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Have you ever heard of "The Narcissist's Prayer"? It goes like this: That didn't happen. And if it did, it wasn't that bad. And if it was, that's not a big d
by tkfu 5y ago
Have you ever heard of "The Narcissist's Prayer"? It goes like this:
That didn't happen.
And if it did, it wasn't that bad.
And if it was, that's not a big deal.
And if it is, that's not my fault.
And if it was, I didn't mean it.
And if I did...
You deserved it.
Tether defenders are really working their way through the steps here.
18 months ago, it was "That didn't happen." (Tether is 100% backed by USD cash.)
6 months ago, it "wasn't that bad." (It might not be 100% USD cash, but it's cash-equivalent assets like short-term commercial paper.)
Now that there's strong evidence the commercial paper is just fake money shuffling between Tether/Binfinex/other shady crypto investments we get "that's not a big deal." (Look at the way banks work! They only need 4% collateral! Tether's probably got at least that much...)
Next step is finding out that their actual liquidity isn't capable of holding up under a real-life stress test, and the defenders will be talking about "not my fault." (This was a once-in-a-lifetime crash, they couldn't have foreseen it, crypto's still way better than the fiat banking system!)
When thousands of people lose their retirements in a gigantic defi crash, it'll be "you deserved it." (Everyone knows crypto is risky, you shouldn't have believed Tether was the same as USD.)
- onlyrealcuzzo 5y ago> It is difficult to get a man to understand something when his salary depends on his not understanding it.
- A4ET8a8uTh0 5y agoI am commenting here, because I want to save this "And if.." list, because it is beautiful in its simplicity and yet we see it played out over and over again.
- yorwba 5y agoHN also has a "favorite" button you can use to save things for later.
- vtail 5y agoWhere is that favorite button? I have never seen that functionality.
- vtail 5y agoFound it: just click on the comments’s time, and you will see the “favorite” option underneath the link.
- yunohn 5y agoYou have to click through to the comment’s page to use it - it’s not on the main page.
- adventured 5y agoClick on the "n minutes ago" time stamp next to the user name. For example, it's on this page: https://news.ycombinator.com/item?id=28880280 https://news.ycombinator.com/item?id=28880280 That's the perma link for that comment. The favoriting action should maybe exist in the thread as well.
- Scoundreller 5y agoJust fyi that favorites are public.
- jimkleiber 5y ago...I did not know this. So thank you for letting us know.
- atatatat 5y agoBy default..? Oh dear.
- jimkleiber 5y agoI also just learned that by visiting one's own profile, one can see which submissions and comments they've upvoted—which is private, unlike favorites[1]. [1]: https://news.ycombinator.com/item?id=28880623 https://news.ycombinator.com/item?id=28880623
- 8ytecoder 5y agoYou can favorite a comment
- miked85 5y agoJust upvote or favorite it and you can find it in your profile.
- bpodgursky 5y agoMy stance has always been "Tether is a scam, but no worse than the US dollar and normal banking fractional reserves... and even if it collapses, who cares, there are other stablecoins not built on a house of cards." I don't see that stance changing.
- chromaton 5y ago2 differences: 1. You have to have USD to pay taxes, which most Americans have to do. 2. The feds will bail out depositors in banks that have screwed up badly.
- arcticbull 5y agoAlso fractional reserve lending is both how new money is created and how it's backed. When you borrow money from the bank, they create a positive balance in your account and a negative balance in theirs. As you repay the loan, the new money disappears. The money in circulation is backed by the demand created for that dollar at issuance (in that the loan must be repaid).
- chromaton 5y agoBanks also take hard assets as collateral. They can send guys with guns to collect if need be.
- deleted 5y ago[deleted]
- ItsMonkk 5y agoAnd yet, during the recession of 2008 the M2 went up by a 1000 billion dollars, despite the fact that there were millions of houses foreclosed on, their assets tanked, and millions of loans defaulted. Curious how that works. Tether is much worse than the Fed(or would be if equivalent scale), but the Fed is no sweetheart.
- 5y ago
- thebean11 5y agoI haven't seen anyone defending Tether in a really long time
- graeme 5y agoYou can find plenty on twitter. E.g. https://twitter.com/BrutalTrade/status/1449035910658600969 https://twitter.com/BrutalTrade/status/1449035910658600969 Some are paid bots but some are real
- loeg 5y ago> I haven't seen anyone defending Tether in a really long time Check out comments in this discussion by bpodgursky and vmception, for example. Similar comments come out in every Tether article on HN.
- ur-whale 5y ago> Check out comments in this discussion by bpodgursky Here's one from bpodgursky: >My stance has always been "Tether is a scam, Not sure how that's "defending" Tether.
- loeg 5y agoThe full context, which you have chosen to elide, is clearly defensive of Tether[1]: > Tether is a scam, but no worse than the US dollar and normal banking fractional reserves... and even if it collapses, who cares, [1]: https://news.ycombinator.com/item?id=28880411 https://news.ycombinator.com/item?id=28880411
- hkai 5y agoI don't disagree with you, but USDC and USDT are identical in their transparency, yet everyone hates USDT.
- deleted 5y ago[deleted]
- TacticalCoder 5y agoNot by a mile. USDC are emitted by a consortium which the HN unicorn Coinbase is a major part of. They have something like 73% of USDC in actual USD and the rest are corporate bonds / money markets and things like that. It's not 100% USD, but they're 100% backed. Coinbase is a reputable US company ran by US citizens. USDT is operated by shady people with an history of fraud from shady micro countries on the dark list of fiscal havens. They are nothing similar. I do believe there are actual people wiring a lot of real USD / EUR to Coinbase's bank accounts to buy crypto. I'm really not so sure there are people actually wiring lots of money to Tether's bahamas bank accounts. I'm not sure many ever did. I really don't get this: Coinbase is a HN unicorn. Do you think it's a gigantic fraud / scam and there aren't a shitload of real people putting a shitload of freaking real money to Coinbase's very real bank accounts?
- lamontcg 5y ago> Now that there's strong evidence the commercial paper is just fake money Tether is issuing loans of USDT against collateral in the form of crypto and calling that "commercial paper". The whole idea that anyone would be sending $70B of actual USD to Tether is now "fucking ludicrous". But the idea that anyone is selling $70B of crypto to Tether during a massive bull market in crypto (and it should be now quite apparent that this is still a bull market) is also "fucking ludicrous". There's no counterparty that massively stupid for either side of those trades. What makes sense is that people sitting on large cold wallets of BTC are using that as collateral to get USDT loans. They then trade it between themselves and any retail "investors" on a USDT exchange. The loans are USD denominated which provides an incentive to maintain the USDT-USD peg. Since they're loans against collateral and aren't redeemable that removes a lot of the risk of a run on the bank. It is still crypto-backed wildcat banking script, which won't end well. I don't understand why so many people who are Tether-skeptics believe them that their commercial paper is something the banking system would regard as commercial paper. And try graphing Tether issuance denominated in BTC rather than $USD and it is much more stable at around 1M BTC.
- wesapien 5y agoWe need to have crypto death penalty for scams. Ya know, a firing squad.
- graeme 5y agoWould those loans be called commercial paper by any accountant’s definition? We have two data points: * Moore Cayman, the auditing firm doing Tether’s attestations, says they have commercial paper. They risk penalties for blatant lies * Bloomberg reporter Zeke Faux say Tether’s accounts and said they have “a lot” of Chinese commercial paper The massive loophole in the attestation regarding CP is Tether management policy is to value it at redemption value, even if the CP trades below par. So, they could buy the worst quality CP, for say $5 billion, with a redemption value of $30 billion, and the accountants would say “yup, $30 billion of CP per management policy” That seems easier than a pure lie. NYAG has also seen the statements for recent months. I suspect a total lie would carry more risk than the blatant misleadingly accurate statements I outlined above. Some of the paper could also be to crypto exchanges, collateralized the way you say. Then it would technically be CP. Tether has denied taking CP from affiliated entities but they use a narrow definition. Only majority ownership counts as affiliated I believe, since they consider their loans to Celsius non-affiliated despite part owning celsius. Also those Celsius loans are USDT denominated with crypto collateral.
- johanneskanybal 5y agoPretty big and popular strawman you got there. Tether has been a boogie man since forever, the traditional system is infinite times more corrupt. Top voted hackernews comment like this? Probably a pretty amazing time to buy some more and short some yc. edit: remember eth being mentioned here for the first time 6 years ago, how the cycles roll.
- JumpCrisscross 5y ago> When thousands of people lose their retirements in a gigantic defi crash Do we have any evidence this would happen? That ordinary people who didn't know they were investing in Tether would lose money in its collapse? (Honest question.)
- speeder 5y agoI own a bunch of crypto and often people ask me questions. I endlessly have to warn then to never hold tether. The problem is people don't understand what tether is, they assume it is just USD and use it because it is the most popular in many platforms or the outright default settings. Tether crash will be very, very ugly when a lot of people leaving money on their "default" account realise the money all went poof.
- JumpCrisscross 5y agoThank you for your perspective. Are there any U.S. services which default balances into Tether this way? Trying to get a sense for whether the shockwaves will be principally offshore or not.
- Yizahi 5y agoIf hypothetically Tether ever crashes, then a lot of big accounts will need to cover their losses. Meaning they will exchange USDT to BTC (also a big IF), and then will immediately sell those BTC, and primary points of sale would be USA exchanges specifically because they don't list USDT and are reputable. Tether flash crash will bring down all crypto prices a lot.
- nullc 5y agoI don't think there are. IIRC, until recent demand triggered by use of tether in ethereum "defi" I believe the only US exchange which even had access to tether at all was Kraken and it didn't see much trade. Basically the main reason for tether existing outside of acting as USD in bitfinex is for people to trade altcoins at sketchy offshore altcoin exchanges that have no access to actual USD by virtue of being sketchy and/or offshore. I believe there is essentially no reason for US residents to use these exchanges except for access to more obscure altcoins (as they require much smaller bribes to list things than larger exchanges). It's extremely hard to estimate the aggregate impact because the very same exchanges that use tether as their primary/only form of "USD" are the ones which have volumes which are dubious (zero fee trading) to outright obviously fake (e.g. showing volume when the exchange is off the internet). It's also hard to estimate the impact because its possible that as tether comes untethered people will trade out of it (e.g. into Bitcoin) thus driving _up_ the price of the things they're trading into. (see the bitwise report to the SEC on fake exchange volume: https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca201901-5164833-183434.pdf https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca2... (they also wrote a paper on the subject, but a quick google isn't turning it up).
- chinathrow 5y agoMeanwhile BTC is racing towards a new all time high, I simply can't wrap my head around this. What on earth is going on? Does anyone have a clue? I'm genuinely interested.
- anonporridge 5y agoTether doesn't change the fact that my percentage ownership of all btc will never be diluted like my dollars constantly are.
- trident5000 5y agoNobody gives a f-ck about tether except those who keep yelling at the sky. The govt said it will be regulated like a bank and they received a fine.
- overtonwhy 5y agoThe unlicensed offshore exchanges that use Tether to avoid USA banking regulation and AML/KYC don't let you cash out real money. You have to buy crypto and hope that they let you transfer it out before their real asset reserves run out. Now that people have the data that Tether has <5% in cash reserves it's a race to get converted into BTC etc and get it out before the insolvency stops everything.
- olalonde 5y agoThe fact that USDT is currently trading at $0.9995 seems to contradict that theory.
- TheAlchemist 5y agoIt's all about incentives. Everybody knows Tether is a scam - and it will probably take down crypto once it implodes. But the people 'with knowledge of the matter' have 0 incentive to expose it, and they have every incentive to keep it as it is. People are making hundreds of millions of dollars on it. Until the music stops, they will keep dancing. Anyway, it's fascinating ! As Patrick McKenzie put it ""we are living in the middle chapters of a Michael Lewis book."
- zarzavat 5y agoWhy do people think that Tether will take down crypto if it implodes? The market survived the implosion of Mt Gox, which was much more severe. By this point everybody knows that Tether has junk status. Much ink has been spilled about the matter. It's hardly a secret. A few years ago when Tether was the only stablecoin, then yes it's implosion would have been catastrophic. But now anybody using Tether clearly has some (good or bad) reason to do so. There's simply not enough people living under rocks to be surprised when the thing collapses.
- cinquemb 5y agoAgreed, and I was doing cross exchange arb with mt gox in 2012 and knew never to keep anything on there overnight when I wouldn't run the bot. I think this quote from somewhere describes this best: "It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so." If you ask me, i think the big thing™ most people trust and don't question that's pretty much backed into tradfi mm funds and centralized crypto stablecoin reserves alike is US treasuries. Most assume that they are super safe and that nothing can go wrong, however most ignore or are in ignorance of the rehypothication of them in eurodollar markets (and the rehypothication of collateral more generally). The heavy usage of them as collateral in the post 2008 monetary system has basically tied the super-safe-risk-free-asset™ asset to the credit risk of the most junkiest actors globally (that for the most part, whose balance sheets go unseen and will never see the light of day).
- TigeriusKirk 5y agoI sort of agree. I think people know they're taking a risk with Tether, but they think they'll get out in time. Maybe they're right. Maybe it will be slowly and then all at once and if you get out in the slowly phase you'll be fine. People did that with Gox. Everyone certainly knows the risk exists by now. And the markets keep on chugging.
- ohbleek 5y agoThere’s just over $68 billion Tether. The 24hr trade volume for BTC alone is just over $50 billion. If all tether were to completely turn to dust, it would not lead anywhere close to a “gigantic defi crash”. This is in no way a defense of Tether. I’m just zooming out from the hyperfocus on Tether as the pseudo foundation of crypto. That is just simply not the case.
- agnokapathetic 5y agoIf all retail investors were not allowed to buy or sell stocks anymore what would that do to the stock market? Its only 10% of transaction volume, but critical to so many liquidity dependent financial instruments, it would be catastrophic for the market.
- deleted 5y ago[deleted]