, here is my Bitcoin. But a private entity (based in Bahamas) can do that with Tether. And you can use those to buy 'real' Bitcoins. It works perfectly until somebody tries to convert a big enough amount of those Tethers to real USD. In real world, I'm not sure it's a very good example, so feel free to challenge it, would be: - somebody prints perfect fake 100$ bills and floods the market with them - prices of real goods go up significantly - at one point somebody notice that those fake dollars have a small red dot in a corner - they become instantly worthless, and all prices crash as there is suddenly much less real dollars than everybody thought It's not a great analogy as there is nobody guaranteeing the conversion of those fake dollars to true dollars in the first place. Tether pretends to be doing that - but it appears more and more that they are just printing them out of thin air.