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hodlefer

Why Tether won't matter in the long run

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I didn't realize United States citizens were not allowed to buy or redeem tether. This is a very interesting story! Must dig a little more...

 

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Here's a suggestion:

Someone who is good at community organizing should start a petition for exchanges to delist Tether.  If a free market is supposed to be self-regulating, then let's self-regulate the free market.  Systemic organized shutdown will be far better than any scandal-fueled crash.  Gradual de-listing will still impact the market, but it will be our best chance for getting everyone out of this as cleanly as possible.

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44 minutes ago, automatic said:

Any USDT profits realized by virtue of trading require that additional USDT be printed.   1-to-1 pegging could not be maintained without adequate Tether supply, meaning that as market grows so does the volume of USDTs in circulation.  For Tether to be effective, it does therefore need to be printable out of thin air.  However, as soon as the Tether becomes printable, the 1-to-1 physical backing that may have existed now goes out of the window.  For example, a deposit of $1000 may have produced an initial credit 1000 USDT, but now that 1000USDT was invested in Ether that subsequently went up 50%, and closing that position produced a total of 15000USDT.   There is still only $1000 USD in the piggy bank, but there are now 15000 USDT in existence.  In order for pegging to work, the circulation therefore must be variable and the currency unbacked.

Yes, that is what I think is going on.  Listening to people who buy tether, it sounds like they are using it to park gains.  The correlation might actually be between drops in crypto prices and minting new tether -- because they have to create tether to cover the gains made.  The problem is that the solution Bitfinex came up with to deal with their loss of banking partners (and to deal with the hack) just doesn't work, as you point out.

Tether was originally created to facilitate movement of money across exchanges, but it is being used to cement gains; and this has un-tethered it from USD backing.  If it weren't so clearly a problem I would probably do the same as others (well, if I day traded, but I don't).  Lately when Bitcoin falls generally everything else does too, so it doesn't help to sell Bitcoin for another crypto.  You'll just end up losing gains in another denomination.  But tether is always $1, so selling Bitcoin for tether helps to weather all storms.  Except that it can't for much longer, being a house of cards.

Edited by Tyrell

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22 minutes ago, zerpdigger said:

this might be the best thing to ever happen to crypto -- hold on to your butts, there'll be a HUGE crash before the recovery

Yessssss. I've been wanting more cheap zerps for a while now. Woo!

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5 minutes ago, woytow said:

Yessssss. I've been wanting more cheap zerps for a while now. Woo!

assuming tether and the 'ex' exchange cartel etc DO all all go down... but asi said in the chatbox, best case scenario, they're shut down anyway for highly misleading if not outright illegal activity even *IF* it's not counterfeiting (which would see lifetime imprisonment and a global manhunt)

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We people are greedy fuсks man, aren't we.. I mean, Bitfinex are literally the biggest BTC exchange and are making millions of dollars in fees and whatnot and they still want to scam and earn more money by introducing the Tether scam. It's honestly disgusting. Leave it to people's greed to turn a new technology, new asset class, new market place into a wild wild west, what an absolute joke. 

This should in theory be positive for XRP in the long run, but you can just imagine how big companies and institutions are trying to take them seriously when the whole market is full of scammers and teenagers. 

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1 hour ago, automatic said:

Here's a suggestion:

Someone who is good at community organizing should start a petition for exchanges to delist Tether.  If a free market is supposed to be self-regulating, then let's self-regulate the free market.  Systemic organized shutdown will be far better than any scandal-fueled crash.  Gradual de-listing will still impact the market, but it will be our best chance for getting everyone out of this as cleanly as possible.

I Agree

Edited by Rchopra

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