5 ms·

the US Dollar is a currency. USDT is a security backed by things that aren't US Dollars.

JumpCrisscross 4y ago
> US Dollar is a currency. USDT is a security backed by things that aren't US Dollars Meh, plenty of currencies—from the Emirati dirham to the Hong Kong dollar—are pegged [1]. International investors would just shit bricks if any of them dared the lack of transparency Tether pulls on crypto users. [1] https://www.investopedia.com/articles/forex/061015/top-exchange-rates-pegged-us-dollar.asp https://www.investopedia.com/articles/forex/061015/top-excha...
- selectodude 4y ago
  They’re not pegged to assets though and as such can’t lose value. Currencies can only go down vis-a-vis each other. When you buy an HKD you’re not buying a slice of a USD, you’re buying an HKD.
  - JumpCrisscross 4y ago
    > When you buy an HKD you’re not buying a slice of a USD, you’re buying an HKD You're also buying a commitment from the Hong Kong Monetary Authority (HKMA) to convert between Hong Kong and U.S. dollars at fixed exchange rates [1]. That promise is backed by the HKMA's reserves [2]. Tether closely resembles a pegged currency, albeit a banana republic's. [1] https://www.hkma.gov.hk/eng/key-functions/money/linked-exchange-rate-system/how-does-the-lers-work/ https://www.hkma.gov.hk/eng/key-functions/money/linked-excha... [2] https://www.hkma.gov.hk/eng/news-and-media/press-releases/2022/09/20220907-4/ https://www.hkma.gov.hk/eng/news-and-media/press-releases/20...
    - selectodude 4y ago
      Hong Kong's central bank prints their own currency. They defend the value of it by engaging in open market operations. If they fail, you can still pay your taxes in Hong Kong with it. Tether does not print their own currency. If USDT goes to zero, you have nothing. It's good nowhere.
      - JumpCrisscross 4y ago
        > Tether does not print their own currency. If USDT goes to zero, you have nothing. It's good nowhere. Tether prints Tethers. The HKMA prints Hong Kong dollars. They both derive their value from the U.S. dollar. If the HKD goes to zero, one has as much as if Tether goes to zero. (This is tautology.) The Hong Kong dollar is backed by the Hong Kong government. Tether is backed by no government. Tether is probably lying about its reserves. Hong Kong could just as well convert everyone's HKD to renminbi overnight. Point is, there isn't something fundamentally currency-like about one versus the other other than state backing.
        danaris 4y ago
        Isn't that effectively like saying "there's no fundamental difference between my three friends who like to talk about how democracy works and the Hong Kong government"? The fundamental difference between Tether and HKD (or any other currency) is that Tether is not a legally recognized currency. That may mean nothing to you, or to various other people who think that laws mean less than code, but it means a hell of a lot to most of the world.
        potatolicious 4y ago
        This really is the root of all of this, and why we will really never be able to get through the lineup of sealions that will say "please explain to me..." every time you try. The reasons something is a currency is because it is backed up by the power of the state. This includes (but is not limited to) the recognition of its status as legal tender within a the realm of a state, the ability to pay taxes in it, and also the very real guns and batons wielded by said state to enforce said authority. There is no such thing as a currency that is not backed by some state, or at least some entity enjoying the broad authorities of a state. Tether (along with literally every single crypto product out there) does not. But because primarily crypto was invented to snooker people who find the entire concept of state authority to be objectionable, this fact will never quite land.
        mjhay 4y ago
        > Point is, there isn't something fundamentally currency-like about one versus the other other than state backing. I'd say that's as fundamental as you can get. One is backed up by guns, the other is backed up by literally nothing.
YawningAngel 4y ago
That's just a restatement of the premise. It doesn't explain why dollars are a currency and tethers aren't
- selectodude 4y ago
  You can pay your taxes in dollars. You can't do anything important with tethers.

> US Dollar is a currency. USDT is a security backed by things that aren't US Dollars Meh, plenty of currencies—from the Emirati dirham to the Hong Kong dollar—are pegged [1]. International investors would just shit bricks if any of them dared the lack of transparency Tether pulls on crypto users. [1] https://www.investopedia.com/articles/forex/061015/top-exchange-rates-pegged-us-dollar.asp https://www.investopedia.com/articles/forex/061015/top-excha...

selectodude 4y ago
They’re not pegged to assets though and as such can’t lose value. Currencies can only go down vis-a-vis each other. When you buy an HKD you’re not buying a slice of a USD, you’re buying an HKD.
- JumpCrisscross 4y ago
  > When you buy an HKD you’re not buying a slice of a USD, you’re buying an HKD You're also buying a commitment from the Hong Kong Monetary Authority (HKMA) to convert between Hong Kong and U.S. dollars at fixed exchange rates [1]. That promise is backed by the HKMA's reserves [2]. Tether closely resembles a pegged currency, albeit a banana republic's. [1] https://www.hkma.gov.hk/eng/key-functions/money/linked-exchange-rate-system/how-does-the-lers-work/ https://www.hkma.gov.hk/eng/key-functions/money/linked-excha... [2] https://www.hkma.gov.hk/eng/news-and-media/press-releases/2022/09/20220907-4/ https://www.hkma.gov.hk/eng/news-and-media/press-releases/20...
  - selectodude 4y ago
    Hong Kong's central bank prints their own currency. They defend the value of it by engaging in open market operations. If they fail, you can still pay your taxes in Hong Kong with it. Tether does not print their own currency. If USDT goes to zero, you have nothing. It's good nowhere.
    - JumpCrisscross 4y ago
      > Tether does not print their own currency. If USDT goes to zero, you have nothing. It's good nowhere. Tether prints Tethers. The HKMA prints Hong Kong dollars. They both derive their value from the U.S. dollar. If the HKD goes to zero, one has as much as if Tether goes to zero. (This is tautology.) The Hong Kong dollar is backed by the Hong Kong government. Tether is backed by no government. Tether is probably lying about its reserves. Hong Kong could just as well convert everyone's HKD to renminbi overnight. Point is, there isn't something fundamentally currency-like about one versus the other other than state backing.
      - danaris 4y ago
        Isn't that effectively like saying "there's no fundamental difference between my three friends who like to talk about how democracy works and the Hong Kong government"? The fundamental difference between Tether and HKD (or any other currency) is that Tether is not a legally recognized currency. That may mean nothing to you, or to various other people who think that laws mean less than code, but it means a hell of a lot to most of the world.
        potatolicious 4y ago
        This really is the root of all of this, and why we will really never be able to get through the lineup of sealions that will say "please explain to me..." every time you try. The reasons something is a currency is because it is backed up by the power of the state. This includes (but is not limited to) the recognition of its status as legal tender within a the realm of a state, the ability to pay taxes in it, and also the very real guns and batons wielded by said state to enforce said authority. There is no such thing as a currency that is not backed by some state, or at least some entity enjoying the broad authorities of a state. Tether (along with literally every single crypto product out there) does not. But because primarily crypto was invented to snooker people who find the entire concept of state authority to be objectionable, this fact will never quite land.
      - mjhay 4y ago
        > Point is, there isn't something fundamentally currency-like about one versus the other other than state backing. I'd say that's as fundamental as you can get. One is backed up by guns, the other is backed up by literally nothing.

YawningAngel 4y ago

That's just a restatement of the premise. It doesn't explain why dollars are a currency and tethers aren't

selectodude 4y ago
You can pay your taxes in dollars. You can't do anything important with tethers.