4 ms·

USDT failed a LONG time ago.

rawtxapp 5y ago
What is failure specifically? USDT (despite it's shadiness) trades at 1USDT:1$ on pretty much all exchanges and you can short it if you truly believe it'll flop anytime soon.
- rednerrus 5y ago
  The question is are there really $1 USD for every $1USDT? The answer is surely not. You may be able to get your money out today but in the long run there is nearly a 100% chance you lose it all. https://bitfinexed.medium.com/tether-is-setting-a-new-standard-for-transparency-that-is-untethered-from-facts-deec42c473bb https://bitfinexed.medium.com/tether-is-setting-a-new-standa...
  - rawtxapp 5y ago
    There isn't 1$ for every 1USDT, they said so themselves. It will eventually fail != "USDT failed a LONG time ago". If you truly believe what you say, then you should definitely consider shorting it, if you're right you'll make a lot of money.
    - Hallucinaut 5y ago
      The failure spoken of is clearly the breach of the promise (and associated changing of literature) to back each by one USD. However I'm very interested in the idea of shorting a "stable"coin. Who would possibly enter into this contract for an asset that has an upside of zero and a (potential, long-term, depending on your bearishness) downside of 100%? In any case, with the strong likelihood Tether themselves are effectively shorting it by selling it unsecured by any real assets it would be a tough market to get in on.
      - rawtxapp 5y ago
        Which is why I asked what they meant by failure specifically. You have to borrow it to short it, so there's a 1-3% APY cost associated with shorting it. You have to calculate the tradeoff of the likelihood of it going to 0 within the next couple of years vs the cost of borrowing USDT to short it. Say you short 1M$ worth of Tether, it goes belly up within 4 years, it cost you like ~40k$ to short it, but your upside is 1M$. If it never actually fails because the market is irrational or by some miracle Tether was doing the right thing, then your cost depends on when you close your position. It's a relatively cheap way of making lots of money depending on your conviction on Tether's likelihood to fail.
      - Budabellly 5y ago
        I bookmarked this comment from a few months ago on how one might make such a trade: https://news.ycombinator.com/item?id=26174690 https://news.ycombinator.com/item?id=26174690
    - johnnyfived 5y ago
      Nobody that's ripping on tether in here is going to short it lol, they're not that confident in their own words.
slownews45 5y ago
No kidding - each of the these crypto folks go "trust us" - and then even the simplest things (1:1 US Dollar backed coin - seriously - how hard is this!) turn out to be a full of crap and lies. And if you believe USDT has been 1:1 backed by us dollars for its full history - dream on. If you believed they would actually get audited when they said they would - hahah.
- fleddr 5y ago
  Your statement "how hard is this" shows your complete incompetence regarding the backing of anything. Nothing of value is backed in our world. If a mere 7% of bank account holders go to the bank to collect their money, the bank collapses. They don't have your money, it's not there. If all owners of gold (gold value papers) today claim their physical gold, it can't be done. There's 400% more value paper compared to the total supply above ground. If all owners of Apple stock today decide to sell their stock all at the exact same moment, they won't get out the full market cap. Because the entire thing crashed before that. But that won't happen, because the exchange will simply stop the trade. Which is the same thing crypto exchanges do when things get too heated.
  - mike00632 5y ago
    The difference is that Apple doesn't claim to have a 1:1 reserve of dollars to back the value of their stock. It should matter to you that the USDT folks are lying (over something important).
    - fleddr 5y ago
      We're in agreement that lying about backing is wrong in any case, no argument there. I in particular object to the notion that things of value should be 100% backed by actual USD, in bank accounts or cash. That's not how liquidity works, yet a lot of people intuitively believe this to be so.
      - Dylan16807 5y ago
        They said it wasn't hard, not that it was necessary in all circumstances. Banks and gold deposits re-lend money because it makes them money and they can sell the storage service for cheaper. If you want something that won't be loaned back out then you can buy that service pretty easily. And stock prices changing is a very different thing. The actual supply is there, and entire markets caps can and do get sold in things like mergers.

What is failure specifically? USDT (despite it's shadiness) trades at 1USDT:1$ on pretty much all exchanges and you can short it if you truly believe it'll flop anytime soon.

rednerrus 5y ago
The question is are there really $1 USD for every $1USDT? The answer is surely not. You may be able to get your money out today but in the long run there is nearly a 100% chance you lose it all. https://bitfinexed.medium.com/tether-is-setting-a-new-standard-for-transparency-that-is-untethered-from-facts-deec42c473bb https://bitfinexed.medium.com/tether-is-setting-a-new-standa...
- rawtxapp 5y ago
  There isn't 1$ for every 1USDT, they said so themselves. It will eventually fail != "USDT failed a LONG time ago". If you truly believe what you say, then you should definitely consider shorting it, if you're right you'll make a lot of money.
  - Hallucinaut 5y ago
    The failure spoken of is clearly the breach of the promise (and associated changing of literature) to back each by one USD. However I'm very interested in the idea of shorting a "stable"coin. Who would possibly enter into this contract for an asset that has an upside of zero and a (potential, long-term, depending on your bearishness) downside of 100%? In any case, with the strong likelihood Tether themselves are effectively shorting it by selling it unsecured by any real assets it would be a tough market to get in on.
    - rawtxapp 5y ago
      Which is why I asked what they meant by failure specifically. You have to borrow it to short it, so there's a 1-3% APY cost associated with shorting it. You have to calculate the tradeoff of the likelihood of it going to 0 within the next couple of years vs the cost of borrowing USDT to short it. Say you short 1M$ worth of Tether, it goes belly up within 4 years, it cost you like ~40k$ to short it, but your upside is 1M$. If it never actually fails because the market is irrational or by some miracle Tether was doing the right thing, then your cost depends on when you close your position. It's a relatively cheap way of making lots of money depending on your conviction on Tether's likelihood to fail.
    - Budabellly 5y ago
      I bookmarked this comment from a few months ago on how one might make such a trade: https://news.ycombinator.com/item?id=26174690 https://news.ycombinator.com/item?id=26174690
  - johnnyfived 5y ago
    Nobody that's ripping on tether in here is going to short it lol, they're not that confident in their own words.

slownews45 5y ago

No kidding - each of the these crypto folks go "trust us" - and then even the simplest things (1:1 US Dollar backed coin - seriously - how hard is this!) turn out to be a full of crap and lies. And if you believe USDT has been 1:1 backed by us dollars for its full history - dream on. If you believed they would actually get audited when they said they would - hahah.

fleddr 5y ago
Your statement "how hard is this" shows your complete incompetence regarding the backing of anything. Nothing of value is backed in our world. If a mere 7% of bank account holders go to the bank to collect their money, the bank collapses. They don't have your money, it's not there. If all owners of gold (gold value papers) today claim their physical gold, it can't be done. There's 400% more value paper compared to the total supply above ground. If all owners of Apple stock today decide to sell their stock all at the exact same moment, they won't get out the full market cap. Because the entire thing crashed before that. But that won't happen, because the exchange will simply stop the trade. Which is the same thing crypto exchanges do when things get too heated.
- mike00632 5y ago
  The difference is that Apple doesn't claim to have a 1:1 reserve of dollars to back the value of their stock. It should matter to you that the USDT folks are lying (over something important).
  - fleddr 5y ago
    We're in agreement that lying about backing is wrong in any case, no argument there. I in particular object to the notion that things of value should be 100% backed by actual USD, in bank accounts or cash. That's not how liquidity works, yet a lot of people intuitively believe this to be so.
    - Dylan16807 5y ago
      They said it wasn't hard, not that it was necessary in all circumstances. Banks and gold deposits re-lend money because it makes them money and they can sell the storage service for cheaper. If you want something that won't be loaned back out then you can buy that service pretty easily. And stock prices changing is a very different thing. The actual supply is there, and entire markets caps can and do get sold in things like mergers.