RE: RED ALERT - Mt. Gox 2.0 Brewing - Bitfinex May Be Issuing Unbacked Tether To Paper Over Banking Service Loss - What We Think We Know (Part 1)
I have been looking into this as well, but the thing I struggle with is even if all the tether does end up being completely unbacked (which it could or could not be, doesn’t necessarily need the US banking to still have it be backed) there is only around $676 million tether in existence. With Bitcoins market cap at about $135 billion, the amount of tether in existence is just 0.5% of the entire Bitcoin Market. I just don't see how that will have this catastrophic impact dropping the Bitcoin market back down to 2016 levels that I have seen people talking about online.
The other point that I struggle with is why people actually think a large portion of people would even want to redeem their tethers, from what I have seen Tethers are just a safe place for people to park their currency when trading out of BTC or ETH before making a move back in. Seems to me the biggest holders of tethers are the exchanges themselves.
I'm not saying this analysis is wrong at all, or that there aren't issues with bitcoin that need to be fixed before any sort of mass adoption, just that I don't think we have the full story and there are still a large number of holes in this story to fill before I will start to panic.
Again, huge thumbs up for your comment mk40. Tether is but less than 1% of total bitcoin valuation. Calling bitcoin "shitcoin" might be premature. There are alternatives where the devs and the community are honest. Honesty will pay for itself in the end. Mind you, im heavily invested in DMD coins.
Huge thumbs @mk40 up for your rational point on the total amount of tether to provide some perspective. This post starts off calling bitcoin "shitcoin", so there's heavy bias off the bat and at the end. If anything Tether should be the "hottest Shitcoin" and the focal point here. Drawing attention to Bitfinex and Tether is great, but leading and closing with Bitcoin Core FUD is free advertising for another agenda.
As for the risk to Bitfinex account/tether holders, I appreciate the post alert for that. People need to be aware of the big risks here and take action to protect themselves. Strictly talking Tether, I agree that there's a big scheme involved.
I hope Bitcoin and Bitcoin Cash both work out, and that any Bitfinex/Tether nonsense blows up for the health of the space long term. Hopefully people will protect themselves for that. I also hope that the BTC Core vs Bitcoin Cash arguments will grow old so the tokens can coexist without trying to kill each other, or at least be discussed separately.
PPS - I realize the Bitcoin Cash image at the top, for example, could seem a little off the main point I'm making here. I can understand that perspective, but I'm simply making it easier for people to at least consider selling some Bitcoin, whatever that may be for.
The facts are that Bitcoin looks scary on fundamentals right now, the chart is at nosebleed highs, and now we've got increasingly loud murmurs of Tether problems amid Tether hacks at the #1 exchange.
Is that a "wall of worry" you want to climb from $8200 to wherever the next "big, round-number slamdown" happens? $9000? $10000?
Thanks for all of this constructive debate and acknowledging some things fairly. Respect that. I'd upvote your comments my small stake to be in good form for your effort, but I see that it'll throw off the sorting logic of the string.
np ill handle the voting
@steemmatt that is so hope Bitcoin and Bitcoin Cash both work out, and that any Tether nonsense blows up to stop the crooks, and let the markets continue on after any fallout
I recall seeing the Ether market sell on that particular exchange live. I guess that we should set some low buy orders, right? I also remember the Ether price globally being resilient and strong afterwards with respect to recovering from that drop. Fortunately, I believe that the impacted exchange made good on compensating those who were affected by that incident. I'm not saying things would be the same for BTC.
I now understand that you had an ugly divorce with Bitcoin and will try to keep your devil's advocate focus in mind from now on. Without knowing your history, it's not out of the question to interpret how you opened with some Bitcoin bashing how you see em, and close with whispers of I told you so as FUD. You reach a lot of viewers, and not all know about your track record/efforts/warnings/advice at top of mind. I edited my post because I missed the whisper comment at the bottom, which set me off by feeling like taunting.
People have debated Core vs Cash forever, so I'm not going to have any life changing input here. I don't have the solution other than the hope that in the long run there can be a coexistence. I think a lot of the coins you hit with darts have far less adoption and demand on their systems. I perceive that this gives them the advantage via more nimble development teams to not have to deal with as much red tape and politics to improve their technology. They can also be more progressive with their solutions.
Thanks for the tips otherwise and additional transparency. It's wise for everyone to be diversified and prepared to accept that it can all go to $0. That's why we ideally play with money we can afford to lose.
"I also remember the Ether price globally being resilient and strong afterwards with respect to recovering from that drop. Fortunately, I believe that the impacted exchange made good on compensating those who were affected by that incident. I'm not saying things would be the same for BTC."
Correct on all points. I am worried the same might not be true of Bitcoin. I wonder, how price-setting was GDAX at the time for Ethereum? Today, it is only #4:
"I now understand that you had an ugly divorce with Bitcoin and will try to keep your devil's advocate focus in mind from now on. Without knowing your history, it's not out of the question to interpret how you opened with some Bitcoin bashing how you see em, and close with whispers of I told you so as FUD. You reach a lot of viewers, and not all know about your track record/efforts/warnings/advice at top of mind. I edited my post because I missed the whisper comment at the bottom, which set me off by feeling like taunting."
All fair points well taken. I'd be lying if I said I didn't use inflammatory language sometimes to get people's notice in the "sea of attention."
"People have debated Core vs Cash forever"
True, and you could easily interpret my post as more of that.
I'm more interested in debating Core vs ANYTHING. It looks bad compared to every coin I look at, in terms of fees, privacy, and transaction time. This should REALLY WORRY all of us, because it means buyers have no idea what they are buying, and BTC is floating on basically hype and name recognition. r/Bitcoin users are telling new users they should buy LTC instead because of the fees...that sounds like terrible precedent.
"I think a lot of the coins you hit with darts have far less adoption and demand on their systems."
Also great points. However, Steem is a monster for transaction numbers, and it's fast and practically no-fee. Just one example of a more load-bearing chain.
"It's wise for everyone to be diversified and prepared to accept that it can all go to $0. That's why we ideally play with money we can afford to lose."
I really don't want to sell any into fiat, but I'm a bit worried. Trying to talk myself into it. Bitcoin Cash could quadruple, or quarter, in an event like this, but I bet most sub top-10 crypto is going down hard.
@lexiconical as you said "I really don't want to sell any into fiat, but I'm a bit worried. Trying to talk myself into it. Bitcoin Cash could quadruple, or quarter, in an event like this, but I bet most sub top-10 crypto is going down hard."
@lexiconical you are right but you are not the only one worried, every one holding on tightly for a gain
lex will respond to this, he can't post atm. he says the gains/losses are far more than the amount. btc dipped 6-800$ on 30m tether hack which is like 5% tether. "market will have no bids"
Oh, I totally understand that gains and losses are more than the amount of tether created, however, there are a lot of exchanges that don’t use tether at all. There are more options than just tether.
I do think tether is a little shady, and the link to Bitfinex is concerning as well. I just don’t see tether being the thing to take down bitcoin to where some people are saying. Again I could be wrong, don’t claim to know every inner working of these two companies relationship.
This post brings up a lot of good counter arguments to bitfinexed. Just want people to see both sides before reacting.
Honestly, that link goes to r/bitcoin. Nothing there is trustworthy.
Despite that, I looked, and unsurprisingly, they do not seem to understand that it does not matter if "not too much" of the volume is in Tether.
This is a potential Mt Gox event at the #1 Bitcoin price setting exchange that appears to be both unbanked and trading heavily in a token that is refusing to conform to its own audit structure.
Nothing at that link disputes any of those facts, which I believe are the core argument.
PS - Everyone SHOULD do their own due diligence. I bring the facts that appear most likely to be correct to my readers attention, or when applicable, the facts that if they are wrong will be most damaging for them to be on the wrong side of. If I'm wrong and people move their coins out of the exchange, or sell into something more stable temporarily, the potential damage is far less in my estimation.
It indeed necessary that we all do our Due diligence @lexiconical you did a good job in bringing out almost all the facts to all those with interest and concern in this matter
That last point is very fair. Appreciate the solid dialogue! Like I said previously, I will definitely be keeping an eye on all of this ready to make a move if need be. It’s not quite there yet for me, but things can change instantly.
@nikez452 you got it right
just tellin u what he said =) all my info comes from him. mostly greek to me
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@mk40 Very interesting to hear that there is only around $676 million tether in existence and also Bitcoins market cap at about $135 billion, the amount of tether in existence is just 0.5% of the entire Bitcoin Market.
It really interesting to hear this
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