Tether

Discussion in 'Cryptocurrencies' started by m22au, Dec 5, 2017.

  1. Daal

    Daal

    If you think about this, in my understanding which could be wrong, this tether thing is like a USD dollar peg (similar to what Hong Kong or Panama uses) that is supported by banking relationships. As a long as there are banks that will make USD wires to big holders of tether (when they decide to cash out) the system "works" in the sense that the peg holds.

    The minute those banking relationships go bad in a big way(and Wells Fargo did dump the company behind Tether as a client) people know that tethers arent worth jackshit (its just an eletronic entry, a bunch of worthless numbers) and they become a hot potato. Its very hard for this to scale up because they got to find more and more banks or do bigger and bigger wires in the banks they already have. The second the US government says they are going after tether, banks will treat this thing like a cancer and this peg will break.
    People will dump the hot potato like there is no tomorrow
     
    #11     Dec 5, 2017
    Vertex and m22au like this.
  2. I think the Tether issue is coming up as manufactured FUD to drive down BTC before the futures roll out next week.

    Hold the line fellow HODL'ers, the FUD will be coming in waves

     
    #12     Dec 5, 2017
  3. m22au

    m22au

    If such a conspiracy story was true, then it would make sense for the story to be released after the futures begin trading, so to provide traders with a shorting opportunity.

    Also questions about Tether and Bitfinex aren't new - articles were written about similar issues on November 21:

    https://www.bloomberg.com/news/arti...the-first-controversy-for-cryptocurrency-firm

    https://www.nytimes.com/2017/11/21/technology/bitcoin-bitfinex-tether.html

    http://www.bbc.com/news/technology-42065724

    .
     
    #13     Dec 5, 2017
  4. Here4money

    Here4money

    Nope, it makes sense to do it now on an unregulated market.
     
    #14     Dec 5, 2017
  5. Pekelo

    Pekelo

    1. That is not really an argument.
    2. How would that makes sense? Why would anyone wants cheaper BTC just because of the existence of futures?
     
    #15     Dec 5, 2017
  6. Pekelo

    Pekelo

    One interesting point is from the SA Santos article is this:

    Assuming miners sells the same % of newly mined coins as before, when price has increased 10 fold this year, it is costing 10 times as much new, incoming money to keep up the current price. If price doubles from here that also means the supporting new money also has to double.

    Now one could argue that miners sell immediately less and less because mining cost increases slower than price. That might be true, I am not sure. I don't know the economic of mining or how much of a holder is the average miner.

    Now with the new futures miners don't need to sell right away, they can lock in current price by selling futures instead. Maybe that actually ease the selling pressure on BTC.
     
    #16     Dec 5, 2017
  7. isn't it because bitfinex's usd accounts were closed and they needed an alternative?
     
    #17     Dec 5, 2017
  8. m22au

    m22au

    I'm also interested in the economics of mining. Obviously the reward for mining a coin at $11,500 is much higher than what it was when Bitcoin was at $1,500 or $150 or $1.50.

    I have a hunch that higher prices leads to more mining competition, which leads to higher electricity consumption. (I need to get confirmation of this).
    So it seems that the true winner from higher Bitcoin prices is the utility companies which sell more electricity.

    .
     
    #18     Dec 5, 2017
  9. Here4money

    Here4money

    If the manipulator's sentiment is such that they feel futures will bring the price of btc up, it behooves them to bring it down b4 launch. I'm not saying it will.... I'm feeling 60/40 towards barishness myself.
     
    #19     Dec 5, 2017
  10. Here4money

    Here4money

    More or less true... Computational power drives the difficulty up, and a high price brings such power to compete. Unless there's a technological leap in mining tech. (Which seems to happen every 6 months), then yes, more energy is needed all things being equal.
     
    #20     Dec 5, 2017