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[godhandiscen]

The Tether Ponzi Scheme - SingleLunch

www.singlelunch.com

Funds aren’t safu.

 

[FreedomOfSpeech]

Tether, lol.

Its schtick is that it is 'linked' to the dollar, right? Dollars are the worst system of all.

 

[Cravis]

 

[DeepBreath87]

So help me understand this. I know what tether is. So what this is saying is that Tether doesn’t have the funds to actually pay out if enough people attempt to get their money out of tether? And because the value is supposed to be fixed at $1, it can’t just lower in value like etherium or Bitcoin would during a sell off?

But wouldn’t they just be like a savings account? So every dollar that got put in would sit there until someone decided to pull it out?

 

[DeepBreath87]

So help me understand this. I know what tether is. So what this is saying is that Tether doesn’t have the funds to actually pay out if enough people attempt to get their money out of tether? And because the value is supposed to be fixed at $1, it can’t just lower in value like etherium or Bitcoin would during a sell off?

But wouldn’t they just be like a savings account? So every dollar that got put in would sit there until someone decided to pull it out?

I figured it out. Because people don’t put dollars in, they put crypto in. So if the value of crypto falls, but the value of tether is supposed to remain the same, tether would need massive amounts of reserve cash to pay out at $1 a coin when they were promising people their crypto could be stored for equivalent cash.

 

[StreetsofBeige]

LOL.

I dont do crypto, but am familiar enough with Tether as it would always be pegged at $1 and be stable in price, while everything else wildly swings.

So my first assumption would be Tether is the safest crypto out there.

Guess not. lol

 

[DeepBreath87]

LOL.

I dont do crypto, but am familiar enough with Tether as it would always be pegged at $1 and be stable in price, while everything else wildly swings.

So my first assumption would be Tether is the safest crypto out there.

Guess not. lol

I didn’t really think too much about it. But I have now. And it really doesn’t make sense.

So I give them a Bitcoin worth 60k at the time. They promising me 60k. Then Bitcoin goes to 35k. They still owe me 60k because tether has a “stable” value. That happens at large enough volumes and all the sudden tether is out of money.

 

[GHG]

I didn’t really think too much about it. But I have now. And it really doesn’t make sense.

So I give them a Bitcoin worth 60k at the time. They promising me 60k. Then Bitcoin goes to 35k. They still owe me 60k because tether has a “stable” value. That happens at large enough volumes and all the sudden tether is out of money.

Basically the exchange in command of the currency that is pegged is exposed to all the risk.

Once you transfer your Bitcoin in to Tether (or any other crypto that is pegged) the exchange overseeing the transaction inherit your bitcoin. If they don't sell on that bitcoin immediately and they wait in the hope that bitcoin will be worth more in the future but instead bitcoin goes south then they are screwed.

 

[DeepBreath87]

Basically the exchange in command of the currency that is pegged is exposed to all the risk.

Once you transfer your Bitcoin in to Tether (or any other crypto that is pegged) the exchange overseeing the transaction inherit your bitcoin. If they don't sell on that bitcoin immediately and they wait in the hope that bitcoin will be worth more in the future but instead bitcoin goes south then they are screwed.

Which wouldn’t work because then they would eat the fees and lose money.

 

[bigsnack]

It's kind of like 2008 all over again. The exchanges are leveraged a certain way and don't have enough reserves to cover a black swan event under specific circumstances. This will be very interesting to watch.

 

[DeepBreath87]

It's kind of like 2008 all over again. The exchanges are leveraged a certain way and don't have enough reserves to cover a black swan event under specific circumstances. This will be very interesting to watch.

I pulled almost everything out. I could be wrong and miss out, but it seems like storm clouds are gathering. We will see.

 

[bigsnack]

My overall thoughts are that there is going to be a massive rebalancing for a number of reasons. As more and more financial institutions get involved, their games and their approaches are going to start to permeate the crypto markets as well. That alone will change the way the markets behave.

I also see that for long term, PoS will need to take over, which means PoW will be phased out. That clearly means "the flippening" is on the horizon, as the market embraces PoS (staking) over PoW (mining). I have a very positive outlook for blockchain over the next 5-10 years, but it's going to be one heck of a bumpy ride to get there, and I don't think BTC will be at the top of the heap when the dust settles. FWIW I don't think that crypto will ever work as a currency, but I do see many real world use cases for blockchain. The coins that are a value representation of what the teams are doing with blockchain will be the ones that have long lasting value. My .02 of course!

In my experience, first to market very rarely is the one that sees the biggest rewards. Examples such as Facebook (Friendster, Myspace), TIkTok (Vine), etc. I'm rambling a bit, but I think you get the idea.

 

[Pagusas]

so basically it was a business founded on the principle Bitcoin would always continue going up... and when it didn't, they were left with their pants down? How in the hell did they ever get a dime of investment with such a shitty business plan?

 

[FreedomOfSpeech]

PoS will mean that the whales get to decide, right? Kind of like how it is now with fiat, which crypto is trying to sidestep...

 

[bigsnack]

Let’s be honest though, it’s already that way with BTC, right? BTC isn’t selling because the community is selling, it’s the big money moving it around like always. Maybe it’s not regulated the same way, but it moves because whales move it, same as any other financial market, just like GME, etc.

 

[DeepBreath87]

Let’s be honest though, it’s already that way with BTC, right? BTC isn’t selling because the community is selling, it’s the big money moving it around like always. Maybe it’s not regulated the same way, but it moves because whales move it, same as any other financial market.

I think public interest have driven Bitcoin up. And now public fear will drive it down. But the big players stoke both those feelings with what they decide to do. They provide a nudge that can create or shake confidence, and confidence is what determines Bitcoin’s value entirely.

 

[Entroyp]

2008 all over again. We never learn.

 

[godhandiscen]

so basically it was a business founded on the principle Bitcoin would always continue going up... and when it didn't, they were left with their pants down? How in the hell did they ever get a dime of investment with such a shitty business plan?

They are backed by money from China, so there is very little visibility into it. No western bank wants to work with them, not even those that loan money to cartels. They are using a bank from the Bahamas now, and the Bank ”attests” to them having more assets than liabilities, but the makeup of these assets is highly volatile and completely inflated.

PoS will mean that the whales get to decide, right? Kind of like how it is now with fiat, which crypto is trying to sidestep...

Yes, except anybody can become a whale by just buying the Crypto and thus starting a validator. It isn’t bound by the nepotism of the current system.