Hacker News Reader

Comment by iLoveOncall | Hacker News Reader

> There's a chance that Tether has been pumping BTC.

A chance? It's an absolute certainty.

Not only most exchanges have only a USDT:BTC pair and not a USD:BTC pair, but if you look at recent (~1.5 years) sudden spikes in BTC price, they correspond almost always to a new supply of USDT being released by Tether.

The only upward momentum Bitcoin has had since the last ATH has been due to Tether printing money, so it's safe to say that not only it's pumping it, but it's probably contributing 80%+ of its value.

If Tether dies, it's the end of cryptocurrency, period.

View on HN

I agree that Tether has certainly been pumping BTC with money they don't have, but

> if you look at recent (~1.5 years) sudden spikes in BTC price, they correspond almost always to a new supply of USDT being released by Tether.

is what you would expect to see even if Tether was 100% legit. As you say, most BTC liquidity is in USDT, so people buying Bitcoin would first buy (mint) USDT from Tether, and then use that to buy BTC.

Seems kinda obvious. New Tether is issued because people typically want to onboard into crypto assets.

> If Tether dies, it's the end of cryptocurrency, period.

That's what I thought about MtGox. How wrong I was.

> That's what I thought about MtGox. How wrong I was.

It's mind boggling how long this has gone on, really. I've been following the crypto scam for like 10 years now and it just keeps going.

It's almost like it's not all a scam isn't it?

Or maybe it's just the most brilliant scam to ever be conceived? A ponzy scheme with a built-in rinse and repeat function that also put the final nail in the coffin of the war on drugs. Scam or not, it was a revolutionary idea which was executed perfectly.

It's not even that! It's just that most people seem to have no idea how long most scams are able to run. Bernie Madoff was operating for 17 years before things fell apart, and he was just one man. The layers of scam involved in crypto will take many, many, many more years to unravel.

It doesn't take cleverness, just complexity.

Just wait until you read about John Law's antics in the early 1700s in creating fractional reserve banking & central banks... No way that ponzi scheme could hold up!

The technology may not be but certainly it's hard to argue that a large number of participants in the space are not committing scams.

And Scientology is not a cult. Something being around for decades is no indication of whether it's legitimate or not.

Oh it’s definitely a scam. It is just an amazingly long running one.

MtGox involved few thousands people. There's more than 100M people at least who speculated on crypto.

It’s end of cryptocurrency as a wild speculative asset. Ethereum and decentralised apps will still exist, which is all that matters.

Bitcoin is a failed open source project turned Ponzi. I can’t wait for tether to take it to the absolute bottom and end the current epoch of crypto-as-speculation. Crypto will have its uses as a decentralised application platform.

You say that, but the only plausible non-substitutable use of bitcoin I've seen is sending money overseas or buying drugs. If its monetary value collapses, I don't see these other uses at all replacing it. It could just die, though more likely some marginal stuff will continue indefinitely trying to recapture lost glory.

NFTs have actually solved a real problem in the art world. I've said it many times before here so you can browse through my comment history to see why.

Spoilers: - saying "but there is fraud" is not an argument against NFTs, because actually an automated solution for NFT fraud is conceivable. And the fact that there is fraud does not take away from the thousands of artists using it legitimately. Plus, authenticating you are buying from a real artist in the NFT space is actually not that hard.

I actually think there is a huge potential to decentralized applications, but this is essentially faith for now so I won't add much more to the discussion.

I don't actually believe there was anything technical there in the value prop for art over simply having a centralized organization attest to purchases.

My feeling is that the odds of anything useful coming out of this are small. After insane money and over a decade, nothing useful has resulted. Perhaps conditions will be right in another decade for something useful to emerge, but at this point it's all scams imo

> Ethereum and decentralised apps will still exist, which is all that matters.

Will they, when ETH collapses to being worth less than 10 bucks because you can't exchange it for funny drug money and it's only usable as funny slow distributed computer coins ? When users can't speculate on it, when stakers lose money on running a node because they're getting 5 bucks worth of rewards every other month ?

Thankfully for the Ethereum Foundation, they conveniently prevented people from taking out their stake then did the merge, so that now that someone is in Ethereum, they cannot back out of it. Some might say it was something that only a malicious actor would do, but then again, the crypto community has never really been that bright when it comes to detecting scams.

This is essentially FUD, since it's obvious that withdrawals are the next thing in the list for the Foundation. No one forced anyone to stake either. Users did that knowing there was uncertainty on when it would be activated.

is there a decentralized app you like that isn't a defi exchange or play2earn "game" ?

just curious because I haven't seen a practical use for the EVM, it just seems like the slowest, most expensive VM ever conceived.

Yes. NFTs have actually solved a real problem in the art world. I've said it many times before here so you can browse through my comment history to see why.

Spoilers: - saying "but there is fraud" is not an argument agaisnt NFTs, because actually an automated solution for NFT fraud is conceivable. And the fact that there is fraud does not take away from the thousands of artists using it legitimately. Plus, authenticating you are buying from a real artist in the NFT space is actually not that hard.

> NFTs have actually solved a real problem in the art world. I've said it many times before.

Saying something wrong many times doesn't make it right.

You can ignore the empirical evidence. NFTs work.

Work to do what? Prove ownership? They don't. Attribute IP rights? They don't. Persist the art in an immutable state? They don't. Bundle any other perks with the art? They don't. Provide a channel for artists to 'sell' their art? Okay, I guess they do, but so do a million other services, ranging from websites to the coffee shop two blocks down from my apartment.

They are signed URLs that you can trade around on an exchange. This solves no problem that anyone making art has ever had.

> Provide a channel for artists to 'sell' their art? Okay, I guess they do, but so do a million other services…

Yeah NFTs did exactly this and they’re doing a decent job. If you’re a digital artist it was really really hard to get people to buy your art without a gatekeeper/art gallery certifying it. Now it’s easy. So yes they work for specifically that purpose.

If you think coffee shops are a substitute for digital art to be sold in a permissionless global open market I don’t know what to tell you.

I’m really tired of people assuming decentralized = eth derivative. The practical use cases of federated and decentralized apps have been shown (no one source of truth, tampering or failure) but practical apps aren’t going to use a cryptocurrency why the hell would they.

At scale we’ve been building completely decentralized applications for a decade and a half. They’re just internal to some organization not public. Taking this and placing the database in the users hands is an interesting way to go but not exactly an order of magnitude more complex at that point.

But this doesn’t require some dumbass blockchain currency and ethereum is super forced.

| They’re just internal to some organization not public.

That's because technological decentralization is much easier with political centralization.

But technological and political decentralization together is incredibly difficult.

In my experience, federated systems are more practical than decentralized systems and provide 98% of the benefits.

I agree that cryptocurrency is not necessary (or ideal) for either.

In my crypto investing thesis, I simply can't explain what role Bitcoin and its outdated technology can play. But I know not to bet against it. It's still the music to the merry-go-round.

What part of bitcoin tech stack is "outdated"?

Isn't correlation also what you would expect in an honest scenario as well? If there's demand for acquiring tether to trade Bitcoin, and it has to be printed, so it is, and then it's used for Bitcoin trading, I don't understand where the fishy-ness is. At least not from that one timing perspective.

People buy Bitcoin with regular money, not with USDT. People exchange from cryptocurrency to USDT because they really want USD, but that is significantly harder to convert to.

As people are pointing out elsewhere in this thread, the biggest liquidity for BTC is in BTC/USDT markets

So when people want to buy BTC they often do exchange from USDT.

Sure, but that's irrelevant as far as the scam goes. What matters is real money entering the markets for fake money, e.g. USD for cryptos. That people after that can trade back and forth between different fake moneys is irrelevant, although it naturally keeps the illusion alive that these are valuable assets. USDT stands out because it's marketed as almost the same thing as USD, which it of course isn't.

I also do think Tether is dodgy, but even if they weren't, the illusion would be the same – real money enters the market through the usual fiat onramps, then it gets traded for BTC. Since BTC/USDT is one of the most liquid markets, this often can result in new Tether being issued to trade with (potentially in a transparent way to the user) and as long as the other party does not redeem these new USDT they inflate the market cap

The question then becomes whether the fiat going in matches the new Tether being issued, and that can't be answered without a proper audit.

Criminals still need to launder money. Suburbanites still need to buy drugs. Cryptocurrencies won't completely disappear.

> Suburbanites still need to buy drugs

Lol, you think these transactions done with crypto? Don't be silly.

You are saying the Silk Road and the numerous clones aren't real?

They comprise a negligible amount of the drug trade. People are more likely to use Venmo than mess around with crypto wallets

Silk Road was a drop in the ocean, in total a hundredth of a percent of just the United States' spend on the most popular illicit drugs.

Silk Road … facilitating annual sales estimated at almost $15 million.

https://reason.com/2013/04/09/bitcoin-vs-big-government/

Researchers estimate that from 2006 to 2016, the total amount of money spent by Americans on these four drugs fluctuated between $120 billion and $145 billion each year.

https://www.rand.org/news/press/2019/08/20.html

They are real, but it's much, much easier to venmo/cashapp and get same day 2-hours delivery/pickup. Which is how most of the last mile trade is done.

Reply on news.ycombinator.com