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USDT and Bitcoin: Could the USDT scandal crash BTC?

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posted on Jan, 30 2018 @ 06:19 PM
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a reply to: projectvxn

Create fake money to buy fake money!


Well, that's how the rest of the world will see it. This puts a stain on crypto, as most that are in already know.


It is nice to see these scams folding. I hope more are to follow along with the $hnitcoins.




posted on Jan, 30 2018 @ 06:40 PM
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a reply to: projectvxn


No one really does this with silver, so I tend the buy the silver versions of assets.

Thats why I asked. I'm not taking you out of context, precious metals are real money.

Not that they accept it in stores or banks. It's not a "Currency" by that definition, not an investment for that purpose.
If you took a twenty dollar gold double eagle to a bank they will gladly pay you face value, twenty US dollars.

Banks want gold in exchange for fiat paper money.

That was so ridiculous to the framers minds they didn't need to include it in the constitution. The hint is "coin" money, money 'coined' by Congress, paper isn't mentioned.



posted on Jan, 30 2018 @ 06:55 PM
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a reply to: projectvxn
I agree if they are printing USDT without backing it that is a serious problem. An audit and regular oversight is necessary for cryptos that make claims to have some sort of backing reserve.

USDT inflation mirrors the dollar. The total number of USDT in existence goes up and down unlike other cryptos. According to Tethers' claim, the reserve dollars backing Tether increase and decrease, mirroring the number of tether in existence. Tether itself is not inflationary.

Tether market value listed as 2.003 bullion USD. Bitcoin at 170.7 billion. Crypto market as a whole is over 500 Billion. Tether is tiny compared to BTC. Already 300 million tether have been erased in the time between your post and mine. Tether is still listed at .998 per USD. How many banks could operate if over 10% of their reserves moved in and out regularly? I believe the accounting to be accurate simply from previously operating smoothly in those volatile conditions.

Even if every tether was fake and every tether created went into Bitcoin that's less than 1.5% of BTC value. This won't hurt Bitcoin or cryptos at all in the long run.

eta valuation source Cryptocurrency Market Cap
edit on 30-1-2018 by SouthernForkway26 because: Link to valuation source:



posted on Jan, 30 2018 @ 07:09 PM
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a reply to: SouthernForkway26

Artificial demand to the tune of 2.3 bn would be enough to crash BTC. As far as long-run is concerned, I still believe in BTC, but I also believe that USDT and Bitfinex have done an enormous amount of damage to the market by counterfeiting USDT and artificially inflating the price of BTC with it.

That's not real demand, and when the market gets the full scope a correction of massive proportions will follow.



posted on Jan, 30 2018 @ 07:22 PM
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The Subpoena was issued December 6th or 8th.

Which means there may have been a huge artificial inflation just to make money until this news breaks and markets respond. I see it as a test of sorts, to which the real coins will either break through or die as useless.

BTC is still much too expensive even with the lightning network coming up, and I forsee something else making huge strides in place of it.

That is my issue with all of these cryptos.
Transaction costs.

Definitely watching the next few weeks. Especially with a little dip in the Dow. If things prove to be volatile, expect a massive sell-off.





posted on Jan, 30 2018 @ 07:42 PM
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originally posted by: intrptr
a reply to: projectvxn


No one really does this with silver, so I tend the buy the silver versions of assets.

Thats why I asked. I'm not taking you out of context, precious metals are real money.

Not that they accept it in stores or banks. It's not a "Currency" by that definition, not an investment for that purpose.
If you took a twenty dollar gold double eagle to a bank they will gladly pay you face value, twenty US dollars.

Banks want gold in exchange for fiat paper money.

That was so ridiculous to the framers minds they didn't need to include it in the constitution. The hint is "coin" money, money 'coined' by Congress, paper isn't mentioned.




PMs are 'real money' because they were the very first forms of money AND they carry no counter party risk. All cryptos have counter party risk, for instance to use a cryptocurrency in any transaction it has to be verified, it can only be verified by miners.

If there are no miners mining the coins, they cannot be verified, i.e. counterparty risk.



posted on Jan, 30 2018 @ 07:43 PM
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a reply to: projectvxn

To add, I don't think that ONLY 2.3bn USDT were printed. I think its higher than that.



posted on Jan, 30 2018 @ 07:46 PM
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originally posted by: havok

That is my issue with all of these cryptos.
Transaction costs.



Transaction costs are related to energy. To mine the last remaining bitcoins would require all the energy the world is currently producing, but if miners stop mining coins then coins in transactions cannot be verified.

So, these cryptos work until about 1/2 the coins are mined, then as less and less coins are available to mine and the energy costs rise less miners mine the coins slowing down transaction times and rising the energy costs to mine new coins.



posted on Jan, 30 2018 @ 08:10 PM
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a reply to: SkeptiSchism


PMs are 'real money' because they were the very first forms of money AND they carry no counter party risk.


Even though other forms of wealth were kept before PM like animals, grain, beads, whatever...Gold became the first form of money because no matter how long you stored it , it didn't rust or decay.



posted on Jan, 30 2018 @ 09:01 PM
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a reply to: intrptr

Money, Aristotle, By Doug Casey

It has to be durable, which is why we don't use wheat as money.

It has to be divisible, which is why we don’t use artwork as money. You can't divide the Mona Lisa into pieces.

It has to be convenient, which is why we don't use lead as money. It takes too much to be of value.

It has to be consistent, which is why we don’t use real estate as money. Every piece is different from every other.

Last, it has to have value in and of itself, which is why we shouldn't use paper as money.



posted on Jan, 30 2018 @ 10:19 PM
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a reply to: projectvxn

i warned ats about tether being a bad coin back on jan 17th...



posted on Jan, 30 2018 @ 11:26 PM
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Let me preface this a bit..

Im huge into crypto.. and I know alot and im all about it.. I dont carry any bitcoin though.

The crypto community has been talking about this tether issue ever since october.

In early December.. everyones fears were quelled because I believe Bitfinex proved they had USD backing every USDT.

Im sure they have USD backing every Tether. A few Billion in the crypto world it crumbs when looking at the entire pie. Theres coins with billions in volume in 6 hours.

If your an owner of an exchange.. a billion dollars is nothing. They make so much damn money its insane.

All this being said. Bitfinex itself is shady. Tether may be the reason Bitcoin boomed so quickly as it allowed the liquidity that Bitcoin needed to grow.... but what bothers me more is that every shady market move seems to begin with massive moves on Bitfinex.. its an international millionaires playground... and if I were to choose an exchange or group to be up to no good.. it would be Bitfinex.

All that being said.. as shady as tether is.. everythinf ive seen shows its legit and fully backed.



posted on Jan, 31 2018 @ 01:42 AM
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a reply to: Lucidparadox

They wouldn't be subpoenaed if everything was on the up and up.

Bitfinex owns Tether. Tether USE TO BE it's own thing. It is not anymore.

There are large discrepancies with their internal audits, and at least one or two incomplete audits.

I personally believe that 2.3 bn is simply the tip of the iceberg.



posted on Jan, 31 2018 @ 01:44 AM
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originally posted by: NobodiesNormal
a reply to: projectvxn

i warned ats about tether being a bad coin back on jan 17th...


Yes you did

I didn't read that post of yours at the time, but that one single sentence pretty much sums up my OP. Tether, at one point really was a well-run operation. It started going to hell AFTER Bitfinex got a hold of it.
edit on 31 1 18 by projectvxn because: (no reason given)



posted on Jan, 31 2018 @ 01:47 AM
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a reply to: projectvxn

It's going to remain a problem while there is such volatility. I suppose that unless we can pair every crypto with a fiat, it's going to be seen as a safe bet or even safe harbor.



posted on Jan, 31 2018 @ 01:50 AM
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a reply to: JinMI

It may simply come down around our ears. We don't actually know, and that is the problem. Tether and Bitfinex have not been transparent about this, and there are many good reasons to believe they've been printing USDT to buy BTC; at that point, they could sell it at any price because it isn't their money anyway.

I'm worried it's much more than 2.3 bn. I think 2.3 bn is what they KNOW is missing.



posted on Jan, 31 2018 @ 01:56 AM
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Seems like there's more to this than even I thought:




posted on Jan, 31 2018 @ 04:53 AM
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a reply to: SkeptiSchism


It has to be consistent, which is why we don’t use real estate as money. Every piece is different from every other.

Last, it has to have value in and of itself, which is why we shouldn't use paper as money.

Real estate is 'real', a good investment and a tangible asset. Thats why they are trying to take everyones land, so they can charge them rent.

Thats why they want all the gold in their vaults so they can issue you paper, too.

That why we work all week to get paper to give back to them in exchange for rent.

Remove the paper to see its indentured servitude, a form of slave labor.

I work for the corporations producing the products, goods and services I buy in the store.



posted on Jan, 31 2018 @ 05:18 AM
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I definitely think that as the market continues this bear trend, more and more scams(some high magnitude) will be discovered.

For instance, I have a serious problem with LTC. Its own founder sold off all of his LTC in a couple of disbursements, but then he says he really believes in LTC. For this reason alone I do not invest in LTC.

This entire ordeal with Tether really worries me because there is entirely too little transparency from both Bitfinex and Tether as to what is going on. There is nothing stopping them from committing fraud, and we have no way of knowing that what they say they have, is what they have always had. We don't know if they've actually printed 2.3 billion to pay for BTC and exit with real cash, because we have no idea how the money we do see got there, and we have no idea if that money represents an actual reserve.

Everything that is happening now will ensure that what comes out of Davos is the regulatory cooperation of the entire world on cryptocurrencies. There is too much fraud and abuse, and it seems like every single day we turn over another example.

This is why I harp on coins with serious teams, serious goals, and serious backing.



posted on Jan, 31 2018 @ 08:51 AM
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I thought it was the founder of the LTC website, not the coin, that sold his off....







 
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