Comment by arcticbull | Hacker News Reader

Comment by arcticbull | Hacker News Reader

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> You are not helping your case. It's been a while already where they stopped claiming to have USD to back the USDT and are claiming to have "diverse investments".

Why on earth would you believe them now? You probably believed them the first time too :) Do you have the audit? Either way the Tether T&C's don't actually give anyone holding Tether right to withdraw anything from Tether. Ever. Not assets, not dollars, nothing. There's nothing stopping them from running with all of those assets, they may or may not have, legally.

Ask their CEO or CFO! If you can find them that is, they've been missing for about a year now, nobody's heard from them.

> Just in last two weeks the price of BTC basically doubled. ETH as well. Printing _now_ kind of correlates with the price hike. Yes, if we assume that they are completely naked, then all of this printing is fraudulent (whether at 14 or 24B). However, if they do have reserves, this printing does make sense in the overall market.

It actually always did. [1]

> Anyway, still curious how the 9 trillion printed by the Fed and the 10 million going to "Pakistani NGOs" does not bring you the same outrage as a bunch of people putting their own time, money and effort in crypto projects. Has any bitcoiner hurt you?

Money printing is irrelevant. Totally and utterly irrelevant so long as inflation remains on track for 2%. The whole reason for printing was to offset a reduction in velocity of money. You're pointing at a system working, that you don't understand, and screaming fraud. You're basically a financial anti-vaxxer. Everything you need to learn about finance, about economics, is available to you at your local college. The course is called "ECON-101."

Put all the time and effort and money into crypto you want, I know plenty of beanie baby collectors who do the same!

> Has any bitcoiner hurt you?

Of course not, I made a ton of money on crypto on the run up and sold in January 2018 lol.

If you saw someone's house on fire, would you say to yourself, huh, that's weird, and walk away? Or would you maybe tell people that they're about to get seriously hurt.

[1] https://twitter.com/JacobOracle/status/1346133083645476869/p...

> Why on earth would you believe them?

I don't! I'm just saying that this crazy printing is consistent with the current market.

I also tell loud and clear to stay away from them and to any exchange that wants you to be holding this shit. This doesn't mean that I swear off anyone working in crypto as a fraud like Tether.

> Money printing is irrelevant (...) You're pointing at a system working

Working for whom? For the ones that already have access to cheap capital? For companies in Wall Street that have enough money in their balance sheets to buy Uruguay or half the Mediterranean? For banks that should've been liquidated decades ago?

Inflation rate is under the target? Oh great, so now all the small business owners will go bankrupt and not be able to afford the things they need at almost the same price they were before, and the rest of the unemployed people can just take their $600 checks to buy a PS5 to kill the time they will be spending at home. Yay, economics!

> 10M to Pakistani NGOs rounds to zero.

How about the 700M to Sudan? In any case, it's not the amount. It's the absurd "crypto is used by criminals and funds terrorists" claim while being completely blind for an obvious mechanism that is taking tax-payer money and putting in very questionable hands.

> I don't! I'm just saying that this crazy printing is consistent with the current market.

And every other bull market since Tether was formed, yeah.

> I also tell loud and clear to stay away from them and to any exchange that wants you to be holding this shit. This doesn't mean that I swear off anyone working in crypto as a fraud like Tether.

Tether is 80% of trading volume lol. The water is so murky you could build a hut out of it. There is no market without Tether. Not one that looks anything like you imagine it does. [1]

> Inflation rate is under the target? Oh great, so now all the small business owners will go bankrupt and not be able to afford the things they need at almost the same price they were before, and the rest of the unemployed people can just take their $600 checks to buy a PS5 to kill the time they will be spending at home. Yay, economics!

Ah now I see the issue.

You've conflated fiscal, monetary, foreign and social policy into one abomination. This is your mistake. The Fed only manages the money supply. This is monetary policy. The Fed does this by increasing and decreasing the supply of money and managing interest rates and aims at a target 2% rate of inflation. It has done this incredibly successfully.

Then there's fiscal policy - and by extension social policy. This is government spending on social programs and also on foreign aid. Businesses going bankrupt are being allowed to do so by bad fiscal policy and not bad monetary policy and no amount of crypto will change that. Only you voting will change that.

That's not economics, that's fiscal and social policy. For instance, Canada is centrally banked, and doesn't have the issues you're pointing out because their fiscal policy was to provide everyone $2000 per month during COVID and is now paying small business rents. This is nothing to do with Bitcoin.

And your NGOs and the Sudan. This is both a distraction, whataboutism, and also not monetary policy. This is foreign policy. This is nothing to do with Bitcoin. This would still happen with Bitcoin, of course, but bitcoin also opens up a new avenue on top of making the situation strictly worse.

Please, learn about economics. Take an ECON-101 course. Stop trying to reinvent what you don't understand. I'm sure this is tough to hear because for many folks in the crypto space a whole lot of their identity gets wrapped up in crypto.

> Not every crypto project is a fraud.

No, but most of them are. And the ones that aren't don't solve anything better than a classical solution because trust is a huge optimization.

By all means, continue working on crypto. It's not illegal, its just, you know, not smart. But poor decisions tend not to be criminal!

[1] https://coinlib.io/coin/BTC/Bitcoin

(@konamicode, reference added here due to rate limit - I was referring to the "Money flow from/to Bitcoin in the last 24 hours" chart showing 12B of flow into Bitcoin was via Tether, out of a total of 15B).

> Tether is 80% of trading volume lol.

This statement might need a reference to back it up.

Provided, thank you for the call out!

It's funny how you try to separate monetary/fiscal/economic policy in relation to the current scenario when it comes to the status quo, but you do not apply the same logic when it comes to crypto. For you, what the Fed does is completely separate from the interests of the financial elites, but what one disgraceful actor in the crypto system is enough to make everyone stupid?

> Only you voting will change that.

First, I don't vote in the US. Second, are you seriously this naive or did you mean this as a joke?

> And the ones that aren't don't solve anything better than a classical solution because trust is a huge optimization.

Ah! And here I see the issue you are having.

No serious person working in crypto ignores the fact that trust helps. The point is that trust should be granular, not a binary property. Every project working on layer-2 networks is basically dealing with the issue of trust vs performance.

Also, another issue is that too much of an optimization makes a system fragile to systemic shocks. It doesn't matter if it is the US, Canada, the EU or a Banana Republic: the response from every government in every crisis has always been to concentrate more power and to ask more of people. Ever bigger houses of cards are built and when they inevitably get blown over, the solution is to get more "optimizations" and to have more bureaucrats with no skin in the game responsible in defining "policies" for people they have nothing in common with, know nothing of their actual problems and have zero incentive to actually care - in fact, if they cared they might end up losing their election or dead by going against the interests of the bigger fish.

When you say that "10M going to Pakistan would also happen in Bitcoin" is missing the point. Money laundering/fraud/tax evasion/mismanagement of public funds will always exist, no matter what. The problem is that a Big central Government is not only be terrible at fighting it, the bigger it gets the more they create it themselves.

You keep telling me to "take a econ course", as you think that my issue is not understanding the logic defended by economists. Far from it. Simply put, I want Homo Economicus logic to go extinct. Too many basic failed moral and ethical principles are built on "logic" backed by economists. Too many "optimizations" proposed by economists made our societies worse. Too much power was taken away from the people and put in the hands of "experts" - which seem a good thing "on average" but in reality made us more unequal, more polarized and less connected.

When people get inevitably screwed over by Tether, there will be a bubble burst and lots of fools (not for lack of warning) will lose their money. Crypto will go on. It's their money they lost, the system as a whole survives and actually becomes stronger. Can you say the same about Government? Do people trust the government more or less after each crisis?

I said in our last exchange as well: I am not the only one that works on crypto without caring about price. Making money is just a nice side-effect. The main motivation (to me at least[0]) is to build the tools that can let people be in charge of their actions including who/when to trust and delegate things . [1]

   [0]: https://hub20.io/architecture/#economies-of-scale-vs-robustness-of-decentralization
   [1]: https://trustlines.network

So you’re building a non custodial wallet? What on earth does that have to do with a single thing you’ve been talking about? Isn’t that illegal in America now?

The reason I suggest an Econ course is you have an awful lot of misconceptions and deep seated misunderstandings of the current system. Much more than I can rectify here pro bono.

For what it’s worth I generally don’t think figuring out who to trust granularly is a real problem. Trust them? Do business with them. Don’t trust them? Maybe don’t. Or involve an intermediary who does like visa that allows clawbacks. We’ve been doing trustful business for tens of thousands of years. I see you’re fairly early along in your speed run of finance.

And you are yet to start your run of Localism. ;)

"Custodial/Non-custodial" is not the point of Hub20. It's not supposed to be used by a company that wants to operate an exchange or to compete with Coinbase. It's supposed to be used by me and my family, or a small co-op of artisans that want to sell things online. Trust is not enforced by the technology, it is built and supported by the group that is using it.

A rule of thumb for Hub20 should be do not join an instance if you can not knock on the door of its operator.

> Trust them? Do business with them. Don’t trust them? Maybe don’t.

Try this:

- I trust Joe with the cash register from our shop, but I wouldn't trust him to manage my life savings. For the former, we can use our Hub20 server and enjoy quick, low-cost transactions. For the latter, I will keep a very secure and private wallet.

- Rachel trusts me to manage the funds collected by the members of her church, but she doesn't trust me to manage the funds of a multi-million investment club which she happens to have some shares on. She can trust the blockchain contract that lets me and her pool our resources and invest in real estate development, though.

- I trust Bandcamp to pay me my fair share of whatever I sell through their platform. I don't trust them to be my bank. But Bob, my Starving Artist friend is kind of crazy and he is okay with using Bandcamp as his "checking account". If Bandcamp wants to use Hub20 as a payout option (and if they implement a KYC system that satisfies Uncle Sam), they can operate their own instance of Hub20.

The idea with Hub20 is to get a different kind of decentralization. I can be a part of many different hubs, just like most people have different circles of relationships and different types of relationships and different levels of trust among them. The payment network as whole gets more robust, more people can get access to crypto. It's still "permissionless" (if you don't trust anyone, you can just run your own node just for yourself) but it also enables non-technical people to use it. It brings the benefits of economies of scale without forcing people to trust and depend on some faceless company.

Trust is not binary. It depends on context and the nature of the relationship. Should I be involving Visa on everything, costing me and everyone else 3%+ of our capital and rob us the opportunity to exercise this mutual trust? Also, wouldn't the act of involving a third-party signal that this mutual trust does not exist?

One of the many things you’ll learn in Econ 101 is visas cost structure.

Visanet makes 0.1-0.2%. The cardholder makes 1-2% depending on the card and the rewards structure. The remainder goes to the issuing bank and covers the cost of loan origination. It is after all an unsecured loan at a rate of 0% for the first month.

Even this is a social policy issue as Europe has capped debit interchange at 0.2% and credit at 0.3%. Guess what they don’t have? Reward programs.

Ok so what does this fee get you as a merchant? 20% higher average ticket sizes.

Then there’s bitcoins $10 fee or $100 if you factor in the socialized cost of block reward.

So no, it’s not a 3%+, it’s much more nuanced than you’re making it out to be, and it is by no means a clear win.

Every other hypothetical actor you provided has their use case solved by permission limited accounts with your merchant acquirer.

[edit] if you knew you were making a disingenuous statement to make your position sound compelling when it just isn’t. That’s lying. A better system doesn’t have to lie.

> visas cost structure.

I know. I don't care. This is Homo Economicus talking. 3% or 0.03%, it's another entity that gets into the relationship and changes the social dynamics of the relationship.

Shut up, Economicus!

> Then there’s bitcoins $10 fee or $100 if you factor in the socialized cost of block reward. (A better system doesn’t have to lie.)

Oh, did you see the part about Raiden, which uses layer-2 to bring near-zero-fee, instant transfers? Not to mention that if you are making transfers inside the hub, then the cost is actually zero?

P.S.: in case you want to argue Visa lets users get their money back. My response will involve Kleros [0] and how that can (will?) become a cheaper and more efficient system to settle disputes.

P.P.S: Do understand that you are trying to make an argument using quantitative issues when the whole reason you have so many people working on crypto is due to "qualitative" characteristics in the status quo that we want to change. You are arguing over the sound quality of the PSTN network while others are figuring out solutions to the problems that will lead them to building the Internet. Yeah, we know making a digital phone call over 9600 baud is kind of stupid when you are already have an AT&T line. The point is that we want to get rid of AT&T altogether.

The examples I gave "could've been solved by some Visa offering"? They could, but we want to get rid of Visa - or at least to have an alternative to it. Much like we want to have an alternative to governments that grow ever-larger and ever-less-successful in working for its people. Are the first implementations going to be objectively better than the status quo? No, of course not. Can they be objectively better? I don't see why not, so why not work on it?

[0]: https://kleros.io/

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