8 ms·

The day that tether, and all of the other "stablecoins" die, is going to be absolutely brutal. Makes me glad to not be a crypto speculator. This is the type of

by alexb_ 5y ago

The day that tether, and all of the other "stablecoins" die, is going to be absolutely brutal. Makes me glad to not be a crypto speculator. This is the type of stuff that they write books, movies, and papers about.

dragosmocrii 5y ago
I've noticed so many ads on Crypto "investing" recently, that makes me think we might be in the last stage of this bubble. I've had a discussion with a family member and their friend, and they were talking to me about investing in crypto, and how XRP is backed by gold, and how they have cold storage with their phone to hold their "assets" in case the Internet is taked down, and how the stock market will crash and big companies will disappear (like Google, Amazon, etc). And I'm like what the heck.. If the Internet is taken down, why do you even need to have your crypto on cold storage, it's just bits.. you've got bigger problems at that time. But nope, they're adamant crypto is the future, even if they have bo idea how it works. Fascinating, and terrifying when thigs go South.
- alexb_ 5y ago
  When taxi drivers give out investment advice...
- rhn_mk1 5y ago
  It's worth noting that if the internet splits up into large pieces, the blockchain splits, and the coins will suddenly lose a lot of their value. That's because there's no telling which fork of the blockchain wins when there's a merge later. Double-spending galore!
  - jazzyjackson 5y ago
    > there's no telling which fork of the blockchain wins That's the point of proof of work: longest chain wins. Yes in a netsplit you can spend on both chains, but you would need access to both chains to do so. And you don't even ever have to merge them again, there could just be AmericanBTC and RussianBTC from here on out.
    - rhn_mk1 5y ago
      The problem with keeping them separate is that there's no singular "you" who decides; there's no telling what will happen, causing an inherent uncertainty.
- jqpabc123 5y ago
  About a year ago, I saw a handyman with a big sign on his truck about investing in crypto --- with his help of course. This I took as a sign that the end is near.
recuter 5y ago
What if, listen, guys hear me out, what if things just stay in this limbo forever? If banks are too big to fail, why not crypto? I say HODL ;)
- alexb_ 5y ago
  The term "too big to fail" means "gonna get bailed out by the govt". This does not apply to any decentralized system.
  - zinekeller 5y ago
    Definitely this is the major difference. Most governments will just say to everyone (especially the government of El Salvador) "we warned you!" and probably do nothing, unless that ther are powerful people that can convince otherwise.
  - i_am_proteus 5y ago
    I'm inclined to agree, but if enough individual members of major governments are "bought in" to crypto currencies such that their own personal wealth would be at risk, things might be different. Not the case today, but things shift over time.
    - aaaaaaaaata 5y ago
      I believe many are invested, and the fix is in.
    - andruby 5y ago
      That would be the ultimate irony. Cryptocurrencies getting bailed out by governments.
      - aaaaaaaaata 5y ago
        Them not crushing Tether right now is exactly what you are describing.
- 5y ago
jqpabc123 5y ago
The exchanges are deeply implicated in the Tether fiasco. They will most likely just collude and attempt a simultaneous "rug pull" on the entire crypto market once the SEC announces plans to audit "stablecoins". Trillions in "crypto wealth" will just evaporate into the electronic ether from whence it came
- gitfan86 5y ago
  Except it is fake money, they can print as much of it as they want and the exchanges can let them buy other crypto with that fake money. It is possible that on some exchanges Tether will never crash, it will just become impossible to redeem Tether for USD. People stuck holding tether and people stuck holding tether propped up crypto will have no way to redeem for real money.
  - donmcronald 5y ago
    Now hear me out... What if we offset the money printing with money printing?
    - aaaaaaaaata 5y ago
      Jay Powell?
- lamontcg 5y ago
  The SEC won't do anything with teeth until crypto and Tether are already collapsing. No government auditor took out Madoff, nobody wanted to touch it, because he was so popular and his clients were influential, and anyone investigating him would be sticking their neck out. That's the kind of risk that if you don't get it perfectly right destroys career and even if you're right you may get blamed and destroyed anyway for pressing the button. Much easier politically to mop up after it all collapses. Same thing here since if the SEC pops Tether then now you'll trigger automatic lawsuits from Tesla investors, and there's too many billionaires that are still true believers who have enormous influence over the government and will cause them to be overly cautious.
- 5y ago
everfree 5y ago
Why would stablecoins other than Tether die?
- jqpabc123 5y ago
  More then half of all crypto trades involve Tether --- it pervades the entire crypto market. Anything that is not truthfully fully backed by assets outside of crypto land will almost certainly be affected.
- acdha 5y ago
  Depends on what they're tied to and how leveraged they are: anything backed on some other cryptocurrency will likely have a massive crunch if Bitcoin staggers, and if the largest “stable coin” turns out to be as fraudulent as it looks everyone is going to get hit by both a wave of people cashing out into USD/EUR/etc. and a ton of demands to prove that their collateral is as solid as claimed, which the first trend will make a lot harder.
romeros 5y ago
there is a lot of mistrust regarding Tether. People kind of prefer to switch over to BUSD, USDC, GUSD which are backed 1:1 with real USD. Tether is just a temp variable for trading. But, if Tether goes down it will be bad news but not enough to destroy the whole market. USDC is gaining ground pretty rapidly.
- alexb_ 5y ago
  What proof is there exactly that USDC is different?
  - benreesman 5y ago
    Random audits by E&Y.
    - hiq 5y ago
      According to your link below (https://www.centre.io/usdc-transparency https://www.centre.io/usdc-transparency) these are not audits, but attestations. Tether has plenty of these as well.
      - benreesman 5y ago
        I’m not an accountant but Google seems to think those things are substantially similar: https://www.quora.com/What-is-the-difference-between-an-audit-and-an-attestation https://www.quora.com/What-is-the-difference-between-an-audi... Not being an accountant I rely a lot on inside baseball, but I know some whales and I’ve never heard Tether described as credibly backed.
        hiq 5y ago
        Not an accountant either, but from past threads they seem to be quite different: https://hn.algolia.com/?dateRange=all&page=0&prefix=false&query=attestation%20audit%20tether&sort=byPopularity&type=comment https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu... See in particular this comment from a user who claims to be a former auditor: https://news.ycombinator.com/item?id=27532670 https://news.ycombinator.com/item?id=27532670
maipen 5y ago
>The day that tether, and all of the other "stablecoins" die. Typical hn comment, miss crypto opportunities and so decides to fantasize about everyone losing money so you feel better with yourself. FIY, there are many stablecoins out there that use different ways to keep the peg and others that are simply more trusted and secure. A good way to find out what is actualy going on, is to look a Uniswap info (which is the most honest data out there) and you will see that people have elected USDC and DAI as their stablecoins of choice. A reminder, cryptocurrencies are usualy based on consensus, everyone knows tether is parcialy backed after some of their funds were siezed by the gov. DAI has held its peg even when ethereum tanked, usdc has been transparent. Both have nothing to do with tether. No cryptocurrency will not die, not all stablecoins will die (some probably will) and no santa is not real either.
- qnsi 5y ago
  Tether is a known scam though, so your speculations that someone is angry because he missed "bigger fool" scam early is unfounded.
  - deleted 5y ago
    [deleted]
cletus 5y ago
Stablecoins are going to be another hard lesson for many, many people and yet another example of crypto failing to learn the lessons that built the financial system Crypto Andys seem to despise. This has been tried. We've tried pegging currencies. We had the Bretton-Woods system. We've had currencies that were partially or fully backed by hard assets (most notably gold). For the record, since this seems to come up so often, the US dollar was never 100% backed by gold. Not once. Ever. Fiat currencies exist for a reason. Central banks and managing money supplies exist for a reason. Ultimately a stablecoin is a form of price control between two assets. And just like any other price control, its ability to maintain that peg only go so far as how much money someone has to fight against the market forces driving those prices apart.
epgui 5y ago
From what (little) I understand of money markets, if Tether were to "die" (or even just "get sick" haha) at the scale it's at today, it would probably have a profound impact on even my portfolio, which doesn't even have any direct crypto or crypto-adjacent exposure. I'm not sure what assets would be safe from repercussions.

by alexb_ 5y ago

dragosmocrii 5y ago

I've noticed so many ads on Crypto "investing" recently, that makes me think we might be in the last stage of this bubble. I've had a discussion with a family member and their friend, and they were talking to me about investing in crypto, and how XRP is backed by gold, and how they have cold storage with their phone to hold their "assets" in case the Internet is taked down, and how the stock market will crash and big companies will disappear (like Google, Amazon, etc). And I'm like what the heck.. If the Internet is taken down, why do you even need to have your crypto on cold storage, it's just bits.. you've got bigger problems at that time. But nope, they're adamant crypto is the future, even if they have bo idea how it works. Fascinating, and terrifying when thigs go South.

alexb_ 5y ago
When taxi drivers give out investment advice...
rhn_mk1 5y ago
It's worth noting that if the internet splits up into large pieces, the blockchain splits, and the coins will suddenly lose a lot of their value. That's because there's no telling which fork of the blockchain wins when there's a merge later. Double-spending galore!
- jazzyjackson 5y ago
  > there's no telling which fork of the blockchain wins That's the point of proof of work: longest chain wins. Yes in a netsplit you can spend on both chains, but you would need access to both chains to do so. And you don't even ever have to merge them again, there could just be AmericanBTC and RussianBTC from here on out.
  - rhn_mk1 5y ago
    The problem with keeping them separate is that there's no singular "you" who decides; there's no telling what will happen, causing an inherent uncertainty.
jqpabc123 5y ago
About a year ago, I saw a handyman with a big sign on his truck about investing in crypto --- with his help of course. This I took as a sign that the end is near.

recuter 5y ago

What if, listen, guys hear me out, what if things just stay in this limbo forever? If banks are too big to fail, why not crypto? I say HODL ;)

alexb_ 5y ago
The term "too big to fail" means "gonna get bailed out by the govt". This does not apply to any decentralized system.
- zinekeller 5y ago
  Definitely this is the major difference. Most governments will just say to everyone (especially the government of El Salvador) "we warned you!" and probably do nothing, unless that ther are powerful people that can convince otherwise.
- i_am_proteus 5y ago
  I'm inclined to agree, but if enough individual members of major governments are "bought in" to crypto currencies such that their own personal wealth would be at risk, things might be different. Not the case today, but things shift over time.
  - aaaaaaaaata 5y ago
    I believe many are invested, and the fix is in.
  - andruby 5y ago
    That would be the ultimate irony. Cryptocurrencies getting bailed out by governments.
    - aaaaaaaaata 5y ago
      Them not crushing Tether right now is exactly what you are describing.
5y ago

jqpabc123 5y ago

The exchanges are deeply implicated in the Tether fiasco. They will most likely just collude and attempt a simultaneous "rug pull" on the entire crypto market once the SEC announces plans to audit "stablecoins". Trillions in "crypto wealth" will just evaporate into the electronic ether from whence it came

gitfan86 5y ago
Except it is fake money, they can print as much of it as they want and the exchanges can let them buy other crypto with that fake money. It is possible that on some exchanges Tether will never crash, it will just become impossible to redeem Tether for USD. People stuck holding tether and people stuck holding tether propped up crypto will have no way to redeem for real money.
- donmcronald 5y ago
  Now hear me out... What if we offset the money printing with money printing?
  - aaaaaaaaata 5y ago
    Jay Powell?
lamontcg 5y ago
The SEC won't do anything with teeth until crypto and Tether are already collapsing. No government auditor took out Madoff, nobody wanted to touch it, because he was so popular and his clients were influential, and anyone investigating him would be sticking their neck out. That's the kind of risk that if you don't get it perfectly right destroys career and even if you're right you may get blamed and destroyed anyway for pressing the button. Much easier politically to mop up after it all collapses. Same thing here since if the SEC pops Tether then now you'll trigger automatic lawsuits from Tesla investors, and there's too many billionaires that are still true believers who have enormous influence over the government and will cause them to be overly cautious.
5y ago

everfree 5y ago

Why would stablecoins other than Tether die?

jqpabc123 5y ago
More then half of all crypto trades involve Tether --- it pervades the entire crypto market. Anything that is not truthfully fully backed by assets outside of crypto land will almost certainly be affected.
acdha 5y ago
Depends on what they're tied to and how leveraged they are: anything backed on some other cryptocurrency will likely have a massive crunch if Bitcoin staggers, and if the largest “stable coin” turns out to be as fraudulent as it looks everyone is going to get hit by both a wave of people cashing out into USD/EUR/etc. and a ton of demands to prove that their collateral is as solid as claimed, which the first trend will make a lot harder.

romeros 5y ago

there is a lot of mistrust regarding Tether. People kind of prefer to switch over to BUSD, USDC, GUSD which are backed 1:1 with real USD. Tether is just a temp variable for trading. But, if Tether goes down it will be bad news but not enough to destroy the whole market. USDC is gaining ground pretty rapidly.

alexb_ 5y ago
What proof is there exactly that USDC is different?
- benreesman 5y ago
  Random audits by E&Y.
  - hiq 5y ago
    According to your link below (https://www.centre.io/usdc-transparency https://www.centre.io/usdc-transparency) these are not audits, but attestations. Tether has plenty of these as well.
    - benreesman 5y ago
      I’m not an accountant but Google seems to think those things are substantially similar: https://www.quora.com/What-is-the-difference-between-an-audit-and-an-attestation https://www.quora.com/What-is-the-difference-between-an-audi... Not being an accountant I rely a lot on inside baseball, but I know some whales and I’ve never heard Tether described as credibly backed.
      - hiq 5y ago
        Not an accountant either, but from past threads they seem to be quite different: https://hn.algolia.com/?dateRange=all&page=0&prefix=false&query=attestation%20audit%20tether&sort=byPopularity&type=comment https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu... See in particular this comment from a user who claims to be a former auditor: https://news.ycombinator.com/item?id=27532670 https://news.ycombinator.com/item?id=27532670

maipen 5y ago

>The day that tether, and all of the other "stablecoins" die. Typical hn comment, miss crypto opportunities and so decides to fantasize about everyone losing money so you feel better with yourself. FIY, there are many stablecoins out there that use different ways to keep the peg and others that are simply more trusted and secure. A good way to find out what is actualy going on, is to look a Uniswap info (which is the most honest data out there) and you will see that people have elected USDC and DAI as their stablecoins of choice. A reminder, cryptocurrencies are usualy based on consensus, everyone knows tether is parcialy backed after some of their funds were siezed by the gov. DAI has held its peg even when ethereum tanked, usdc has been transparent. Both have nothing to do with tether. No cryptocurrency will not die, not all stablecoins will die (some probably will) and no santa is not real either.

qnsi 5y ago
Tether is a known scam though, so your speculations that someone is angry because he missed "bigger fool" scam early is unfounded.
- deleted 5y ago
  [deleted]

cletus 5y ago

Stablecoins are going to be another hard lesson for many, many people and yet another example of crypto failing to learn the lessons that built the financial system Crypto Andys seem to despise. This has been tried. We've tried pegging currencies. We had the Bretton-Woods system. We've had currencies that were partially or fully backed by hard assets (most notably gold). For the record, since this seems to come up so often, the US dollar was never 100% backed by gold. Not once. Ever. Fiat currencies exist for a reason. Central banks and managing money supplies exist for a reason. Ultimately a stablecoin is a form of price control between two assets. And just like any other price control, its ability to maintain that peg only go so far as how much money someone has to fight against the market forces driving those prices apart.

epgui 5y ago

From what (little) I understand of money markets, if Tether were to "die" (or even just "get sick" haha) at the scale it's at today, it would probably have a profound impact on even my portfolio, which doesn't even have any direct crypto or crypto-adjacent exposure. I'm not sure what assets would be safe from repercussions.