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all the other assets that can absorb billions of dollars in liquidity are throughly manipulated

Bitcoin is thoroughly manipulated. Tether is minting a billion dollars a day now, with zero oversight and close ties to the major exchanges. Exchanges themselves have been found front running customers, running wash trades on their own coins etc etc. Fraud is rampant in this space and there is zero oversight from the normal regulatory bodies.

A trillion dollars goes into bitcoin, the price just goes up and there's no dilution.

But there is significant manipulation and absolutely no clarity about whether a trillion dollars has in fact gone into cryptocurrencies or whether things like the trillions of dollars that tether has minted affect the price more than real money flowing in. The numbers you can quote from exchanges are unaudited and highly suspect. At least those other assets have some sort of auditing in place to prevent fraud and market manipulation (which still happens, but would of course be rampant and largely hidden without regulation).

Also, Bitcoin is open source. So you can download the Bitcoin code and fork it and call it THE SUPER NEW IMPROVED BITCOIN

Ah, so the supply of this new money is in fact unlimited, since you can add new coins at any time. The supply of bitcoin may be limited (for now, by fiat), but the supply of cryptocurrencies and now nfts is constantly growing, there is no scarcity, and any we have is invented.

If you think Bitcoin is a symbol of resistance you're a mark making the likes of the Winklevoss twins and JL Van der Velde even richer. Get out now if you can.

Everything can be manipulated, but bitcoin compared to any other asset we know, is the only thing that cant be changed. You can create a new bitcoin but you cant create the same bitcoin and thats makes all the difference in the world.

1. The rules can (and have) been changed by whoever has commit permissions on the repo, they are not immutable.

2. The rules can also be changed with a simple fork if enough users are persuaded to move (Bitcoin Cash) - and somehow the price of both is preserved (how? why? who benefits?).

3. The price is provided by unaudited exchanges and can be manipulated by manipulating linked assets and collusion with exchanges, as Tether has shown.

This is a house of cards waiting to collapse.

1) The rules about the 21Million which is the only thing that matters here can't be changed.

2) Again there is a reason why Bitcoin Cash is a fraction of BTCs value it's not the same.

3) Everything can be manipulated. You go and see how Soros did that in the 90es. But again that's not the measurement here. It can't be changed.

It's been a house waiting to collapse for 12 years now. Maybe you should ask yourself what it would take for you to admit to yourself that you were wrong. How long does this have to be a thing?

The rules about the 21Million which is the only thing that matters here can't be changed.

What would stop it being changed?

It's been a house waiting to collapse for 12 years now.

Tether has only been trading since 2015 and only prominent the last few years. Other cryptocurrencies have seen multiple bubbles and collapses. The thing that would convince me personally is that all the get-rich-quick marks and scammers leave the space and people start using it for actually useful things like payments.

Unfortunately distributed consensus with a global public ledger is particularly badly suited to payments or a currency, though it seems well structured for a ponzi scheme.

Why don't you tell me first what would make it possible since you seem to be privy to information no one else is. How are you going to change that?

It could be changed in bitcoin core, as previous changes to rules have been. It would require agreement from market participants.

Changes to some rules, not the fundamentals like the 21M though which is what is important.

I'm not clear on why you think this is 'impossible'. It's clearly possible to change the rules of a system defined by software, it just requires a majority of those maintaining the chain to go along with it.

The most bizarre economic occurrence of the last decade is Bitcoin forking and the copy and the original both maintaining value.

The crypto exchanges can sell more bitcoin than they have. Nobody is auditing them, and unless they collapse then there is not going to be an audit of what they hold. And with bitcoin being so impractical, there are is always going to be vast amounts of centralisation.

> trillions of dollars that tether has minted

Tether has "only" minted $78 billion, not trillions

Sorry, tens of billions of dollars, not trillions, my mistake. They are currently adding 1 billion a day at times, where does that money come from?

Does anyone really believe 78,423,306,967 USD are currently invested in Tether?

I don't know anything about anything, but I see Wikipedia says Tether is 65% "backed by commercial paper". Which as far as I can tell basically means IOUs, but IOUs that are considered somewhat legit. It definitely seems questionable, but I'm not really sure how to assess how bad it is or isn't.

1) https://en.wikipedia.org/wiki/Tether_(cryptocurrency)

Edit: I see elsewhere somebody saying "nobody in the commercial paper markets have heard of them"

Banks don't have to back the dollar by anything anymore.

With Tether - it's best to follow "fraud until proven otherwise" principle

That "commercial paper" could very well be IOUs from themselves to themselves

Their commercial paper would make them one of the largest players in the global market if their numbers were true, but nobody knows what they have invested in, they say it is in crypto as well (eek!), they've been found guilty of fraud multiple times, including faking assets by using temporary bank transfers, and the amounts we're talking about make it very hard to believe they could function at that scale without making lots of noise in the global commercial paper market.

So basically, like most other things they say, it's simply not credible.

https://www.ft.com/content/342966af-98dc-4b48-b997-38c008042...

USDC? and BUSD have been growing faster and are US regulated.

But publicly traded companies don't dilute their shareholders away. Those shares either have to be sold (meaning the company takes in proportional amounts of cash, driving the value up) or issued as compensation (which you can't just unilaterally in a publicly-traded company).

Your gold example is also very contrived because the futures market doesn't literally dilute away physical gold.

As for Bitcoin: You're missing the fact that while Bitcoin can't be manipulated away from 21 million, the Bitcoin markets can definitely be heavily manipulated by sufficiently large players and insiders. And there does seem to be ample evidence that this is happening.

Many gold mines across the planet reopen and shutter solely based on price.

If gold doubles, supply dramatically ramps up. Same with most commodities.

BTC futures moves the price of BTC. So you don't even need any BTC to manipulate the price of BTC.

No, you need real money backing a credit line and collateral. Same as in any other futures business. This isn’t a new correlation, it is society driving the value of society’s creations.

Right, and futures markets have been proven to be the preferred vehicle for price manipulation.

> But publicly traded companies don't dilute their shareholders away.

Sure; however governments do dilute their share... err citizens away ;)

> As for Bitcoin: You're missing the fact that while Bitcoin can't be manipulated away from 21 million, the Bitcoin markets can definitely be heavily manipulated by sufficiently large players and insiders. And there does seem to be ample evidence that this is happening.

So what will the argument be when this market is regulated? Gary Gensler is obviously a fan of Bitcoin. He considers other digital assets in a different light, and seems to consider many of them to be securities. What happens when crypto exchanges are regulated and the level of manipulation is much harder, similar to traditional financial markets? The 21 million cap on Bitcoin is going to look more attractive then, I think, at least to those who aren't considering that now. Plenty of folks already consider the 21 million cap on Bitcoin very attractive, and I think this will only increase over time.

Also the other comments that I see arguing how Bitcoin could be changed tells me that those people have not followed the history of Bitcoin very closely. It seems one of Bitcoin's main goals over the past 10 years is ossification and hardening of the system, i.e. being very strict and careful about changes. This seems built into the ethos of the system. The Bitcoin Cash fork is an example of this. Bitcoin Core refused to change the block size and that led to a fork which has not done well in terms of price in comparison to Bitcoin. One could say that so far the Bitcoin Cash fork has failed in comparison.

> The thing I think driving Bitcoin is that all the other assets that can absorb billions of dollars in liquidity are throughly manipulated.

Bitcoin can be just as much manipulated, if not more, because there's barely any regulatory oversight. Remember the two bots that traded Bitcoins with each other on Mt Gox to drive the price up (https://www.theguardian.com/technology/2014/may/29/bitcoin-b...)? What makes you think something like this doesn't exist anymore? Especially with the Tether guys at the helm, who have been proven to lie in the past (https://ag.ny.gov/press-release/2021/attorney-general-james-...), Bitcoin and other cryptocurrency investors should be worried.

> Bitcoin can be just as much manipulated

indeed. decentralization of mechanical infrastructure =/= decentralization of human control over said infrastructure.

if anything, the former serves mainly to obfuscate the latter, rather than eliminate it.

Actually the opposite thing happens in the stock market. The shareholders vote on the board of directors and the board of directors pay the CEO mostly based on the stock price going up. One way they do that is buying back shares. Another way is buy making money via positive cashflow and giving dividends to the share holders.

Bitcoin has negative cashflow, the only way it goes up is by more people putting money into it. I'm not saying that is a bad thing. Picasso paintings also have negative cashflow when you account for storage and security of the art. The only way a Picasso goes up in value is if more people with more money want to buy one. It is unfair to call Bitcoin a Ponzi scheme because no one calls a Picasso a Ponzi scheme.

Picasso paintings have possible positive cash flows via tax loopholes. So they don’t call it a Ponzi scheme because they do call it (legal) tax evasion. For example: https://www.linkedin.com/pulse/why-do-rich-buy-art-divyanshu...

Tax evasion and avoidance are two different things.

this argument is frequently made to defend the shifting profits away from the edge (the supply side, and the retail side) and extract value from the middle (the tax haven¹).

Both are immoral but only one is illegal. One can do a double-Irish-Dutch sandwich and rat fuck both employees and suppliers all in the name of creating value for the shareholders. While employees piss into bottles the forward thinking CEO engages in union busting methods to prevent them from organizing. Legal or not, why not, if you can get away by stalling until a court decides and you settle (or purge the board from the toxic elements and restart what you do with a new CEO).

¹ Treasure Islands: Tax Havens and the Men who Stole the World: https://en.wikipedia.org/wiki/Treasure_Islands

funny enough, high value art is used for money laundering all the time

Not sure about Picassos. Picasso was a world famous artist that even those who are not into fine art know and appreciate. There is kind of a consensus on the value of his work, and even those who find it ugly won't treat it as trash.

The way I understand it, the kind art that is most often used in money laundry schemes is the more controversial kind. When some people think that a painting is a waste of perfectly good canvas while some rick collectors think it is the expression of god himself, how can you assign a value? This extreme subjectivity is what makes it ideal for money laundering.

I would love to know how the IRS handles this. You report 2M of income from selling your art. Does the IRS ask for details? Or do they try and find out how the person who bought your art got the money? Or they just don't care as long as you pay the income tax on it?

Other assets classes can absorb billions of dollars because that's not a lot of money to them while it's a ton for Bitcoin.

Bitcoin can be shorted.

Bitcoin prints money ( eg tether)

Bitcoin just doesn't work. It's centralized now to fix it's issues.

Best of all, none is regulated and the whales hold the power. Even more in the future with proof of stake.

There is more dilution and misunderstanding with crypto in general then I've ever seen.

What is Tethers relationship to Bitcoin? I thought they had their own coin.

Tether's relationship to Bitcoin is that 80%+ of the trade volume in BTC markets is Tether.

A lot of crypto trade (especially on shadier exchanges without KYC or the option to use fiat) is denominated in tether.

Tether keeps printing billions of dollars with no oversight or regulation. They lied about it being backed by cash reserves, and now make a much softer claim that its backed by "some cash" and other assets (other assets include more crypto IIRC).

Basically, it feels like tether is inflating the price of BTC, and the exchanges all have a vested interested in continuing to pretend tether is worth something. If there was a run on tether (i.e. everyone tries to exchange for fiat) it could be catastrophic for all of crypto.

(Disclaimer: I am not a financial expert, and have just picked this up from reading about tether over the last few months).

One Tether is the supposed to be = to one USD which is supposed to be in Tether's bank account somewhere. They have like 16 people total and are based in a mailbox in the Caribbean and nobody in the commercial paper markets have heard of them, despite them being one of the largest buyers in the world (in theory). Their "audits" aren't really audits and there's a ton of sketchiness with the firm they chose last time they ran one.

In practice they basically use their trusted position within an exchange (as the 1-to-1 representation of a US dollar) and simply create new Tethers from thin air, move them to an exchange, buy BTC, pump the price, and essentially act as a stabilizer whenever the price starts tanking. For instance they've printed over $2 Billion worth of Tether since Saturday, with absolutely no evidence that real people actually put $2B into exchanges to buy crypto.

It's an amazing scam since anytime it looks like the floor is about to fall out, they print billions more and keep their position alive by pumping crypto back up.

Anyways the reason it's important is because Tether and other stablecoins are supposed to be the fiat offramp in the event that you want to withdraw money from an exchange. After all, to buy BTC you really first bought Tether (or USDC) and then traded your tether for BTC a minute later. So all of the hard cash in the exchange is supposed to be represented by Tether... guess what happens when people realize their cash isn't actually there 1-to-1 like it was promised? Massive liquidity crises and all cryptocurrency falls 90%+.

Be careful my friend.

> nobody in the commercial paper markets have heard of them

You've spoken to Evergrande and friends?

> to buy BTC you really first bought Tether (or USDC) and then traded your tether for BTC a minute later

Nnnnno, not everyone uses sketchy and/or first-gen CEXs...

I don't think I need to explain how risky it is to buy subprime commercial paper denominated in non-US currency to back up your USD reserves. It's not like Evergrande is teetering on the verge of a massive default or anything...

"...but you have heard of me."

Anyway, I agree with you, and hope Tether goes away soon.

USDC and Tether are _not_ the same thing. They're collateralized and distributed differently; the only similarity they have is being stablecoins. That's like saying potatoes and carrots are the same thing because they're vegetables.

There are more similarities:

- Both are not really audited

- Both have retracted claims of being fully USD backed ( only tether had to do it after court and USDC changed it a bit later)

Almost correct.

But they are the exchange, even if they claimed for long they were not.

Most bitcoins are bought with tethers and tethers are issued by Tether inc. Thether inc. claims that tethers are backed by real US dollars, however nobody knows whether this is true and Tether inc. has been shown to have lied about that in the past. In short, the widespread suspicion is that exchanges and other parties are using unbacked tethers to pump the price of bitcoin up.

Tether inc. claims that tethers are backed by real US dollars

They don't claim that any more. They only claim a tiny percentage is held in cash now, the rest is in 'commercial paper' apparently.

Bitcoin is completely unrelated to tether. Bitcoin is highly decentralised. Bitcoin is not moving to PoS.

I'm not sure what your actual gripe is, but you certainly have no idea what you're talking about.

Bitcoin is absolutely related to tether. Tether mints a billion coins and then exchanges them for bitcoin, voila, bitcoin price goes up.

USDT: $77B USDC, 41 + BUSD 14, + TUSD 1.2 + PAX 1 = $57B and growing faster and follow US regulations.

Come again? I don't think you know what you're talking about...

Simple example:

https://en.m.wikipedia.org/wiki/Tether_(cryptocurrency)

> Research by John M. Griffin and Amin Shams in 2018 suggests that trading associated with increases in the amount of tether and associated trading at the Bitfinex exchange account for about half of the price increase in bitcoin in late 2017.

> A trillion dollars goes into bitcoin, the price just goes up and there's no dilution.

Isn't someone just going to create a Bitcoin-denominated derivative or fractional reserve bank, assuming that hasn't already happened?

Not just a derivative, bitcoin itself can be inflated via partially-backed bitcoin deposits at exchanges. In other words, the moment exchanges decide to lower their reserve ratio from 1 to less than 1, the supply of bitcoins in circulation will increase as a result. And, as you point out, we don't know that this hasn't already happened.

However at least with bitcoin you can easily self-custody, and be sure you're holding a real bitcoin and not a fractional one in an exchange

Shove some cash under a mattress or store it in a vault and you can be sure you are holding real dollars not fractional ones. Just holding a real dollar says nothing about the value of the dollar you are holding. Same as just holding a real bitcoin says nothing about the value of the bitcoin you are holding. Outside forces affect the actual value of what you hold fractional or not. The ability to self-custody affords you nothing. The value in either case can plummet completely outside of your control.

This is an aside. DAOs/Web3 doesn't run on bitcoin.