The day that tether, and all of the other "stablecoins" die, is going to be absolutely brutal. Makes me glad to not be a crypto speculator. This is the type of stuff that they write books, movies, and papers about.
This I took as a sign that the end is near.
That's the point of proof of work: longest chain wins.
Yes in a netsplit you can spend on both chains, but you would need access to both chains to do so. And you don't even ever have to merge them again, there could just be AmericanBTC and RussianBTC from here on out.
They will most likely just collude and attempt a simultaneous "rug pull" on the entire crypto market once the SEC announces plans to audit "stablecoins".
Trillions in "crypto wealth" will just evaporate into the electronic ether from whence it came
No government auditor took out Madoff, nobody wanted to touch it, because he was so popular and his clients were influential, and anyone investigating him would be sticking their neck out. That's the kind of risk that if you don't get it perfectly right destroys career and even if you're right you may get blamed and destroyed anyway for pressing the button.
Much easier politically to mop up after it all collapses.
Same thing here since if the SEC pops Tether then now you'll trigger automatic lawsuits from Tesla investors, and there's too many billionaires that are still true believers who have enormous influence over the government and will cause them to be overly cautious.
This has been tried. We've tried pegging currencies. We had the Bretton-Woods system. We've had currencies that were partially or fully backed by hard assets (most notably gold). For the record, since this seems to come up so often, the US dollar was never 100% backed by gold. Not once. Ever. Fiat currencies exist for a reason. Central banks and managing money supplies exist for a reason.
Ultimately a stablecoin is a form of price control between two assets. And just like any other price control, its ability to maintain that peg only go so far as how much money someone has to fight against the market forces driving those prices apart.
Not the case today, but things shift over time.
Anything that is not truthfully fully backed by assets outside of crypto land will almost certainly be affected.
Tether is just a temp variable for trading.
But, if Tether goes down it will be bad news but not enough to destroy the whole market. USDC is gaining ground pretty rapidly.
The key item here is "attestation report". What does this mean?
It means those issuing the report have no reason to doubt what they are being told/given. They haven't actually verified/audited anything.
Tether paid someone to issue some of these as well.
But everyone who didn’t just fall off a truck knows Tether is capitalized at maybe 30%, and there’s a lot of mediocre commercial paper in the assets it does hold.
USDC and Tether are completely different asset classes.
USDT is casino chips you have to buy to play the low-cap alt-coin slot machine. USDC has a de facto address within reach of the FBI.
What does this mean?
If USDT fails and goes to 0, people will lose their money, and probably no government will be able to go after the creators of USDT (Bitfinex?) and their "collateral".
If USDC fails, the US government can actually make Coinbase responsible. And that's a public company with a 51B USD market cap. As a holder of USDC, you could reasonably expect to see some money back.
Maybe, maybe not. USDC is not legal tender. Coinbase could easily argue it is nothing but monopoly money with a value of $0USD.
But the point is that the USDT people are already some combination of accused/investigated-for/sanctioned-for misrepresenting the amount and quality of the collateral, seem to have very little to lose by doubling down and to many (most?) people look like a worse credit risk than CoinBase.
Not being an accountant I rely a lot on inside baseball, but I know some whales and I’ve never heard Tether described as credibly backed.
See in particular this comment from a user who claims to be a former auditor: https://news.ycombinator.com/item?id=27532670
Thank you for pointing me to it.
Now I’m no CoinBase apologist, they’re accused of stuff that would make Dutsche blush, but USDC is a completely different animal than Tether. I won’t take payment someone’s share of dinner in USDT or ETH for that matter, I will happily hold USDC for short periods of time.
Basically, you're just trusting Coinbase.
I'd rather trust a publicly-traded company in the United States which has serious accountants certifying the validity of their books and plenty of assets subject to seizure in the the same jurisdiction I live in than some guys who at least one state has already decided don't have the money.
I'm working on my HN etiquette but it's been a long week. If I act a like a fucking smartass, call me on it, and I'll return the favor. Don't be a smartass.
Agreed! But I'd propose refraining from just making stuff up off the top of your head that is demonstratedly wrong on every level. Don't be an idiot.
What part of "I'd much prefer to hold USDC than USDT personally because I think not all accountants are Arthur Anderson-level criminals" are you objecting to exactly?
Use your words.
Because of volatility, or something else?
The concrete reason is that I'm not (nor interested in being) a currency speculator, and so I do all my currency speculation in the form of being at least somewhat long the one currency I understand reasonably well, which is `USD`.