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I'm still waiting for the "obvious scam that Tether is which is printing fake dollars as everybody knows" to implode. Any moment now. BTW, wasn't the narrative

I'm still waiting for the "obvious scam that Tether is which is printing fake dollars as everybody knows" to implode. Any moment now. BTW, wasn't the narrative that crypto goes up because it's bought with printed Tethers? Why aren't they printing some now to start another bull market?

earnesti 3y ago
How many years have you been waiting? Tether was launched in 2014...
theGnuMe 3y ago
Matt Levine has an article on Tether and how tether is the perfect business except for them loaning crypto to customers. https://www.bloomberg.com/opinion/articles/2023-09-21/tether-keeps-lending-tethers https://www.bloomberg.com/opinion/articles/2023-09-21/tether...
- skizm 3y ago
  It is great as long as they are actually sticking to short dated US t-bills. They've just been super sketchy about if they are or are not in the past. Personally I think they're fine. The absolute worst case there's a run and depositors only get back like 75 cents on the dollar. Which is way better than most places that people park crypto.
  - schemescape 3y ago
    My amateur theory is that Tether could have imploded for most of its existence, but now there’s a real chance that they have been (or will be) able to bluff their way to solvency. But I’m probably wrong…
  - loeg 3y ago
    The worst case is zero cents on the dollar.
- loeg 3y ago
  > the perfect business except for them loaning crypto to customers Well, and assuming they have any significant fraction of the assets they claim to have.
misja111 3y ago
You might just as well wait for the 'obvious scam of the FED printing fake money' to implode. The thing with fiat money is, fake or not, as long as enough people believe in it, it functions well.
- vagab0nd 3y ago
  You are being downvoted but I think there's some truth. I'd like to see counter arguments. One that I can think of is the difference in intent. Tether is for profit and the FED is to stabilize the economy.
  - JumpCrisscross 3y ago
    > I think there's some truth. I'd like to see counter arguments. The history of money and banking. Starting with John Law [1], and why private, leveraged money requires a public backstop. [1] https://en.m.wikipedia.org/wiki/John_Law_(economist) https://en.m.wikipedia.org/wiki/John_Law_(economist)
- kkielhofner 3y ago
  Replacing an imperfect implementation with one that has demonstrated time and time again it's far worse should never be the solution. Crypto has languished in obscurity (other than gambling, scams, and criminality) for 15 years because anyone who isn't in the cult (or hyping their "bags") can see how obviously ridiculous it is. It's been clearly and obviously explained to death for crypto people where the value of fiat comes from and it's not a "debate" I'm interested in rehashing.
- TheCoelacanth 3y ago
  Fiat money is backed by guys with guns. Tether is not.
  - kkielhofner 3y ago
    Guys backed with guns funded by fiat (tax revenue). It's unbelievable to me that crypto people don't see/understand/refuse to acknowledge the huge difference. "It is difficult to get a man to understand something when his salary depends on his not understanding it." Or (in this case) their gambling.
suckitsam 3y ago
IIRC, the NYAG/JPM report from a few years back almost explicitly said "this is totally criminal and entirely fraudulent, but it's too late to stop, because if we do, the entire global financial system will explode"
- checkyoursudo 3y ago
  Sorry to be a finance idiot, but why would the entire global financial system explode?
  - yieldcrv 3y ago
    the term is contagion. and in this case it is probably hyperbolic, but basically when people rely on one asset as a medium of exchange, and that asset turns out to be of poor quality or worthless, then it affects many other assets and businesses. if balance sheets and collateral for loans for big businesses were all in tether it stopped being redeemable or traded at $0, the businesses would have nothing on their balance sheet and all their lenders would realize the collateral was also missing, and the lenders also would realize they wouldn't get paid and had lent on bad assurances. The lenders would also lose money on all those loans, and their capital partners would lose money (private equity firms and their limited partners) and everyone that relied on payouts from the PE firms would have to change their forecasting, and the PE firm would not be investing in the economy anymore, making a hole in that market. Depending on how many PE firms were doing this it could grind a significant part of the economy to a halt. good news is that typically the government fills in the gap. but people don't like that.
- Analemma_ 3y ago
  I think you're remembering incorrectly. Crypto is large, but nowhere near large enough to cause contagion risk, especially because nobody is stupid enough to lever against it as though it was a AAA asset (like they did for American mortgages). If every single cryptocurrency was zeroed tomorrow, the global economy would shrug and move on.
  - uhhhhhhh 3y ago
LiquidSky 3y ago
"LOL, FTX fail? Sam Bankman-Fried is a genius, you think you know better than him?"
- weevil 3y ago
  This is the most infuriating attitude, and the reason you can't reason cryptobros out of their delusion.
  - causi 3y ago
    You see far too much of this attitude on HN with regards to a number of idiotic business plans.
    - rsynnott 3y ago
      Yeah, HN is _big_ into the “rich people are magic” thing. Maybe a bit blunted at the moment, with FTX, and, er, Twitter, but it goes _deep_.
      - weevil 3y ago
        I've noticed this too, including the increasingly indefensible position that billionaires are somehow inate geniuses and will solve all our problems.
lawn 3y ago
Are you implying that Tether isn't shady? Because it's obviously a huge scam. Now the question isn't if, it's when. And as Madoff showed us, it can take a very long time, decades even, before it fails. And predicting the future is very hard, so nobody knows how much longer it'll take. But down it will go because it's inevitable. And to your second paragraph, that's an oversimplification. Yes, printing Tether helped dampen the fall and prop up the price, but it did not do so alone and it's not as easy as just printing more to start the bull market. Trying to do that would smore likely just hurry up their impending doom.
- deleted 3y ago
  [deleted]
dang 3y ago
"Eschew flamebait. Avoid generic tangents." https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

earnesti 3y ago

How many years have you been waiting? Tether was launched in 2014...

theGnuMe 3y ago

Matt Levine has an article on Tether and how tether is the perfect business except for them loaning crypto to customers. https://www.bloomberg.com/opinion/articles/2023-09-21/tether-keeps-lending-tethers https://www.bloomberg.com/opinion/articles/2023-09-21/tether...

skizm 3y ago
It is great as long as they are actually sticking to short dated US t-bills. They've just been super sketchy about if they are or are not in the past. Personally I think they're fine. The absolute worst case there's a run and depositors only get back like 75 cents on the dollar. Which is way better than most places that people park crypto.
- schemescape 3y ago
  My amateur theory is that Tether could have imploded for most of its existence, but now there’s a real chance that they have been (or will be) able to bluff their way to solvency. But I’m probably wrong…
- loeg 3y ago
  The worst case is zero cents on the dollar.
loeg 3y ago
> the perfect business except for them loaning crypto to customers Well, and assuming they have any significant fraction of the assets they claim to have.

misja111 3y ago

You might just as well wait for the 'obvious scam of the FED printing fake money' to implode. The thing with fiat money is, fake or not, as long as enough people believe in it, it functions well.

vagab0nd 3y ago
You are being downvoted but I think there's some truth. I'd like to see counter arguments. One that I can think of is the difference in intent. Tether is for profit and the FED is to stabilize the economy.
- JumpCrisscross 3y ago
  > I think there's some truth. I'd like to see counter arguments. The history of money and banking. Starting with John Law [1], and why private, leveraged money requires a public backstop. [1] https://en.m.wikipedia.org/wiki/John_Law_(economist) https://en.m.wikipedia.org/wiki/John_Law_(economist)
kkielhofner 3y ago
Replacing an imperfect implementation with one that has demonstrated time and time again it's far worse should never be the solution. Crypto has languished in obscurity (other than gambling, scams, and criminality) for 15 years because anyone who isn't in the cult (or hyping their "bags") can see how obviously ridiculous it is. It's been clearly and obviously explained to death for crypto people where the value of fiat comes from and it's not a "debate" I'm interested in rehashing.
TheCoelacanth 3y ago
Fiat money is backed by guys with guns. Tether is not.
- kkielhofner 3y ago
  Guys backed with guns funded by fiat (tax revenue). It's unbelievable to me that crypto people don't see/understand/refuse to acknowledge the huge difference. "It is difficult to get a man to understand something when his salary depends on his not understanding it." Or (in this case) their gambling.

suckitsam 3y ago

IIRC, the NYAG/JPM report from a few years back almost explicitly said "this is totally criminal and entirely fraudulent, but it's too late to stop, because if we do, the entire global financial system will explode"

checkyoursudo 3y ago
Sorry to be a finance idiot, but why would the entire global financial system explode?
- yieldcrv 3y ago
  the term is contagion. and in this case it is probably hyperbolic, but basically when people rely on one asset as a medium of exchange, and that asset turns out to be of poor quality or worthless, then it affects many other assets and businesses. if balance sheets and collateral for loans for big businesses were all in tether it stopped being redeemable or traded at $0, the businesses would have nothing on their balance sheet and all their lenders would realize the collateral was also missing, and the lenders also would realize they wouldn't get paid and had lent on bad assurances. The lenders would also lose money on all those loans, and their capital partners would lose money (private equity firms and their limited partners) and everyone that relied on payouts from the PE firms would have to change their forecasting, and the PE firm would not be investing in the economy anymore, making a hole in that market. Depending on how many PE firms were doing this it could grind a significant part of the economy to a halt. good news is that typically the government fills in the gap. but people don't like that.
Analemma_ 3y ago
I think you're remembering incorrectly. Crypto is large, but nowhere near large enough to cause contagion risk, especially because nobody is stupid enough to lever against it as though it was a AAA asset (like they did for American mortgages). If every single cryptocurrency was zeroed tomorrow, the global economy would shrug and move on.
- uhhhhhhh 3y ago

LiquidSky 3y ago

"LOL, FTX fail? Sam Bankman-Fried is a genius, you think you know better than him?"

weevil 3y ago
This is the most infuriating attitude, and the reason you can't reason cryptobros out of their delusion.
- causi 3y ago
  You see far too much of this attitude on HN with regards to a number of idiotic business plans.
  - rsynnott 3y ago
    Yeah, HN is _big_ into the “rich people are magic” thing. Maybe a bit blunted at the moment, with FTX, and, er, Twitter, but it goes _deep_.
    - weevil 3y ago
      I've noticed this too, including the increasingly indefensible position that billionaires are somehow inate geniuses and will solve all our problems.

lawn 3y ago

Are you implying that Tether isn't shady? Because it's obviously a huge scam. Now the question isn't if, it's when. And as Madoff showed us, it can take a very long time, decades even, before it fails. And predicting the future is very hard, so nobody knows how much longer it'll take. But down it will go because it's inevitable. And to your second paragraph, that's an oversimplification. Yes, printing Tether helped dampen the fall and prop up the price, but it did not do so alone and it's not as easy as just printing more to start the bull market. Trying to do that would smore likely just hurry up their impending doom.

deleted 3y ago
[deleted]

dang 3y ago

"Eschew flamebait. Avoid generic tangents." https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html